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 email@example.com