Regulators sue Dewey, Warsaw office transfers to Greenberg Traurig
So far this week, theres been good news and bad news for failing New York law firm Dewey & LeBoeuf. First the bad news: The Public Benefit Guaranty Corp., which oversees U.S. private-sector pension plans and interjects to cover plans when employers cannot pay promised benefits, sued Dewey on Monday.
May 16, 2012 at 07:59 AM
4 minute read
The original version of this story was published on Law.com
So far this week, there's been good news and bad news for failing New York law firm Dewey & LeBoeuf. First the bad news: The Pension Benefit Guaranty Corp. (PBGC), which oversees U.S. private-sector pension plans and interjects to cover plans when employers cannot pay promised benefits, sued Dewey on Monday.
PBGC spread word last week that it intended to take over three of the firm's pension plans, which it claims are underfunded by $80 million. The agency is worried that the sale of Dewey affiliates, which are partly responsible for funding the pensions, could make it more difficult for PBGC to recoup money to make up for the shortfall.
According to the Wall Street Journal, PBGC's play to take over Dewey's pensions, which cover 1,776 people, was partially prompted by a phone call with the firm last week, during which regulators learned that the firm plans to sell off two or three affiliates—likely to overseas offices—for an estimated $7.2 to $9.7 million. Those affiliates are not bound to Dewey's lenders, but are still legally responsible for funding the pensions, the lawsuit states.
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