After a prolonged losing streak, Dewey & LeBoeuf finally got some good news yesterday, when a federal bankruptcy judge approved the firm’s plan to pay $700,000 in bonuses to its remaining employees.
The decision comes little more than a week after a U.S. bankruptcy trustee rejected the bonus proposal, saying that the firm had not provided sufficient information to show that the arrangement was economically feasible.
But Judge Martin Glenn was more amenable to Dewey’s plan, approving nearly all of Dewey’s requests, with the exception of a plan to pay workers up to $100,000 in discretionary funds. In his order, Judge Glenn said that “the cost of the Retention Plan is reasonable in light of the possible consequences the Debtor would face if it were unable to stop more Employees from leaving.” Dewey had previously complained of losing 102 of the 150 employees who originally stayed to wind down the firm’s operations and collect legal fees.
Under the current plan, nonmanagerial employees can earn extra retention pay by staying with the firm past a certain date. Three other employees, including Dewey’s billing and collections manager, could receive extra incentive pay, based on their ability to collect outstanding fees from clients.
The bankrupt firm hopes to collect from more than just its ex-customers; it’s also trying to recoup up to $90.4 million in a clawback settlement with former partners, who have until Aug. 7 to sign on to the deal.
Read more at the Wall Street Journal and Reuters.
And for more InsideCounsel coverage of Dewey, see:
Time winding down on Dewey & LeBoeuf’s new clawback proposal
Dewey & LeBoeuf offers new settlement to ex-partners
Dissecting Dewey’s money management
Dewey paid executive partner $190,000 after bankruptcy filing
Dewey to revise proposed clawback settlement with ex-partners
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”
