Bankrupt Dewey & LeBoeuf LLP asked a judge to approve payments at customary rates of as much as $935 an hour for partners of its lead law firm, Togut Segal & Segal LLP.
Dewey, which failed on May 28 owing more than $225 million to secured lenders, is seeking to hire at least nine firms to assist with the liquidation, according to federal court filings in Manhattan.
Billing rates for top officers at Zolfo Cooper Management LLC, its restructuring firm, are as much as $825 an hour. The press advisory firm Sitrick & Co. charges as much as $895 hourly for its top people, according to June 15 filings.
Fees charged by firms that failed because they can’t pay their lenders are attracting attention from the U.S. Justice Department. Clifford J. White, director of the department’s U.S. Trustee, which oversees bankruptcies, has said the “eye- catching” fees are “difficult to explain in the current economic environment,” according to an article by White on the Justice Department’s website.
Thomas Mulligan, an executive at Sitrick, declined to comment on the fees that will be billed to Dewey.
Dewey guaranteed about 100 partners about $100 million, according to people familiar with the firm’s finances. Steven Davis, the former chairman, was ousted on April 29 after Manhattan District Attorney Cyrus Vance Jr. started a probe into possible wrongdoing at Dewey, according to an internal Dewey memo to partners that day. He has denied wrongdoing.
The case is In re Dewey & LeBoeuf LLP, 12-12321, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Linda Sandler in New York at firstname.lastname@example.org.