Jordan A. Messinger

A California bankruptcy judge agreed Wednesday to postpone dismissing the Roman Catholic Diocese of Oakland's Chapter 11 case for two more weeks, after a mediator overseeing plan discussions said there was a "light at the end of the tunnel." U.S. Bankruptcy Judge William J. Lafferty III said he will give the diocese more time to file a plan, despite complaints from the committee representing sexual abuse claimants that the claimants were not included in the talks. "I don't need to tell any of you what a tragedy it would be if we dismissed the case this week," the judge told the parties at a hearing. The Oakland, California, diocese filed for Chapter 11 protection in May 2023 to address mounting litigation brought under a state law that opened a temporary window during which adult survivors of childhood sexual abuse could file otherwise time-barred claims. Earlier this year, the diocese proposed a Chapter 11 plan to establish a $165 million fund to settle hundreds of abuse claims, but the plan was overwhelmingly rejected by the survivors. The diocese and its official committee of unsecured creditors, which includes the abuse claimants, began mediation in early 2024, but the diocese said the talks reached a deadlock, and in September this year, it moved to dismiss its own Chapter 11 case, saying the diocese could not afford the expense of a contested plan confirmation. The committee also requested dismissal and said the case should end immediately, but at a hearing held late last month, Judge Lafferty said he would grant the motion unless the parties could report progress toward a plan by Wednesday. During the hearing held Wednesday, diocese counsel Ann Marie Uetz told the court that mediation since last month had produced enough progress that the dismissal date should be pushed back to Nov. 26. One of the two mediators, former U.S. Bankruptcy Judge Randall Newsome, said that the discussions had been the most difficult in his mediation career, but there was a "light at end of the tunnel" and the talks should be allowed to continue. "Over the last 10 days, there has been progress like I've never seen before," he told the court. Counsel for a half-dozen of the diocese's insurance carriers also rose in support of an extension, but committee counsel Jeffrey Prol said the group still wanted immediate dismissal, adding that it had not been invited to the latest talks and there had been no indications of a settlement the committee could accept. The other mediator, former U.S. Bankruptcy Judge Christopher Sontchi, said: "There have been no communications between the debtor and the committee, period." Judge Lafferty asked if proposing a plan without committee approval would just set up another plan rejection. Uetz said "select" state court counsel for abuse claimants had been included in the talks, and Tancred Schiavoni, who is representing diocese insurer Pacific Indemnity, noted that in the Boy Scouts of America bankruptcy, a plan negotiated without committee participation later won the committee's support. "We're all acting in good faith. We're just asking for two weeks here," Schiavoni told the court. Judge Lafferty said he would give the debtor two more weeks, and urged it to include the committee in the discussions. "With the committee in the room, there is a chance of something consensual," he said. The debtor is represented by Eileen Ridley, Shane J. Moses, Geoffrey S. Goodman, Ann Marie Uetz, Matthew D. Lee and Mark C. Moore of Foley & Lardner LLP. The committee is represented by Jeffrey D. Prol and Brent Weisenberg of Lowenstein Sandler LLP and Tobias S. Keller, Jane Kim and Gabrielle L. Albert of Keller Benvenutti Kim LLP. The insurers are represented by Justine Daniels, Alexandra Wolter and Tancred V. Schiavoni of O'Melveny & Myers LLP, Alexander Potente, Jason Chorley, Catalina J. Sugayan, Clinton E. Cameron and Bradley E. Puklin of Clyde & Co. LLP, Mark D. Plevin, Miranda H. Turner and Jordan A. Hess of Plevin & Turner LLP, Blaise S. Curet of Sinnott Puebla Campagne & Curet APLC, Robin D. Craig of the Law Office of Robin Craig, Harris B. Winsberg, Matthew M. Weiss, Matthew G. Roberts, Todd C. Jacobs and John E. Bucheit of Parker Hudson Rainer & Dobbs LLP, Andrew Wyatt, Joshua Haevernick, Kelly Graf and Lauren Macksoud of Dentons, Russell W. Roten, Jeff D. Kahane, Nathan Reinhardt and Betty Luu of Duane Morris LLP, and Michael David Compean and Frederick Hall of Black Compean & Hall LLP. The case is In re: The Roman Catholic Bishop of Oakland, case number 4:23-bk-40523, in the U.S. Bankruptcy Court for the Northern District of California.

