Posted Feb 27, 2013 08:58 pm CST
In the latest milestone in a massive Chapter 11 bankruptcy case that has proceeded with unusual speed, a federal bankruptcy court judge on Wednesday approved a liquidation plan for Dewey & LeBoeuf, reports the Wall Street Journal Law Blog (sub. req.).
“The court is very pleased, I want to congratulate all the professionals,” Judge Martin Glenn said as he gave the plan the green light.
“Here we are about to make history,” said Al. Togut, the lead lawyer for Dewey, before the judge OK’d the liquidation plan. “This the diametric opposite of Finley Kumble, which took 20 years, or Shea & Gould, which took nine years, and even the modern-day Coudert Brothers case, which still isn’t done.”
The DealBook blog of the New York Times reported Togut’s comment and notes that a probe by the Manhattan district attorney’s office concerning possible criminal conduct by two former Dewey leaders concerning the law firm’s finances is still ongoing.
An Am Law Daily article published earlier recaps previous developments in the case, which was filed May 28 in New York.
Although some partners had objected, saying that those with ties to law firm leaders had done better, others agreed to fund a $70 million settlement in exchange for protection from future liability for Dewey debts.
No one expects that creditors will be paid in full—secured creditors are owed over $262 million, while unsecured creditors account for another $300 million or so in debt. Under the plan, secured creditors get 80 percent of what is distributed by the bankruptcy estate, and unsecured creditors get 20 percent.
Updated at 5:18 p.m. to include information from subsequent DealBook article.