This morning I attended the confirmation hearing for the Chapter 11 bankruptcy plan of Dewey & LeBoeuf. As I mentioned on Twitter a few minutes after leaving the hearing, Judge Martin Glenn confirmed the plan.
Under the plan, secured creditors will recover between 47 to 77 cents on the dollar, while unsecured creditors will wind up with 5 to 14 cents on the dollar. Secured creditors hold about $262 million in claims; total creditor claims, secured and unsecured, amount to about $550 million.
So that’s the bottom line. But what was the hearing itself like? Here are my observations, including a few photos — because bankruptcy court coverage is totally WWOP….
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….
* Dewey know how much Stephen Horvath has made since D&L went belly up at the end of May? Thus far, he’s raked in $190K, and that just covers his pay through the end of June. That’s only $1.97M a year, no big deal. [Thomson Reuters News & Insight]
* You might not be able to get a full-time job in this economy, but if you’re a contract attorney with foreign-language skills, you’ll probably be able to land some pretty sweet Biglaw firm gigs, even if you’re just doing doc review. [Wall Street Journal]
* Did the NCAA overstep its legal boundaries when sanctioning Penn State? At least one sports law professor thinks so, and he actually wishes that the school had challenged the scope of the sports organization’s authority. [CNN]
* Wait, female Senate aides in Minnesota can have affairs with their superiors and get away with it, while male aides get fired for doing the same exact thing? That’s blatant sexism, and you should totally sue. [ABC News]
* Rather than be “super boring,” this would-be Senator has dubbed herself “the diva of the district.” We know all about the Touro Law student who’s running for New York Senate. We’ll have more on this later. [POLITICO]
* Law school debtor Jason Bohn was arraigned on first-degree murder charges, and entered a not-guilty plea. According to his attorney, Bohn apparently suffers from “extreme emotional disturbance.” [New York Post]
* Know your rights? If you’re accused of hit-and-run and vehicular assault charges, it’s always a great idea to cry, repeatedly ask if you’re under arrest, and tell everyone that you’re a law student. [Spokesman-Review]
* Well, this is graphic: the trials and tribulations of a law student interning at a law firm and blogging about all of the hot lesbian action she’s getting, including encounters with a co-worker. [Daily Intel / New York Magazine]
In the words of Mark Zauderer, counsel to almost 60 former Dewey partners, “I’m not seeing overwhelming enthusiasm for the proposal.” A former D&L partner was even more blunt: “I think this is destined to fail. Let the trustee [of a Chapter 7 liquidation] go for it.”
But not everyone holds such negative views. One ex-partner — who claims that he’s being asked to pay more than he thought he owed, and that he’ll have to postpone his retirement by several years due to Dewey’s downfall — told Thomson Reuters that he will vote for the deal anyway. “My view is there’s nothing less desirable than having this drag out for years,” he said. “I’m willing to pay a lot of money to have this go away.”
Dewey have other issues besides how to deal with former partners? Most certainly. There are pressing problems regarding the disposition of client files, as well as issues regarding retirement benefits for former Dewey & LeBoeuf employees….
Debtor in possession -- of a sign? Dewey still seems to have signage outside 1301 Avenue of the Americas. (Photo taken on Tuesday by yours truly.)
Ever since the once high-flying Dewey & LeBeouf filed for bankruptcy in late May, observers have been wondering about what type of financial arrangement the firm might work out with its former partners. Last month, we discussed the outlines of a possible settlement between D&L and its ex-partners, in which former partners would pay a certain amount of money into the Dewey bankruptcy estate in exchange for being released from future claims by Dewey’s estate, the firm’s creditors, and fellow ex-partners.
Would such a plan fly? We noted that the broad outlines sounded reasonable enough, but that much would turn on the specific contours of the proposal — especially the amounts that the partners would be asked to pay, and the methodology for determining those sums.
In the wake of a meeting held yesterday afternoon here in New York at a hotel in midtown Manhattan, we now have some additional information on that front….
Clean-up efforts are underway at Dewey & LeBoeuf — and we’re not talking about the work of the janitors (at least not the ones who were allegedly stiffed on $300,000). Rather, we’re talking about the work being done by Dewey as debtor, aided by its high-priced advisory team, to put its affairs in order and to maximize the recovery for its creditors.
One of the biggest messes: how to deal with the firm’s hundreds of former partners. Dewey’s lead lawyer, Albert Togut of Togut Segal & Segal, has already made clear his plans to seek some funds from them.
In a conference call yesterday afternoon, Dewey’s bankruptcy advisers informed ex-partners about the contours of a possible global settlement….
Yesterday afternoon, Dewey’s lawyers appeared in U.S. Bankruptcy Court for the Southern District of New York. The firm’s lead lawyer, Albert Togut, introduced himself as follows: “I can finally confirm the worst-kept secret of the year. I am counsel for Dewey & LeBoeuf.” He’s going to be a very busy man over the weeks and months ahead.
Let’s find out what happened at the hearing, and also take a closer look at one of Dewey’s most intriguing unsecured creditors: a (rather attractive) litigatrix, a former Dewey associate now at another firm, who is owed more than $400,000 in “severance” by D&L….
This shouldn’t come as a surprise — we predicted it earlier this month — but the dying law firm of Dewey & LeBoeuf has filed for bankruptcy. We hope that you had a nice holiday weekend, because Dewey’s bankruptcy lawyers surely didn’t.
Under which chapter of the Bankruptcy Code is Dewey filing? Who is serving as bankruptcy counsel to the firm? What does Dewey’s balance sheet look like?
Watch to find out what some of our subscribers received in their May box!
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at email@example.com in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
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The last time I flapped my wings your way, I tried to make at least enough noise about your mobile phone to make you more than a little bit uncomfortable. I hope I did. If enough of us become anxious enough about the known and unknown unknowns and knowns in our mobile phones, then we can start making wise decisions about how to manage that information and its resultant investigations.
Today, I’d like to put a finer point on the last installment’s topic by asking a question that seemed to catch most attendees off-guard at a conference panel that I moderated last week: is there discoverable personal information in a mobile app? Our panelists’ answer was a uniform “yes” with one stating that, if he had to choose only one type of data that he could discover from a mobile phone, he’d choose app data. Why? Because there’s simply so much of it and because almost all of it is objective – not just user-created like an email – but machine-tracked like GPS, usage duration, log in and log out times, browsed web addresses, browsed actual addresses. Also, most of us seem to have the idea that data doesn’t actually “stick” to our mobile devices the way it “sticks” to our hard drives. Maybe there’s a disconnect based on the fact that our phones are mobile so we assume the data is mobile to?
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