Dewey Settled Malpractice Suit in February; Insurance Regulators Initially Sought $3B
Posted May 21, 2012 6:39 AM CDT
By Debra Cassens Weiss
As troubles were mounting at Dewey & LeBoeuf earlier this year, the law firm settled a $3 billion suit filed by Missouri insurance regulators that claimed malpractice by predecessor firm LeBoeuf, Lamb, Greene & MacRae.
The amount of the settlement, reached in February, has not been disclosed, the Am Law Daily reports. One source, however, told the publication the amount was less than the $18 million paid by another defendant, and it was covered by insurance. The policy has a $2 million deductible, the story says.
The suit accused LeBoeuf of improperly advising General American Life Insurance Co. in 1999 to be placed in receivership before it was sold to law firm client MetLife. One of the lawyers on the matter, the complaint said, was Alexander Dye, who is accused of telling General American to sell itself to MetLife for a discounted price of $1.2 billion.
The law firm has said it provided “sound and appropriate legal advice” and it disclosed the dual representation. Expert testimony supported Dewey’s defense, the Am Law Daily says. The expert said MetLife actually overpaid for General American.
According to the story, Shook, Hardy & Bacon represented Dewey. It’s not known if Shook Hardy has been paid.
Dye was in the news when he jumped to Willkie Farr & Gallagher with 12 Dewey partners in mid-March, a move some saw as precipitating more defections. According to previous coverage in the New York Times, Dye had joined with another lawyer in a bid to replace chairman Steven Davis before the 2007 merger that created Dewey & LeBoeuf. The Times reported that Davis confronted Dye and the other lawyer with embarrassing emails they had written and they were forced from their management posts. Dye did not comment when contacted by the Am Law Daily.