Law Firms

Former Dewey chairman agrees to pay more than $500K to settle mismanagement claim

Updated: Former Dewey & LeBoeuf chairman Steven Davis has agreed to pay $511,000 to settle a mismanagement claim related to the law firm’s collapse.

The proposed settlement is between Davis, the trustee in the Dewey bankruptcy, and the liability insurer for Dewey’s management, according to the Wall Street Journal Law Blog (sub. reg). Davis does not admit wrongdoing in the proposed settlement.

The insurer, XL Specialty Insurance Co., agreed to pay $19 million, Reuters reports.

In court papers, Edward Weisfelner, speaking for liquidation trustee Alan Jacobs, said the settlement is preferable to litigation, according to the Reuters account. Litigation of management claims “would require extensive discovery, including millions of pages of documents to review and over 100 depositions,” Weisfelner said.

A hearing on the proposed settlement is scheduled for May 13.

Updated at 11:35 a.m. to include information from Reuters.

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