Dewey Lawyer Says Firm Is Negotiating Deal with Ex-Partners; Judge Rejects Funding Motion
Posted May 30, 2012 5:46 AM CST
By Debra Cassens Weiss
A lawyer representing Dewey & LeBoeuf told a bankruptcy judge on Tuesday that the firm is negotiating a settlement to recover money from former partners.
Speaking in a packed Manhattan courtroom, lawyer Albert Togut didn’t reveal details, report Reuters, the Am Law Daily and the New York Times DealBook blog. According to the Reuters coverage, Togut said the firm was “close” to a deal in which partners would pay a “significant” amount of money to the failed law firm. The other publications didn’t have those details; they report only that Togut hopes to reach a quick settlement.
A lawyer representing more than 50 former Dewey partners, Mark Zauderer, said settlement talks with his group were only preliminary. He said he had not heard the basis for contribution claims, and some of his clients may have offsetting claims against the law firm, the stories say.
Dewey filed for bankruptcy on Monday evening, listing $315 million in liabilities.
Much of the hearing on Tuesday concerned whether Dewey could use collateral to fund the bankruptcy. U.S. Bankruptcy Judge Martin Glenn refused to grant lenders a lien on the proceeds of future litigation in exchange for allowing Dewey to use their collateral. He said the lenders' lien demand was unreasonable and ordered the parties to negotiate a new deal to fund the wind-down, Reuters says.
Recent prior coverage:
ABAJournal.com: "Dewey Partners in Name Only Led to Breakup, Looming Battles, Likely Clawback Fight, Columnist Says"
ABAJournal.com: "Are Dewey’s Problems Unique? ‘Leverage Is Dangerous,’ Ex-Partner Bienenstock Says"
ABAJournal.com: "Dewey Files for Bankruptcy, Lists More than $300M in Debt"