After lying low for more than a week, Dewey & LeBoeuf’s estate is back in court, this time asking a judge to approve a proposed clawback settlement with former partners.
The firm paid $432 million to 670 partners in 2011 and 2012. According to court filings, it has recovered approximately $71 million from more than 400 of those partners. Ultimately, it hopes to raise $89 million in contributions, slightly less than the $90.4 million it originally sought.
In return for their contributions, partners will be exempt from any future lawsuits related to the firm’s demise, although ex-partners and their current firms may face claims for unfinished legal business transferred from Dewey.
In its request, Dewey’s estate urged the bankruptcy court to approve the settlement, arguing that “the alternative to the [settlement]—commencing over 400 cases that each turn on unique facts—could involve substantial risk and uncertainty.”
The firm also sought to forestall a motion by a group of retirees to appoint an independent trustee to oversee the bankruptcy. The former partners argue that the settlement favors highly paid partners and firm management, but Dewey maintains that their request for a trustee is “proof that their goal is destruction of a landmark agreement.”
The now-defunct Dewey filed for Chapter 11 bankruptcy protection on May 28, and reportedly owes as much as $560 million to creditors. A hearing on the proposed settlement is scheduled for Sept. 20.
And for more of InsideCounsel’s Dewey coverage, see: