Add a U.S. bankruptcy trustee to the list of people who aren't pleased with Dewey & LeBoeuf’s proposed post-bankruptcy plans.
Just days after a group of Dewey retirees voiced their objections to a settlement that would shield them from future lawsuits in exchange for cash, the firm’s bankruptcy trustee has rejected another of its proposals. In a court filing Wednesday, Tracy Hope Davis nixed a plan to dole out bonuses to Dewey’s remaining employees, saying that the firm had not provided enough information to show that the arrangement was economically feasible.
Fifty-two employees have remained at Dewey to bill clients and collect fees. Earlier this month, the firm proposed to reward them with up to $700,000 in bonuses: $450,000 in incentive and retention payments for nonmanagerial workers and up $250,000 in bonuses for higher-level employees, dependent on their ability to collect on outstanding bills.
Davis said the plan could not be justified, as Dewey is no longer operating as a normal business. The firm, which filed for Chapter 11 bankruptcy in May, owes more than $315 million to creditors.
Read more on the story at Reuters.
For more InsideCounsel coverage of Dewey & LeBoeuf, read:
Dewey retirees unhappy with proposed settlement
Dewey offers former partners a deal
Dewey looks to pay remaining staff $700,000 in bonuses
Former Dewey partner sues management, claims they were “running a Ponzi scheme”
Dewey finally files for bankruptcy
Regulators sue Dewey, Warsaw office transfers to Greenberg Traurig
Dewey’s leaders discuss downfall, next steps
Exodus of Dewey attorneys in full effect
Dewey warns employees that firm could shut down
Dewey encourages partners to jump ship
N.Y. prosecutors probe Dewey & LeBoeuf, firm cuts ties with executive
Dewey & LeBoeuf overhauls management team amid more defections
