Dewey to propose settlement to ex-partners

A meeting is scheduled for tomorrow, but the firm’s creditors’ committee says settlement progress is being over-sold

Dealing with the aftermath hasn’t been any more fun than watching the ship sink. New York law firm Dewey & LeBoeuf still has a long way to go before it’s finished winding down from its May 28 bankruptcy filing.

The latest bit of drama comes from a report yesterday that Dewey will present some of its former partners with a settlement proposal on Wednesday. The firm has been trying to recover funds from its former attorneys who jumped ship prior to its official demise.

In the suit, Bunsow claims they misrepresented Dewey's financial performance and stability in an effort to recruit partners at other firms. He also asserts that the defendants then used the capital brought in by the new talent to pay favored partners and not run the firm. In a particularly scathing section of the complaint, Bunsow says that the firm’s management was "running a Ponzi scheme in order to enrich themselves and select partner of the Firm."

Additionally, last week, the firm announced that it hopes to pay its 52 remaining workers up to $700,000 in bonuses in an effort to keep them happy and stick out however long it will take to finish dismantling what’s left of the defunct firm.

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