Earlier this week, we wrote about the lavish payments that Dewey & LeBoeuf made to its former executive director, Stephen DiCarmine, and its former chief financial officer, Joel Sanders, in the year leading up to the firm’s bankruptcy filing. Each man received almost $3 million in salary, bonuses, and expense reimbursement. (There’s additional detail and number crunching over at The Lawyer.)
Today we bring you additional interesting information from — and speculation about — the Dewey bankruptcy filings. For starters, who are the two Dewey partners who received more than $6 million each in the year leading up to the Chapter 11 petition?
All of these tasty nuggets, by the way, come from the statement of financial affairs that was filed by Dewey as debtor. If you’d like to access the statement and poke around the 350-plus pages, flip ahead to the next page of this post.
According to the statement, two partners received more than $6 million in the one-year period prior to the bankruptcy filing. They are identified as Employee #06512 and Employee #06780; we’ll refer to them, respectively, as “Partner A” and “Partner B.”
As you can see from the schedules (posted in full on the next page), Partner A received more than $6.6 million from Dewey in partner draws, distributions, expense reimbursements, and “imputed out of town living,” including a $2 million distribution on January 27, 2012. Partner B received more than $6.7 million from Dewey in draws, distributions, and reimbursements, including $264,000 on May 21, 2012 — just days before Dewey filed for bankruptcy, and during a time when numerous creditors and other partners couldn’t squeeze money out of the firm.
Who are these $6 million men? The source who highlighted these partners for us wondered if they might be litigator Jeffrey Kessler, now at Winston & Strawn, and M&A lawyer Morton Pierce, now at White & Case. Given these rainmakers’ big books of businesses, Kessler and Pierce aren’t bad guesses.
But commenters on our prior post floated different names. We’ll start with this comment:
The payments to Alfonse and Gaston are only part of the story. The firm was deep under water in 2012. Yet, partner #06780 received $391,666.97 on March 14th, $264,166.67 on May 4th, and $264,166.67 on May 21st, Partner #0953 got profit distributions of $235,323.49 on April 9 of $124,727.19 on April 19th. Partner #09537 received $117,661.74 on April 9 and another $62,363,59 on April 19th. Partner # 11612 received $1.2 million on March 7. Partner #86059 received $236,982.15 on April 25th plus $27,150.75 of “partner draw”, plus more than that on March 29th. Partner #86061 received $100,000 on April 24th, and then $42,000 on May 17th, another $100,000 on May 21st, plus another $25,000 draw on May 21st, and yet another $42,000 on May 22..
Who knows who these talented partners are? Let’s out them.
And why were they singled out for this generosity? What do they have in common with the daring duo, other than pockets lined with cash?
This commenter — perhaps a former accounting or finance employee at Dewey? — responded as follows, quite confidently:
Partner # 06780 = Berge Setrakian
Partner # 09537 = Louise Roman Bernstein
Partner # 11612 = Richard Climan
Partner # 86059 = Lejb Fogelman
Partner # 86061 = Stephen Horvath
Partner #06780, of course, is the “Partner B” who received some $6.75 million from Dewey in the year preceding the bankruptcy. We welcome your guesses as to the identities of Partner A and Partner B, or any other former Dewey partners listed in the schedules, in the comments to this post.
Some former D&L partners expressed dissatisfaction with the original version of the proposed settlement between the firm’s bankruptcy estate and the ex-partners, which requires participating partners to pay money back in to the Dewey estate. But to some of the partners who mysteriously received large sums from Dewey during the firm’s final days, maybe that settlement — or even the revised version of it — is starting to look pretty darn good.
(If you’re interested, check out Dewey’s statement of financial affairs, as well as the payment schedules for Partner A and Partner B, on the next page.)