Nov 12

4 min

The embattled wind-down trustee for defunct life insurance bond seller GWG Holdings in a Houston Chapter 11 case has resigned from the role amid the fallout from her secret romance with a then-bankruptcy judge in the Southern District of Texas. Elizabeth C. Freeman, a former Jackson Walker LLP partner who gained notoriety after her yearslong romantic relationship with U.S. Bankruptcy Judge David R. Jones came to light, posted a notice Wednesday that she was resigning from the role of wind-down trustee for GWG Holdings. Her resignation came after bondholders called for her to be removed from the case. Freeman's sparse notice of resignation notes that a wind-down trustee is permitted to resign via 60-day written notice to grant the bankruptcy court time to appoint a replacement. The 60-day clock began Wednesday. Freeman initially fought to remain on the case, which she said was nearing resolution. In response to calls for her to step down, Freeman argued that bondholders' allegations against her "have nothing to do with" her work on the matter. Bondholders in the Chapter 11 case urged Freeman, who now operates her own practice, to step down from the role over her connections to the romance scandal that has rocked the Southern District of Texas bankruptcy court. "Notwithstanding the myriad lapses of judgment and violations of applicable rules of ethics and conduct, the gravy train continues for Ms. Freeman — she continues to collect fees as wind down trustee despite securing the position through fraud," the bondholders said in the motion. The move is the latest consequence of a scandal that began about two years ago, when reports first surfaced tying Jones to prominent bankruptcy attorney Freeman, a former clerk. Jones resigned from the judiciary in October 2023. Jones, who was at the time a member of a two-judge "mega bankruptcy panel" in the district, oversaw mediation that led to a settlement that came ahead of the Chapter 11 action. The case then went to the other half of the team, U.S. Bankruptcy Judge Marvin Isgur. Southern District of Texas Chief Judge Alia Moses recused Judge Isgur from the Chapter 11 action earlier this week, stating in her order that, though the case was "one of many tainted by the undisclosed intimate relationship" between Jones and Freeman, Judge Isgur was not believed to be involved with or aware of "the Jones-Freeman scheme." The Office of the U.S. Trustee has launched litigation attempting to claw back millions of dollars in fees paid to Jackson Walker for its work in about 30 bankruptcy cases Jones oversaw during the time he was on the bench and romantically attached to Freeman. Last week, bondholders objected to a proposed $405,000 settlement between Jackson Walker and GWG Holdings amid the separate but related fee suit, alleging that the deal "smacks of collusion." In that action, the objectors pointed to Freeman's role as wind-down trustee, arguing that under the deal as contemplated, Freeman would be permitted to continue paying herself, while debtors earn pennies on the dollar. "Plaintiffs do not merely assert legal malpractice," the objectors said. "Rather, they allege causes of action based on Jackson Walker's intentional misconduct in targeting distressed entities to plunder for professional fees and aggrandizement. These claims include fraud, conspiracy and violations of the RICO statute, among others." Freeman, Jones and Jackson Walker are also fighting a class action brought by bondholders over the secret romance. A separate but similar racketeering suit over the relationship was dismissed last year. Freeman told Law360 in an email, "I do not comment on pending matters." Counsel for the GWG Wind Down Trust and for the bondholders did not immediately respond to requests for comment Thursday. The TWG Wind Down Trust is represented by Elizabeth C. Freeman of the Law Office of Liz Freeman, Eric M. English and Megan Young-John of Porter Hedges LLP and Matthew Probus of the Probus Law Firm. The bondholders are represented by Mikell A. West and Robert W. Clore of Bandas Law Firm PC and Shelby A. Jordan of Jordan & Ortiz PC. The case is In re: GWG Holdings Inc., case number 4:22-bk-90032, in the U.S. Bankruptcy Court for the Southern District of Texas.

