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 yesterday 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).
Law Firm Starting Salaries in Drop 35 Percent Over Two Years
Starting salaries for those who join law firms have fallen 35 percent over the past two years.
The median law firm starting salary in 2009 was $130,000. By 2010 it was $104,000, and for the Class of 2011, it has dipped below six figures to $85,000, according to the National Association for Law Placement.
Associates at the biggest law firms can still expect an annual starting salary of around $160,000, but there are fewer of those jobs, which explains what’s dragging down the median.
For all law graduates, whether they work in law firms or elsewhere, the median has fallen 17 percent over the past two years to $60,000.
The latest research comes on the heels of a June report that only 55 percent of the Class of 2011 found permanent full-time jobs that required passing the bar. The class of 2012 sits for the bar exam next week.
News Corp. Didn’t Disclose Executive’s Phone-Hacking E-Mail
News Corp.’s British publishing unit failed for months to disclose in civil litigation an executive’s e-mail with instructions on hacking the mobile-phone voice-mail of a “well-known person.”
The e-mail was found by the company in March during a required search for evidence and was only shared with victims yesterday, after police alerted them to its existence, David Sherborne, a lawyer for dozens of people who had their messages intercepted, said at a London hearing yesterday.
“We had to be told about it by police, even though News International knew about it,” Sherborne said, referring to the unit. “We have a real concern about the way this disclosure is being conducted” because the e-mail is of “enormous significance” in the overall case, he said.
News Corp., the New York-based company controlled by Chairman Rupert Murdoch, is trying to move on from the scandal after the victims’ civil case and a parallel media-ethics probe that began last year revealed damaging e-mails and text messages about hacking and other wrongdoing. Judge Geoffrey Vos, who is overseeing the civil cases, said in January the company destroyed evidence to hide the extent of the problem.
Lawyers with Linklaters LLP, which represents News International, said they discovered the e-mail in the context of a separate phone-hacking search requested by police and that they forgot to give it to victims in the civil case.
Vos said the London-based law firm apologized for the oversight and that he believed its explanation of what happened. The identities of the executive who wrote the e-mail and the person it was about should remain secret, he said, to prevent the information from affecting related criminal cases.
While Sherborne didn’t challenge the explanation, he said the oversight raised concerns the company’s process of carrying out court-ordered searches for e-mail evidence may be inadequate, and that e-mails of equal importance may not yet have been discovered.
The hacking scandal at News Corp.’s News of the World newspaper led to the title’s closing a year ago and triggered a related bribery probe into the company’s Sun tabloid. About 60 people have been arrested, including former News International Chief Executive Officer Rebekah Brooks, who was charged in May with conspiring to cover up the hacking scandal.
The company seeks to settle about 50 combined civil lawsuits before a trial scheduled for February, with lawyers saying the number of victims in the case may rise to about 100 by then. A trial scheduled for earlier this year was canceled after an initial group of test lawsuits were settled.
News International’s lawyer Michael Silverleaf said yesterday about 250 alleged victims have sought out-of-court settlements with the company, using a procedure it created that’s overseen by a former judge. He said about 79 deals have been reached and they aren’t part of the current case.
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FIFA Appoints Kirkland’s Garcia to Combat Graft in Soccer
World soccer ruling body FIFA named former U.S. Attorney and Kirkland & Ellis LLP partner Michael Garcia as main prosecutor in an ethics probe.
FIFA also named German judge Hans-Joachim Eckert to head a judicial body as part of its plans to combat corruption. The moves were announced at a FIFA news conference in Zurich.
The appointments follow the release of court papers on a kickbacks scandal and allegations of vote-buying surrounding the selection of World Cup hosts.
Garcia is a partner in the government and internal investigations practice in Kirkland’s New York and Washington offices. He served as the U.S. Attorney for the Southern District of New York from 2005 to 2008.
Under Garcia, Southern District prosecutors brought charges against an alleged heroin trafficker extradited from Afghanistan; senior executives at Duane Reade Inc. and Refco Inc. for securities fraud; and an accused Russian arms dealer for outfitting a Marxist guerrilla group in Colombia.
Kirkland has about 1,500 lawyers in 10 offices in the U.S., Europe and Asia.
Cogeco Cable Agrees to Buy Atlantic Broadband for $1.36 Billion
Cogeco Cable Inc., the Montreal-based cable-television company, agreed to buy Atlantic Broadband for $1.36 billion, helping it expand into the U.S.
Simpson Thacher & Bartlett LLP and Stikeman Elliott LLP are representing Cogeco in the transaction. The Simpson Thacher team is led by corporate mergers and acquisition partner Gary Horowitz. Additional partners include Ellen Patterson, mergers and acquisitions; Rob Holo, tax; James Cross, banking and credit; and David Rubinsky, executive compensation and employee benefits.
