Bankruptcy, Biglaw, Dewey & LeBoeuf, Dissolution, Money, Nauseating Things

Dewey Know How Much Firm Managers Received as LeBoeuf Was Being Cooked?

Yesterday brought some good news for Biglaw’s favorite debtor in possession, Dewey & LeBoeuf. The firm, currently in Chapter 11 bankruptcy, received an additional two weeks of bankruptcy funding.

That’s the nice news. Now, the nauseating: namely, how much Dewey’s executive director and chief financial officer were paid, as the firm swirled down the drain earlier this year….

Last week, Dewey filed a statement of financial affairs with Judge Martin Glenn. Schedules to the filing showed who got how much, and when, during Dewey’s dying days.

The information enraged some of our readers. One tipster told us:

The schedules show, starting at about page 199, millions of dollars in profit distributions paid out to select partners in 2012, when the firm was indisputably insolvent and unprofitable, and millions paid to the executive director and CFO, after they were supposedly fired. [Bankruptcy lawyer Albert] Togut was already on the scene when some of these payments were made. (Said Al in a different context: “there has been close oversight here by the secured creditors.”)

This is where the real story is, buried in plain sight.

Well, technically it’s not clear that Stephen DiCarmine, the executive director, and Joel Sanders, the chief financial officer, received money “after they were supposedly fired.” The schedules show that final payments were made to both men on May 15, 2012. According to a May 4 Reuters story, DiCarmine was dismissed on or about the 4th but was “given about two weeks to leave the firm.” Receiving a paycheck on May 15 is consistent with that timeline.

A second source sent us the schedules for DiCarmine and Sanders, reprinted on the next page for the curious among you, and highlighted this information:

Can you believe what Dewey was paying Steve DiCarmine? He got a $500,000 bonus (?) in January and a $600,000 bonus (?) in February of this year! This was at a time when some partners were only getting their $25,000 a month draw.

Who has the authority to approve these things?

Indeed. It’s pretty amazing stuff. Between May 31, 2011, and May 15, 2012, Stephen DiCarmine and Joel Sanders received more than $2.9 million each in salary, bonuses, and expense reimbursement.

If you’re interested, flip ahead to the next page to read the full schedules. And weep.

(hidden for your protection)

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