Today at 5 p.m. is the deadline for former partners of the bankrupt Dewey & LeBoeuf law firm to sign up for the “Partner Contribution Plan.” Under the terms of the Plan, which in its latest iteration seeks $90.4 million in “clawbacks” from ex-partners, participating partners would contribute specified amounts to the Dewey bankruptcy estate in exchange for releases from future liability (to the Dewey estate, to other participating partners, and to Dewey lenders, thanks to recent revisions to the PCP).
When talk of the Plan first surfaced, I opined that “[s]uch a deal sounds reasonable in principle.” I later observed that even if the PCP might not be perfect, “[i]f you’re a productive partner, happily ensconced at a new and stable firm, and just want to forget the D&L debacle and return to serving your clients, this deal may Dewey the trick.”
But now, after numerous revisions to the Plan, seemingly endless extensions of the deadline to join, and a still-insufficient amount of participation, I’m beginning to think that maybe it just won’t fly — and Dewey should just be allowed to die, i.e., slip into a straight-up liquidation. Perhaps Dewey’s bankruptcy advisers should stop trying to flog a product that nobody seems interested in buying.
UPDATE (4:35 PM): It looks like the Dewey estate’s perseverance has paid off. The $50 million participation threshold has been reached.
Here’s one good thing about the Partner Contribution Plan: thanks to the PCP, we now have detailed information about how much each of Dewey’s partners received from the firm in 2011 and 2012. And yes, we’re willing to share the data for the top earners with you, in spreadsheet form.
Some people are big believers in the virtues of black-box compensation. But here at Above the Law, we’re all about transparency….