Nov 6

3 min

A California bankruptcy judge agreed Wednesday to postpone dismissing the Roman Catholic Diocese of Oakland's Chapter 11 case for two more weeks, after a mediator overseeing plan discussions said there was a "light at the end of the tunnel." U.S. Bankruptcy Judge William J. Lafferty III said he will give the diocese more time to file a plan, despite complaints from the committee representing sexual abuse claimants that the claimants were not included in the talks. "I don't need to tell any of you what a tragedy it would be if we dismissed the case this week," the judge told the parties at a hearing. The Oakland, California, diocese filed for Chapter 11 protection in May 2023 to address mounting litigation brought under a state law that opened a temporary window during which adult survivors of childhood sexual abuse could file otherwise time-barred claims. Earlier this year, the diocese proposed a Chapter 11 plan to establish a $165 million fund to settle hundreds of abuse claims, but the plan was overwhelmingly rejected by the survivors. The diocese and its official committee of unsecured creditors, which includes the abuse claimants, began mediation in early 2024, but the diocese said the talks reached a deadlock, and in September this year, it moved to dismiss its own Chapter 11 case, saying the diocese could not afford the expense of a contested plan confirmation. The committee also requested dismissal and said the case should end immediately, but at a hearing held late last month, Judge Lafferty said he would grant the motion unless the parties could report progress toward a plan by Wednesday. During the hearing held Wednesday, diocese counsel Ann Marie Uetz told the court that mediation since last month had produced enough progress that the dismissal date should be pushed back to Nov. 26. One of the two mediators, former U.S. Bankruptcy Judge Randall Newsome, said that the discussions had been the most difficult in his mediation career, but there was a "light at end of the tunnel" and the talks should be allowed to continue. "Over the last 10 days, there has been progress like I've never seen before," he told the court. Counsel for a half-dozen of the diocese's insurance carriers also rose in support of an extension, but committee counsel Jeffrey Prol said the group still wanted immediate dismissal, adding that it had not been invited to the latest talks and there had been no indications of a settlement the committee could accept. The other mediator, former U.S. Bankruptcy Judge Christopher Sontchi, said: "There have been no communications between the debtor and the committee, period." Judge Lafferty asked if proposing a plan without committee approval would just set up another plan rejection. Uetz said "select" state court counsel for abuse claimants had been included in the talks, and Tancred Schiavoni, who is representing diocese insurer Pacific Indemnity, noted that in the Boy Scouts of America bankruptcy, a plan negotiated without committee participation later won the committee's support. "We're all acting in good faith. We're just asking for two weeks here," Schiavoni told the court. Judge Lafferty said he would give the debtor two more weeks, and urged it to include the committee in the discussions. "With the committee in the room, there is a chance of something consensual," he said. The debtor is represented by Eileen Ridley, Shane J. Moses, Geoffrey S. Goodman, Ann Marie Uetz, Matthew D. Lee and Mark C. Moore of Foley & Lardner LLP. The committee is represented by Jeffrey D. Prol and Brent Weisenberg of Lowenstein Sandler LLP and Tobias S. Keller, Jane Kim and Gabrielle L. Albert of Keller Benvenutti Kim LLP. The insurers are represented by Justine Daniels, Alexandra Wolter and Tancred V. Schiavoni of O'Melveny & Myers LLP, Alexander Potente, Jason Chorley, Catalina J. Sugayan, Clinton E. Cameron and Bradley E. Puklin of Clyde & Co. LLP, Mark D. Plevin, Miranda H. Turner and Jordan A. Hess of Plevin & Turner LLP, Blaise S. Curet of Sinnott Puebla Campagne & Curet APLC, Robin D. Craig of the Law Office of Robin Craig, Harris B. Winsberg, Matthew M. Weiss, Matthew G. Roberts, Todd C. Jacobs and John E. Bucheit of Parker Hudson Rainer & Dobbs LLP, Andrew Wyatt, Joshua Haevernick, Kelly Graf and Lauren Macksoud of Dentons, Russell W. Roten, Jeff D. Kahane, Nathan Reinhardt and Betty Luu of Duane Morris LLP, and Michael David Compean and Frederick Hall of Black Compean & Hall LLP. The case is In re: The Roman Catholic Bishop of Oakland, case number 4:23-bk-40523, in the U.S. Bankruptcy Court for the Northern District of California.

Nov 12

4 min

Willkie represented the founders and Atlantic Global Risk LLC (“Atlantic Group”), a leading independent transaction liability insurance broker in the United States, in connection with Howden’s acquisition of Atlantic Group. On January 5, Howden announced that it agreed to acquire Atlantic Group. The combination of Howden, the largest transaction liability insurance broker outside of the U.S., and Atlantic Group creates a new global force in the transaction liability market. Through the combination, Atlantic Group’s founders will become Howden shareholders and will take on key roles in Howden’s U.S. retail broking growth and global transactional liability strategy. The Willkie team was led by partners Larissa Marcellino and Andrew Marmer and included partners Jordan Messinger and Philip Coletto and associates Nicola White and Caleb Penrod.

