In Re: Professional Fee Matters Concerning the Jackson Walker Law Firm

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE:
Professional Fee Matters Concerning the
Jackson Walker Law Firm
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CASE NO: 4:23-CV-4787
REPORT AND RECOMMENDATION
TO THE UNITED STATES DISTRICT COURT
Regarding ECF No. 100
This matter is pending before the United States District Court for the Southern District of
Texas, the Honorable Chief Judge Alia Moses presiding.1 Chief Judge Moses previously referred
to this Court two discrete questions. First, whether the pending Settlement Motions2 should be
approved before adjudicating the merits of the U.S. Trustee’s Vacatur Motions;3 and, second,
whether an alternative to approval exists that would best serve the interests of the affected parties
while preserving the merits of the Vacatur Motions.4
1 Case No. 4:23-CV-4787, ECF No. 31.
2 (i) Bankr. No. 20-20184; Bankr. Adv. No. 25-2002; Civ. Case No. 4:23-CV-4787, ECF No. 96, Old Copper Company
Inc. F/K/A J. C. Penney Company Inc. and Copper Sub Corporation, Inc. F/K/A J. C. Penney Corporation, Inc., As
Wind Down Debtors In J. C. Penney Direct Marketing Services LLC; (ii) Bankr. No. 20-32564; Case No. 4:23-CV-
4787, ECF No. 108, Steven Balasiano, solely in his capacity as Plan Administrator for each of the wind-down debtors
in the jointly administered cases of Stage Stores, Inc.; (iii) Bankr. Nos. 20-35740 & 21-30427; Civ. Case No. 4:23-
CV-4787, ECF No. 90, Seadrill Partners, LLC reorganized debtors and the Seadrill Limited Reorganized Debtors; (iv)
Bankr. No. 21-30936; Civ. Case No. 4:23-CV-4787, ECF No. 57, Randy W. Williams, Chapter 7 trustee for Brilliant
Energy, LLC; (v) Bankr. No. 21-90002, ECF No. 1884, David Dunn, Liquidation Trustee for the Basic Energy
Liquidation Trust; (vi) Bankr. No. 21-90054; Case No. 4:23-CV-4787, ECF No. 98, by Patrick Bartels, as Trustee for
the Strike Liquidating Trust; (vii) Bankr. No. 22-50009, ECF No. 715, David Dunn, Plan Agent and sole manager,
sole director sole officer and sole representative of 4E Brands Northamerica LLC; (viii) Bankr. No. 22-90018; Civ.
Case No. 4:23-CV-4787, ECF No. 91, Sungard AS New Holdings, LLC, the wind-down debtor, by and through
Drivetrain LLC, the Plan Administrator; (ix) Bankr. No. 22-90032; Civ. Case No. 4:23-CV-4787, ECF No. 100,
Michael I. Goldberg, in his capacity as the Trustee of the GWG Litigation Trust Litigation; and (x) Bankr. No. 23-
90055; Civ. Case No. 4:23-CV-4787, ECF No. 97, Patrick Bartels, as Plan Agent for the Wind-Down Debtor In re
Auto Plus Auto Sales LLC (formerly In re IEH Auto Parts Holding, LLC, et al.), (together the “Settlement Motions”).
3 “Vacatur Motions” are defined in Case No. 4:23-CV-4787, ECF No. 109.
4 Case No. 4:23-CV-4787, ECF No. 140.
United States District Court
Southern District of Texas
ENTERED
January 22, 2026
Nathan Ochsner, Clerk
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For the reasons stated infra, this Court recommends that the “Motion for Entry Approving
Compromise and Settlement Pursuant to Bankruptcy Rule 9019” filed on October 3, 2025 by
Michael I. Goldberg, in his capacity as the Trustee of the GWG Litigation5 be heard concurrently
with the consolidated trial on the U.S. Trustee’s Vacatur Motions in the affected cases, which
includes (i) “Jackson Walker’s Fourth and Final Fee Application for Allowance and Payment of
Fees and Expenses as Co- Counsel to the Debtors for the Period from April 20, 2022 through June
20, 2023”6 and (ii) “United States Trustee’s Opposition to Jackson Walker’s Final Fee Application
as Co-Counsel to the Debtors and Motion for Sanctions and Related Relief.” 7
I. REPORT
On August 21, 2023, Jackson Walker LLP (“Jackson Walker”) filed “Jackson Walker
LLP’s Fourth And Final Fee Application For Allowance And Payment of Fees And Expenses As
Co-Counsel To The Debtors For The Period From April 20, 2022 Through June 20, 2023” (the
“Final Fee Application”).8 On March 29, 2024, the United States Trustee (the “U.S. Trustee”)
filed “United States Trustee’s Opposition To Jackson Walker’s Final Fee Application As Co-
Counsel To The Debtors And Motion For Sanctions And Related Relief” (the “Fee Objection”).9
On October 3, 2025, Michael I. Goldberg, in his capacity as the Trustee of the GWG Litigation
Trust (the “Litigation Trustee”) filed “Litigation Trustee’s Motion For Entry of An Order
Approving Settlement Agreement With Jackson Walker LLP” (the “GWG Settlement Motion”).10
The GWG Settlement Motion seeks entry of an order approving a settlement agreement between
