Bankrupt law firm Dewey & LeBoeuf will present some of its former partners with a proposed settlement on Wednesday as it tries to recover money from lawyers who departed as the firm was near collapse, a Dewey lawyer said.
Al Togut, the lawyer leading Dewey through bankruptcy, said at a court hearing on Monday that the firm will offer dollar figures for proposed payments by former partners at a meeting with them on Wednesday.
Dewey could have claims against partners who received hefty salary guarantees, as well as partners perceived to have taken value from the firm when their clients followed them to new firms. It is unclear exactly which partners would be asked to return money under Dewey's proposal, and how much each individual partner would be asked to return.
But the creditors' committee of Dewey said Togut was over-selling the progress of settlement talks. None of Dewey's creditor constituencies have signed off on a dollar figure for a settlement, said Ed Weisfelner, a lawyer for the committee.
"There are a lot of hours between now and Wednesday, and hopefully we'll reach some closure," Weisfelner said. "I would have thought Dewey would seek approval, a thumbs-up, from its creditor constituencies."
Most of Dewey's 300 partners defected to other firms earlier this year as the firm struggled with high debt and ultimately filed for Chapter 11 protection in U.S. Bankruptcy Court in Manhattan on May 28. The Manhattan District Attorney's Office has launched a probe into the firm's former chairman, Steven Davis, who has denied wrongdoing.
When Dewey filed for bankruptcy, Togut said the firm was close to a settlement with former partners. On Monday, he said the process has been held up, in part due to delays in document production.
The case is In re Dewey & LeBoeuf LLP, U.S. Bankruptcy Court, Southern District of New York, No. 12-12321. (Reporting by Nick Brown; editing by Matthew Lewis)