Jan 7

1 min

The federal judge overseeing GWG Holdings' bankruptcy case has been removed because of his professional relationship with embattled former U.S. Bankruptcy Judge David R. Jones, a decision the chief bankruptcy judge attributed not to the GWG judge's "own actions," but to Jones's "abuse" of judicial authority. U.S. Bankruptcy Court for the Southern District of Texas Chief Judge Alia Moses on Monday agreed to recuse U.S. Bankruptcy Judge Marvin Isgur from the Chapter 11 proceedings, noting the case is "one of many tainted by the undisclosed intimate relationship" between Jones and former Jackson Walker LLP partner Elizabeth Freeman. GWG bondholders had asked the chief judge to recuse Judge Isgur from the case, arguing the judge had allowed Freeman to continue to be GWG's wind-down trustee even after her secret relationship with Jones — and her alleged scheme to secure millions of dollars in attorney fees — came to light. GWG is now shuttered. In Monday's order, Judge Moses said the true extent of the "relationship and scheme continues to become known," and thus it's necessary for the court "to act to avoid actual impropriety and the appearance of impropriety." Sometimes judicial officers must be recused to avoid that appearance even if the court doesn't question that judge's impartiality, the chief judge said. "The court finds such a recusal necessary here," she said. According to Judge Moses, Jones directed every complex Chapter 11 case filed in the district to be assigned to either him or Judge Isgur. Jones and Judge Isgur used to be colleagues, she said. "Unbeknownst to Judge Isgur, this assignment was part of the Jones-Freeman scheme," Judge Moses said, referring to the GWG case. "Judge Isgur now faces a professional conundrum, not because of his own actions, but because Jones abused the judicial authority entrusted to him." She continued, "While this court believes Judge Isgur to be impartial, Judge Isgur's professional history with Jones is enough for a well-informed, thoughtful and objective observer to harbor doubts about his impartiality." GWG bondholders have sued Jones over the secret romance, which was revealed in 2023. The company filed for bankruptcy in 2022 with more than $2 billion in liabilities, while also facing scrutiny by the U.S. Securities and Exchange Commission for its business practices. They said the Jones-Freeman scheme affected the restructuring. Meanwhile, Jones has argued the bondholders are complaining about official actions he took while mediating the case, and his role entitles him to nearly insurmountable judicial immunity. Freeman, for her part, argued that her relationship with Jones was unconnected to her work for GWG's wind-down trust and said removing her from the case would impede her almost-completed work and creditor payments. Judge Isgur has worked as a federal bankrupty judge since 2004. He's overseen the GWG case since its inception, according to Monday's order. In their recusal motion, the GWG bondholders said Judge Isgur had a "close personal relationship with Jones and to some lesser extent, Ms. Freeman." "Unfortunately, the imprints of malfeasance by Judge David Jones and his long-term, live-in girlfriend, Elizabeth Freeman, along with her former firm, Jackson Walker, permeate the docket," the bondholders said. The U.S. Trustee's Office has also sued Jackson Walker looking to claw back $23 million the firm earned in fees from bankruptcy cases it handled in Jones' courtroom. While the office has not explicitly accused the firm of exploiting the relationship for nefarious purposes, it has said the failure to disclose the relationship is enough to void any fees tied to it. Several other lawsuits have also accused outside firms of using Freeman and Jackson Walker to obtain preferential treatment from Jones. On Tuesday, the former chief executive officer of Texas financial services firm Beneficient was arrested and charged with creating a fraudulent scheme to loot more than $150 million from GWG, for which he served as chairman. Bradley Heppner was charged with securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, false statements to auditors, and falsification of records, according to a New York federal grand jury indictment unsealed Tuesday. Heppner and others stole funds from GWG through the use of a shell company he controlled called the Highland Consolidated Limited Partnership, or HCLP, prosecutors said. Judge Isgur couldn't be immediately reached for comment late Tuesday, and counsel for the bondholders didn't immediately respond to a request for comment. The bondholders are represented by Mikell A. West and Robert W. Clore of Bandas Law Firm PC, and Shelby A. Jordan of Jordan & Ortiz PC. The case is In re: GWG Holdings Inc., case number 4:22-bk-90032, in the U.S. Bankruptcy Court for the Southern District of Texas.

Nov 4

4 min