5 Case No. 4:23-CV-4787, ECF No. 100.
6 Bankr. 22-90032, ECF No. 2158.
7 Bankr. 22-90032, ECF No. 2415.
8 Bankr. 22-90032, ECF No. 2158.
9 Bankr. 22-90032, ECF No. 2415.
10 Case No. 4:23-CV-4787, ECF No. 100.
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the Litigation Trustee and Jackson Walker (the “Proposed Settlement”).11 The Proposed
Settlement calls for a $405,000.00 payment by Jackson Walker in exchange for release of all
claims the GWG Litigation Trustee has or may have against Jackson Walker.12 The Proposed
Settlement also contemplates resolution and approval of the Final Fee Application:
The Settlement Motion and Approval Order shall also make clear that this
Agreement fully and finally resolves JW’s final fee application currently pending in
the Bankruptcy Case, and such Settlement Motion and Approval Order shall
provide for final approval of the same as part of this Agreement.13
At the December 9, 2025 in-person status conference,14 the Court entertained arguments
by parties and ordered Jackson Walker and the U.S. Trustee to file statements addressing the issue
of whether the GWG Settlement Motion should be heard in conjunction with the other Settlement
Motions or separately.15 In response, Jackson Walker filed a notice requesting the Court to
consider the GWG Settlement Motion concurrently with the consolidated trial on the Vacatur
Motions.16 And the U.S. Trustee filed a notice objecting to consideration of any of the Settlement
Motions before a consolidated trial on the Vacatur Motions is completed.17
A bankruptcy court must ensure that the standards of 11 U.S.C. §§ 327–330 are met before
approval of a bankruptcy professional’s retention and compensation.18 Section 327(a) requires a
debtor to obtain bankruptcy court approval before retaining counsel, and § 330(a)(1)(A) permits
counsel retained under § 327(a) to seek reasonable compensation for actual and necessary
services.19 Section 327(a) provides that only professionals that do “not hold or represent an interest
11 Case No. 4:23-CV-4787, ECF No. 100 at 1.
12 Case No. 4:23-CV-4787, ECF No. 100-1 at 4.
13 Case No. 4:23-CV-4787, ECF No. 100-1 at 4 (emphasis added).
14 Case No. 4:23-CV-4787, ECF No. 111.
15 Dec. 9, 2025 Courtroom Hr’g.
16 Case No. 4:23-CV-4787, ECF No. 138.
17 Case No. 4:23-CV-4787, ECF No. 137.
18 11 U.S.C. § 330(a).
19 Barron & Newburger, P.C. v. Tex. Skyline, Ltd. (In re Woerner), 783 F.3d 266, 272 (5th Cir. 2015).
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adverse to the estate, and that are disinterested persons,” may be employed as a bankruptcy
professional. Further, § 328(c) provides that “the court may deny allowance of compensation for
services and reimbursement of expenses . . . if, at any time during such professional person’s
employment under section 327 or 1103 of this title, such professional person is not a disinterested
person . . . .”
The U.S. Trustee’s Fee Objection centers around an undisclosed personal relationship
between one of Jackson Walker’s former attorneys, Elizabeth Freeman (“Ms. Freeman”), and
former bankruptcy Judge David Jones (“Jones”), who served as a mediator in the GWG
Bankruptcy Case. In the Fee Objection, the U.S. Trustee asserts that Ms. Freeman’s relationship
with Jones rendered her and Jackson Walker ineligible to be employed as counsel under § 32720
once Jones was proposed as a mediator, and therefore, the Court should deny Jackson Walker’s
Final Fee Application.21
For the Court to consider the GWG Settlement Motion, it would have to consider whether
it can approve the Final Fee Application, as contemplated by the Proposed Settlement, since the
Final Fee Application is still pending.22 The Proposed Settlement is conditioned upon a court order
that resolves and approves the Final Fee Application,23 while the U.S. Trustee, in his Fee
Objection, requests that the Court deny the Final Fee Application.24 Thus, granting the GWG
Settlement Motion before hearing the Final Fee Application and Fee Objection would moot the
Final Fee Application and Fee Objection. Contrariwise, sustaining the Fee Objection would
prevent review and possible approval of the GWG Settlement Motion. As such, the Court finds it
20 11 U.S.C. § 327.
21 Bankr. 22-90032, ECF No. 2415 at 35, 46.
22 Bankr. 22-90032, ECF No. 2158.
23 Case No. 4:23-CV-4787, ECF No. 100-1 at 3, 4.
24 Bankr. 22-90032, ECF No. 2415 at 35, 46.
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appropriate that the GWG Settlement Motion be heard concurrently with the consolidated trial on
the U.S. Trustee’s Vacatur Motions in the affected cases, which includes the Final Fee Application
and Fee Objection.
II. RECOMMENDATION
For the reasons stated supra, this Court recommends that the “Motion for Entry Approving
Compromise and Settlement Pursuant to Bankruptcy Rule 9019” filed on October 3, 2025 by
Michael I. Goldberg, in his capacity as the Trustee of the GWG Litigation25 be heard concurrently
with the consolidated trial on the U.S. Trustee’s Vacatur Motions in the affected cases, which
includes (i) “Jackson Walker’s Fourth and Final Fee Application for Allowance and Payment of
Fees and Expenses as Co- Counsel to the Debtors for the Period from April 20, 2022 through June
20, 2023”26 and (ii) “United States Trustee’s Opposition to Jackson Walker’s Final Fee
Application as Co-Counsel to the Debtors and Motion for Sanctions and Related Relief.” 27
SIGNED January 22, 2026
________________________________
Eduardo V. Rodriguez
Chief United States Bankruptcy Judge
25 Case No. 4:23-CV-4787, ECF No. 100.
26 Bankr. 22-90032, ECF No. 2158.
27 Bankr. 22-90032, ECF No. 2415.
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