Houston Bankruptcy Court Is A Hotbed Of Corruption

Texas has become the hub for corporate bankruptcy cases where big businesses try to avoid paying out lawsuits, and one judge in particular oversees most of those cases. So it shouldn’t be surprising to learn that this judge is about as corrupt as possible, and reports suggest that an illicit affair that he had with a corporate bankruptcy lawyer may have tainted countless bankruptcy proceedings. Mike Papantonio & Farron Cousins discuss more.

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*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Texas has become the hub for corporate bankruptcy cases where big businesses try to avoid paying out lawsuits and one judge in particular oversees most of those cases. So it shouldn't be surprising to learn that this judge is about as corrupt as possible and the reports that are coming are just as ugly as you can imagine. Bankruptcy court matters in this country, this judge and this relationship with law firms that he's with have bastardized justice, not just in Texas, but all over this country. Pick it up.

Yeah. What we have here is Judge David Jones, US bankruptcy Judge David Jones in Texas. And prior to this whole affair thing, New York, Delaware, that's where companies went to file bankruptcy. That's where all the businesses are either located or that's where they have their mailing address in Delaware. So that's where they would do bankruptcy. But then David Jones comes along and he says, you know what, I'm gonna make Texas the place for corporations to go to get their bankruptcy protections, whether they're trying to keep money away from their shareholders or keep it away from civil lawsuits. I'm gonna help them. And he did that and now Texas is the home of this. And in the process of this, he is having an affair with this corporate bankruptcy lawyer who fights for corporations to not have to pay.

Yeah. Elizabeth Freeman.

Elizabeth Freeman.

And she's with the Jones Law Firm over in Texas.

And also connections with Kirkland & Ellis.

Excuse me, Kirkland & Ellis.

Well, she had a couple. You're right there. And so she was associated with several of them and so what happens is he starts having an affair with her. She is getting all of these other lawyers, hey, bring your bankruptcy case down here to my guy and he'll handle it. And of course, they've highlighted several dozen cases that she brought to him that he, of course, ruled in favor of for the corporation, screwing over consumers and investors.

Right. So here's the point that you can't miss on this. Okay. The kind of rulings he would make would, would enable the corporation to keep money, to supposedly rebuild their company, when people who had lost millions of dollars are sitting out there saying, judge, they have enough money to pay us. Can't you make 'em pay us? No, no, no, no. They need that money for reorganization. Typically in bankruptcy court, a vendor, okay, a vendor who might sell coffee machines to the company, unfortunately, they have a higher position of being paid with the company that's in bankruptcy, if they've killed or crippled or done horrible things to thousands of people. That coffee vendor has a superior position to all those people who are injured. Now, that's where it begins.

Yeah.

That's just the overview. Here, he had people that were out there saying, judge, could you show us your math? And the judge would say, I'm not gonna show. That was his exact words, he says, that's not gonna happen. In other words, one company would say, they're worth $7 billion, judge. What are you doing? And the judge says, no, no, no, no, they're only worth $5 billion. And they'd say, well, can you show us the math? And he'd say, no, we're not gonna show you the math. It was a love affair. And Kirkland & Ellis, don't miss this point, this law firm that's one of the biggest law firms in the world, by the way, knows about this love affair. They absolutely, they joke about it. Hey, let's take it to Judge Jones because he'll give us everything we want. The corporation will get everything. The creditors will get nothing. These people who have their lives invested in this corporation on a chance, are gonna lose everything. I mean, that's what this is about.

And also to pay his girlfriend, he would have her listed as a referral attorney.