Clawback suits seek money paid by Dewey & LeBoeuf to bank, law firms and others while insolvent
Applying a rule that prevents a debtor from preferentially paying some creditors during the 90 days before seeking bankruptcy protection, the trustee for Dewey & LeBoeuf filed a dozen lawsuits Friday seeking to claw back funds from those they say received an extra share of the failing law firm’s money in the three months before it sought Chapter 11 liquidation in federal court last year.
The suits, which seek $5.7 million from the Bank of America and amounts ranging from tens to hundreds of thousands of dollars from law firms and other creditors, are the first wave of such claims, attorney Joseph Steinfeld told the Am Law Daily. His firm, ASK LLP, filed the suits for trustee Alan Jacobs.
A liquidation plan in the Manhattan case was approved early this year.
Meanwhile, attorney Allan Diamond, who was retained to help the Dewey estate recover from former partners, said he is starting to send demand letters to those who didn’t voluntarily agree to participate in a partner contribution plan. These individuals should, he said, expect to pay more than they would have under the PCP.
“I don’t believe Jacobs will settle with anyone for amounts anywhere near as low as the PCP,” Diamond told the Am Law Daily. “If anyone thought that, they should have rethought that.”
ABAJournal.com: “Top 25 Partners Got $70M in Dewey’s Last Year; Unsecured Creditors May See 15 Cents Per Dollar”
ABAJournal.com: “Era of great expectations for BigLaw ended with bankruptcy of Howrey, Dewey and others, say experts”
ABAJournal.com: “Former Dewey partner settles $200K capital loan dispute with Citibank”
ABAJournal.com: “Judge OKs $19.5M settlement over claimed Dewey mismanagement”