Law Firms

Ex-Dewey Partners Agree to Pay at Least $50M; Proposed Individual Payments Between $5K and $3.5M

Former Dewey & LeBoeuf partners agreed today to pay at least $50 million toward a bankruptcy court settlement, Reuters is reporting.

The defunct firm, which filed for bankruptcy in May, owes creditors approximately $315 million, according to court filings. If the the settlement is approved, former partners will pay between $5,000 and $3.5 million. Reuters reports that retired partners would be the individuals paying $5,000 a piece.

Everyone may not agree with the proposal. A committee representing former Dewey partners today asked that an independent examiner be appointed to examine the proposal, to ensure it’s fair. The group in court documents has objected to lawyers leading Dewey’s wind-down team, on the basis they gave preferential treatment to high earners.

The settlement proposal today follows one put out in July, which called for former partners to pay $104 million, with individual payments ranging from $25,000 and $3 million.

Partners can accept the deal after Thursday’s deadline, but must pay a 25 percent penalty. Those who don’t accept the deal may be vulnerable to claw-back litigation, according to Reuters.

Also, the Dewey estate may seek an additional $60 million from former partners in unfinished-business claims. A former Dewey partner told Reuters that he expected tol lose a year’s worth of income between agreement and money owed to Barclays, which sought repayment for a loan covering capital he paid into Dewey.

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.