Bankrupt Dewey’s Bonus, Retention Plan Faulted by Trustee

Dewey & LeBoeuf LLP was assailed by the U.S. trustee who supervises bankruptcies over bonus and retention plans that she said may not be cost effective or economically feasible for a liquidating law firm.

Dewey, which owes secured lenders more than $225 million, now employs 52 people, plus managers, to bill former clients and collect money with help from an operational staff. Retention payments of $450,000 might not be economically feasible and the liquidating firm hasn’t provided information to support its bonus plan, the trustee, Tracy Hope Davis, said in a filing today in U.S. Bankruptcy Court in Manhattan.

The defunct firm is proposing to pay as much as $700,000 in bonuses. Davis, who oversees bankruptcies in the New York region, earlier criticized nine of Dewey’s proposals to hire advisers, including the law firm Togut Segal & Segal LLP, and a six-week budget of $7 million for paying the firms. A judge approved several of the hirings anyway.

Albert Togut declined to comment on the trustee’s latest objections.

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

To contact the editor responsible for this story: John Pickering at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.