Dewey & LeBoeuf’s former chairman has agreed to pay more than $500,000 to settle claims that he mismanaged the law firm leading up to its collapse, the Wall Street Journal (WSJ) reports.
Steven Davis reached the agreement with the trustee responsible for Dewey’s liquidation and XL Specialty Insurance, which holds the firm’s management liability policy. If a federal bankruptcy court approves the deal on May 13, the insurance company will pay $19 million and be released from any additional claims covered by the policy.
The WSJ notes that the $511,145 Davis has agreed to pay is less than half of what some former Dewey partners returned to the firm as part of a $71.5 million clawback settlement reached last year. Under that deal, ex-partners paid between $5,000 and $3.5 million of their compensation in exchange for immunity against future lawsuits connected with the firm’s May 2012 bankruptcy.
Davis was facing several such lawsuits himself, as some ex-employees and creditors accused him and other members of the management team of misrepresenting the firm’s financial stability and promising hefty compensation packages to certain partners, without taking future performance into account.
In papers filed Monday, Davis continued to deny any wrongdoing connected with the firm’s collapse.
For more InsideCounsel coverage of the ongoing Dewey saga, see: