It was an anonymous letter. That's how it always starts, right? In late 2023, a single piece of paper landed on the doorstep of a man named Michael Van Deelen. He was just a regular guy caught in a legal brawl with McDermott International, but that letter changed everything for the U.S. bankruptcy courts. It alleged that David R Jones, the powerhouse judge overseeing some of the biggest corporate meltdowns in America, was living a double life.
Actually, "double life" might be too dramatic. He was just living with his girlfriend.
The problem? His girlfriend, Elizabeth Freeman, was a high-powered partner at Jackson Walker—a law firm that was constantly appearing in his courtroom. For years, Judge Jones sat on the bench in Houston, approving millions in legal fees for Jackson Walker while the woman he shared a home with was collecting a paycheck from those same fees. No one knew. Not the creditors, not the other lawyers, and certainly not the public.
When the news broke, it wasn't just a gossip story. It was an earthquake.
Why the David R Jones Judge Story Actually Matters
People think bankruptcy is boring. They think it's just piles of paperwork and accountants arguing over spreadsheets. But David R Jones wasn't a boring judge. He was the guy who single-handedly turned Houston into the bankruptcy capital of the world.
Before him, if a massive company like J.C. Penney or Neiman Marcus went bust, they went to Delaware or New York. Jones changed that. He was fast. He was smart. He made the Southern District of Texas the place to be for "mega-cases."
Then we found out about the secret.
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Honestly, the scale of it is kind of hard to wrap your head around. We aren't talking about one or two cases. We're talking about roughly 33 different bankruptcy proceedings where Jackson Walker was involved while Jones was on the bench. Since at least 2017, they shared a home. He approved their fees. He even mediated cases where she represented the parties.
You've got to wonder: how did no one notice?
The Fallout: Resignations and RICO Suits
Once the Wall Street Journal started sniffing around, the house of cards folded fast. Jones admitted to the relationship in October 2023 and resigned almost immediately. He didn't really have a choice. The Fifth Circuit Court of Appeals had already filed a formal ethics complaint, and the "probable cause" for misconduct was basically a mile high.
But resigning didn't end the headache. It was just the beginning of what some are calling "Jones-gate."
- The U.S. Trustee went on the warpath. They started filing motions to claw back—or "disgorge"—over $20 million in fees that had been paid to Jackson Walker.
- Massive Class Actions. By 2025, bondholders from companies like GWG Holdings filed a RICO lawsuit. They didn't just allege a "oopsie" in ethics; they alleged a full-blown conspiracy.
- The "Fire Sale" Allegations. In the GWG case, plaintiffs claimed Jones and Freeman orchestrated a "fire sale" of assets to ensure there was enough cash to pay the lawyers (and themselves) while bondholders got pennies.
It’s messy. Really messy.
What Most People Get Wrong About the Ethics
You’ll hear some defenders say, "Well, they weren't married."
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Jones actually used that as a defense early on. He argued that because they weren't legally married, he didn't have a direct financial interest in her income. But federal judicial ethics don't really care if there’s a ring on the finger. If your "impartiality might reasonably be questioned," you have to step down.
Sharing a mortgage and a bed with the lead attorney's partner? Yeah, that counts.
The nuance here is that Freeman wasn't always the lead lawyer in the room. She worked behind the scenes on many of these cases. Jackson Walker claimed they didn't know the full extent of the relationship until 2021, at which point they told her to stop working on Jones's cases. But even then, the firm didn't tell the court. They kept it quiet.
That silence is what's costing them millions now.
The 2026 Reality: Where Are They Now?
As of early 2026, the legal system is still trying to clean up the glass. David R Jones, once the most powerful bankruptcy judge in the country, has been relegated to the sidelines. He’s been forced to sit for depositions where he’s had to plead the Fifth Amendment over a hundred times. Imagine that: a former federal judge refusing to answer questions to avoid self-incrimination.
He was even ordered to undergo 7.5 hours of ethics training—which feels a bit like giving a speeding ticket to a NASCAR driver after they’ve already crashed the car.
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Meanwhile, the Southern District of Texas is trying to rebuild its reputation. For a while, it looked like Houston was finished as a bankruptcy hub. Companies were scared that any ruling they got there would eventually be overturned because of the "Jones taint."
Can You Trust the System?
If you’re a business owner or a creditor, this story is a cautionary tale. It shows that even in the highest levels of the federal judiciary, the "old boys' club" mentality can still thrive.
The U.S. Trustee is still fighting to get that $20+ million back from Jackson Walker. Some settlements have been proposed—small amounts like $2 million here and there—but the government is pushing for the full amount. They want to send a message.
Actionable Insights: Lessons from the Jones Scandal
If you are involved in a high-stakes legal battle or a corporate restructuring, you can't just trust that the "system" is working perfectly. You have to be proactive.
- Vetting is Non-Negotiable. If you're hiring a law firm for a bankruptcy case, ask about their internal conflict-of-interest disclosures. Don't just take the standard boilerplate "we checked our database" for an answer.
- Monitor Fee Applications. In bankruptcy, every dollar paid to a lawyer is a dollar not paid to a creditor. If you see a firm getting "substantial" fees approved with very little pushback from the bench, it’s worth a second look.
- Understand Recusal Rights. If something feels off—if a judge seems strangely cozy with the opposing counsel—your legal team has the right to file a motion for recusal. It’s a "nuclear option," but as Michael Van Deelen proved, sometimes that anonymous tip is right.
- Watch the Venue. The "forum shopping" that brought companies to Houston is now under intense scrutiny. If you are a creditor, you might have grounds to challenge a venue if you can show the district has a history of overlooked conflicts.
The David R Jones judge scandal didn't just end a career; it shifted how we view judicial transparency. It’s a reminder that even the most "efficient" court isn't worth much if the person holding the gavel has a secret stake in the outcome.