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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`IN RE:
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`Professional Fee Matters Concerning the
`Jackson Walker Law Firm
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`CASE NO: 4:23-CV-4787
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`REPORT AND RECOMMENDATION
`TO THE UNITED STATES DISTRICT COURT
`Regarding ECF No. 100
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`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 Motions 2 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
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`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. 9 1, 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
`Case 4:23-cv-04787 Document 169 Filed 01/22/26 in TXSD Page 1 of 5
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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
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`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.
`Case 4:23-cv-04787 Document 169 Filed 01/22/26 in TXSD Page 2 of 5
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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
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`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
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`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
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`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
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`________________________________
`Eduardo V. Rodriguez
`Chief United States Bankruptcy Judge
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`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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