Dewey & LeBoeuf's liquidation trustee is suing for the return of $5.7 million that the firm paid to certain creditors shortly before filing for bankruptcy.

Alan Jacobs argues that Dewey gave the money to Bank of America, several law firms and additional vendors in the 90 days before its Chapter 11 bankruptcy filing, even though it was already insolvent. Bankruptcy code stipulates that no creditor is entitled to preferential payment in the 90 days before a debtor seeks bankruptcy protection.

Any money recovered would return to a pool going to creditors, so the companies could recover at least some of their cash, Am Law Daily reports.

Meanwhile, Allan Diamond, who Dewey enlisted to help recover assets in the bankruptcy, has begun sending demand letters to partners who did not join a February clawback settlement with the firm. Diamond told Am Law the partners will likely pay the trustee more money than they would have paid under the firm's plan.

For more InsideCounsel coverage of the Dewey bankruptcy, see: