We’ll start with some aggregate numbers about the Plan. According to Am Law, the PCP “calls for 672 former firm partners to return between $5,000 and $3.5 million apiece in excess compensation received in 2011 and 2012, as well as additional money related to tax advances and unpaid capital contributions.”
As noted by the WSJ, the Plan seeks a total of $90.4 million, with a minimum participation threshold of $50 million (so about 56 percent participation, expressed in dollar terms). Thus far, it seems that about 25 percent of partners have signed up, which seems woefully inadequate. (But if those partners control a disproportionate share of the dollars, perhaps it might work.)
We got our grubby paws on a 15-page printout listing 569 of the 672 former partners, how much each received from Dewey in 2011 and 2012 (“Total 2011 & 2012 Payments”), and how much each is being asked to pay into the estate (“Final Contribution Amount”). Although only 569 partners are listed by name, as opposed to the 672 invited to participate, a footnote to the document states that “[p]artners who received less than $50,000 of payments in 2011 & 2012 and have no tax advances or unpaid capital due received offers to settle for $5,000 but are excluded from this list.” So that would appear to explain the 93 missing partners.
We decided to focus our attention on those partners who received $1 million or more from the firm in total 2011 and 2012 payments. This group included almost all of the major rainmakers, practice group leaders, and other movers and shakers at Dewey — which shouldn’t be surprising, given that breaking the $1 million compensation mark for about 18 months of work shouldn’t be that hard for a Biglaw partner to achieve (assuming the partner is reasonably senior). The total number of six-figure and seven-figure earners amounted to 109 partners, or about 19 percent of the names on the list.
(Interestingly enough, some 27 partners are shown on the document as receiving nothing from the firm in 2011 and 2012 payments, but are still being asked to contribute amounts ranging from $5,921 to $108,259. Presumably these contributions have to due with “tax advances or unpaid capital due” referred to in the footnote.)
For your viewing pleasure, here are the top 10 earners at Dewey in 2011 and 2012 (Google Doc here). The third column of the spreadsheet shows “Total 2011 & 2012 Payments,” and the fourth column shows “Final Contribution Amount” — i.e., what that partner is being asked to contribute:
Remember our earlier blind items about the two Dewey partners who received more than $6 million each in the year leading up to the Chapter 11 petition? Commenters suggested that they were Berge Setrakian and Ralph Ferrara — and it seems that those commenters were correct.
Ferrara and Setrakian are each being asked to contribute 27.3 percent of their total 2011 and 2012 earnings to the Plan. If you add up all the earnings and all the requested contributions for the top 10 partners, you get total comp of $67,849,392 and total requested contributions of $18,769,605, for a blended rate of 27.7 percent. It seems that Ferrara and Setrakian, the only two Dewey partners to break into the eight figures for their 2011 and 2012 earnings, aren’t getting much of a benefit from the $3.5 million cap on contribution amounts. That doesn’t mean it’s a bad deal for them, but just that the “cap” really isn’t doing any work here.
The list of top ten earners shouldn’t shock anyone. It was well-known around 1301 Avenue of the Americas that Setrakian, a prominent dealmaker who’s now at DLA Piper, and Ferrara, a leading securities litigator (and former GC of the SEC) who’s now at Proskauer, had huge pay packages. Most of the other names on the list should be familiar to ATL readers who have been following our Dewey coverage:
- John Altorelli: Perhaps best known as the former lover of Russian spy Anna Chapman, Altorelli is now at DLA Piper.
- Jeffrey Kessler: The former head of litigation at Dewey and member of the firm’s ill-fated “Office of the Chairman” took many of his fellow litigators over to Winston & Strawn.
- Michael Groll, Alexander Dye, and John Schwolsky: You might not remember them as much because this trio left before the stuff really hit the fan at Dewey. But their high-profile departure to Willkie Farr, along with about nine other insurance law partners, played a major role in the unraveling of Dewey.
- Lejb Fogelman: The Poland-based business lawyer is now at Greenberg Traurig, which picked up Dewey’s Polish operations. It seems that this was a pricey outpost for Dewey; you’ll see a number of Polish names on the big list of 100+ highest-paid partners at Dewey, available on the next page.
- Richard Climan: This M&A maven with a big book of business is now in the Silicon Valley office of Weil Gotshal.
- Michael Fitzgerald: Known for his Latin America transactional practice, Fitzgerald now practices at Paul Hastings.
Here are some other prominent players in the Dewey drama and how much they received from the firm in total 2011 and 2012 payments:
- Bruce Bennett: I was surprised to see that the prominent bankruptcy lawyer, now at Jones Day, did not make the million-dollar list. He received $850,646 from Dewey in 2011 and 2012.
- Martin Bienenstock: Another big-time bankruptcy lawyer, Bienenstock — whose hiring was a coup for Proskauer — didn’t earn as much as I expected: $3,158,726. Perhaps he was right when he stated, at various points during Dewey’s collapse, that he and the other members of the “Office of the Chairman” were trying their best to save the firm, even if they could have done better for themselves by bailing earlier.
- Henry Bunsow: The so-called “Angel of Death,” based on his having done time at three failed firms (Brobeck, Howrey, and Dewey), earned $2,180,705. He presumably will not be joining the settlement, since he believes — as set forth in his lawsuit against former firm leaders — that he was shortchanged.
- Steven Davis As it turns out, Dewey’s (rather unpopular) former chairman is not on the list, because he is not being invited to participate in the Plan.
- Bruno Gattai: The former head of Dewey’s Italian operations, which we covered quite a bit, Gattai earned a total of $3,750,919 in 2011 and 2012.
- Stephen Horvath III: One of two partners still at Dewey, where he’s working in a clean-up capacity, Horvath earned $1,437,500. He’s not being asked to contribute anything to the Plan, even though he’ll get the same release as everyone else (a development that some ex-partners aren’t fans of).
- Adam Kaiser: Partners should be able to act however they want to the bankruptcy estates of their failed firms — so who knows whether he’ll opt in to the PCP. This litigator, for whom we have special affection, received $1,287,667 in total 2011 and 2012 payments.
- Charles Landgraf: This former member of the Office of the Chairman, now at Arnold & Porter, just made the cut for our million-dollar list, with $1,047,500 in total payments.
- Londell McMillan Jr.: The high-profile entertainment lawyer was apparently not a high earner at Dewey, with just $537,500 in 2011 and 2012 payments.
- Janis Meyer: Like Stephen Horvath, Meyer is sticking around Dewey to clean up the mess (and being paid well for her efforts). She received $725,000 in total 2011/2012 payments, and she is not being asked to contribute anything to the Plan, even though she’ll get a release.
- Morton Pierce: The former vice chairman of Dewey and renowned dealmaker, who moved to White & Case, scored up just $4,018,304 from the firm in 2011 and 2012 payments. I’m guessing that Pierce, who famously claimed that the firm owes him $61 million, will not be keen on paying a shade over $1 million into the bankruptcy estate.
- Stuart Saft: The former head of Dewey’s real estate practice, Saft gave a controversial interview to Bloomberg Law in which he blamed headhunters and the media for his firm’s demise. Saft received $1,162,500 in total 2011 and 2012 payments.
- Richard Shutran: This M&A lawyer and Office of the Chairman member — now ensconced at O’Melveny & Myers, leonine hair and all — earned $2,846,371 in 2011 and 2012.
- Gordon Warnke: The former head of Dewey’s tax practice took his talents to Linklaters, whose U.S. tax practice he now leads. He received $3,577,204 in total payments.
Those are the names that jumped out at us, the dramatis personæ of Dewey’s dying days, and how much they were paid by the firm in 2011 and 2012. Feel free to let us know, in the comments, if we missed anyone.
For those of you who are really interested in how the Dewey dough was doled out, flip ahead to the next page for a spreadsheet listing all 109 partners with total 2011 and 2012 payments of $1 million or more….