Stikeman’s legal team included Warren Katz, mergers and acquisitions; and Jean Lamothe and Sylvia Avedis, financial services.
Kirkland & Ellis LLP represents Abry Partners and its portfolio company Atlantic Broadband. The Kirkland team is led by partners Armand Della Monica and Joshua Kogan in New York.
Wiley Rein LLP represents Cogeco Cable Inc., providing communications regulatory advice on the proposed transaction. Communications partners James R.W. Bayes, Wayne D. Johnsen and Thomas J. Navin are lead lawyers for Wiley Rein in this matter.
Cogeco is purchasing the company from Abry Partners and Oak Hill Capital Partners in a deal that’s expected to be completed by the end of the year, the Canadian company said yesterday in a statement. Gleacher & Co. was the financial adviser on the transaction, Cogeco said.
Cogeco is pushing into the U.S. after abandoning the struggling European market, where it wrote off the value of its Portuguese unit Cabovisao-Televisao por Cabo SA and lost $248 million last year. The purchase of Atlantic Broadband also helps reduce its dependence on Canada, where it competes with larger cable operators Rogers Communications Inc., BCE Inc., Telus Corp. and Shaw Communications Inc.
Atlantic was formed in 2003 after it purchased cable systems from St. Louis-based Charter Communications Inc., the fourth-largest U.S. cable system. It operates cable systems in four main areas around Western Pennsylvania, Miami Beach, Maryland and South Carolina.
King & Spalding Names New Managing Partners in Two Offices
King & Spalding LLP has appointed new managing partners in its Atlanta and Singapore offices. Alan J. Prince will be the new managing partner for the firm’s Atlanta office and John Savage will take the helm in Singapore.
Prince and Savage replace Mason W. Stephenson and Philip R. Weems. Stephenson has been King & Spalding’s first and only office managing partner in Atlanta, and after 10 years in that role, has decided to refocus on his real estate practice, the firm said. Weems, who will continue to serve as co-leader of the firm’s global energy practice, will return to the Houston office, while maintaining his practice in the Asia-Pacific region.
Prince is a partner in King & Spalding’s corporate practice group. He has experience with corporate finance transactions and mergers and acquisitions, and advises public companies on SEC reporting and disclosure matters and corporate governance issues. He also serves as a counselor to public company boards of directors.
Savage is a partner in the firm’s international arbitration practice group and a founding member of the Singapore office. He has worked in Asia for over 10 years and is the regional arbitration practice’s leader, the firm said.
King & Spalding has 800 lawyers in 17 offices in the U.S., Europe, the Middle East and Asia.
Houston Trial Lawyer Graham Hill Joins Heard Robins
Heard Robins Cloud & Black LLP announced that trial lawyer Graham Hill has joined the firm as a partner in Houston. Hill, who will focus his practice on commercial business litigation, class-action mass torts and products liability, was previously a partner at Locke Lord LLP, the firm said.
Hill has represented clients in Texas and throughout the U.S. for more than 30 years. His courtroom accomplishments include handling the nation’s first courtroom trial over the recalled diet drug Fen-Phen and negotiating a $1 billion class-action settlement for patients harmed by defective hip implants, the firm said.
He is a former chairman of the Houston Bar Association’s Litigation Committee and former president of the Houston Trial Lawyers Association.
Heard Robins is a civil law boutique focusing on commercial and tort litigation. The firm has offices in Houston, Santa Fe, New Mexico and Baton Rouge, Louisiana.
DLA Piper Hires Energy, Real Estate and Maritime Partner
DLA Piper LLP announced that Glenn A. Reitman has joined the corporate and finance practice as a partner in the Houston office. He was previously a partner at Thompson & Knight LLP, the firm said.
Reitman’s practice includes project finance, structured finance, leveraged buyouts, restructurings and reorganizations, financings in master limited partnership transactions, private equity, derivatives and workouts. He counsels U.S. and international financial institutions and borrowers in commercial and real estate finance transactions with a focus on energy, commercial and real estate. Reitman also has experience in maritime transactions, including construction, finance, acquisition and divestitures, time and bareboat charters, the firm said in a statement.
DLA Piper has 4,200 lawyers in 31 countries and 77 offices throughout the Americas, Europe, Middle East, Asia and Australia.
Venable Hires New York Partner for Labor and Employment Group
Venable LLP has added labor and employment defense litigator Brian J. Clark as a partner in its New York office.
Clark joins from Clifton Budd & DeMaria LLP, and previously served in the Office of the Solicitor at the U.S. Labor Department, the firm said.
Clark represents private and public sector management-side clients in labor, discrimination, wrongful discharge, benefits and other labor and employment-related suits. He has been active in the health-care field, representing both major hospitals and care organizations in employment related issues, the firm said.
Venable has more than 500 lawyers with seven U.S. offices.