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Dewey bankruptcy plan officially approved
A decision to finally approve the largest law firm bankruptcy in US history has been finalised, ending nine-months of bickering over how New York law firm Dewey & LeBoeuf would be dissolved.
New York: Dewey plan gets green light
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Federal bankruptcy judge Martin Glenn confirmed the plan yesterday, telling a packed Manhattan courtroom: ‘The court is very pleased. I want to congratulate all the professionals.’
Compensation
According to Deal Book, the liquidation plan sets out how Dewey’s estate will compensate creditors, which have claims adding up to about $550 million. The proposal suggests an innovative arrangement under which some 450 former Dewey partners agreed to return a portion of their pay, raising about $72 million for creditors.
The Dewey partners will protect themselves from future law suits connected to the firm if they accept the deal.
Al Togut, Dewey’s lead bankruptcy lawyer, said that the liquidation of Dewey had moved far more rapidly than previous liquidations of other large law firms.
Legal invoices
Trustees will now begin to return money to Dewey’s creditors, which include the firm’s lenders Citigroup and JPMorgan among others. A significant portion of the funds are expected to be raised through the collection of Dewey’s outstanding legal invoices.
