Dewey & LeBoeuf is backing off of a proposed clawback settlement with its former partners after meeting with heavy criticism from some ex-employees earlier this week, according to emails obtained by the Wall Street Journal.
The firm has extended the deadline for reaching a settlement from July 24 to Aug. 7, and will reportedly modify the settlement to reflect partners’ concerns. Joff Mitchell, the estate’s chief restructuring officer, will present these modifications at a July 26 meeting with ex-partners in Manhattan.
In an effort to cover $315 million worth of debts, Dewey devised a clawback plan that would have shielded former partners from future liability in exchange for payments of between $25,000 and $3 million, depending on partners’ salaries during the past two years. But one group of 53 retirees criticized the plan this week, arguing that it favored highly paid partners and protected former executives, who some blame for the firm’s collapse.
Earlier this week, a U.S. bankruptcy trustee also rejected a plan that would have paid the firm’s remaining employees up to $700,000 in retention compensation and bonuses.
Read more analysis at the Wall Street Journal.
For more InsideCounsel coverage of Dewey & LeBoeuf, see:
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
