Dewey & LeBoeuf Creditors to Hire $1,055-an-Hour Lawyer
Creditors of bankrupt Dewey & LeBoeuf LLP asked a judge to approve payments of $1,055 an hour for their lawyer, Edward Weisfelner, in at least the 10th request for professionals to assist with the law firm’s liquidation.
Dewey’s unsecured creditors, who won’t get a dime until banks and bondholders take more than $225 million, have a committee drawn from a legal recruiting firm, a car service and an equipment leasing company. Weisfelner is needed to help in their discussions with Dewey, to analyze Dewey’s handling of the wind down and to represent them in court, they said today in a filing in U.S. Bankruptcy Court in Manhattan.
Weisfelner, a creditors’ lawyer who runs Brown Rudnick LLP’s bankruptcy group, has worked for billionaire Carl Icahn in his dealings with Trump Taj Mahal and served creditors’ committees in the bankruptcies of Lyondell Chemical Co., Six Flags Inc. and Global Crossing Ltd.
Dewey failed in May after piling on debt to expand and pay partners. It wants to hire at least nine other firms to liquidate it, according to filings. Clifford J. White, director of the U.S. Justice Department’s office that oversees bankruptcies, has said professionals’ “eye-catching” fees are “difficult to explain in the current economic environment.”
Dewey has said it expects to pay as much as $935 an hour for partners of its lead law firm, Togut Segal & Segal LLP. Its press advisory firm Sitrick & Co. charges as much as $895 hourly for its top people.
Thomas Mulligan, an executive at Sitrick, has declined to comment on the fees that will be billed to Dewey.
Most law firms have few assets, and rely on collecting bills to pay lenders. Dewey is hiring an agent to help collect $217.4 million in billed and unbilled charges to clients.
Dewey guaranteed about 100 partners a total of 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.
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