Former Dewey partners receive latest amendments to settlement plan
Dewey & LeBoeuf's wind-down team has offered to spare the defunct firm's ex partners from all potential litigation from secured lenders as an incentive to participate in the proposed partner clawback settlement. The latest revisions to the so-called 'partner contribution plan' were posted to a secure web link overnight, with lead bankruptcy lawyer Al Togut and chief restructuring officer Joff Mitchell also confirming that the deadline for signing up to the agreement had been postponed again.
August 15, 2012 at 10:15 AM
3 minute read
Dewey & LeBoeuf's wind-down team has offered to spare the defunct firm's ex partners from all potential litigation from secured lenders as an incentive to participate in the proposed partner clawback settlement.
The latest revisions to the so-called 'partner contribution plan' were posted to a secure web link overnight, with lead bankruptcy lawyer Al Togut and chief restructuring officer Joff Mitchell also confirming that the deadline for signing up to the agreement had been postponed again.
Partners now have until tomorrow (16 August) to ratify the agreement, with the bankruptcy team justifying the delays in an email to former partner yesterday.
The email states: "The reason for the delay in posting this is simple – lawyers for partners, the lenders and the Official Committee of Unsecured Creditors participated in drafting changes that we deemed important and there were a lot of people involved in this process which made it time-consuming."
The main change is a waiver given to former partners by the secured lenders – which include JP Morgan, Bank of America Merrill Lynch and Citibank, as well as a number of insurance companies – meaning they will not be able to pursue legal claims against them if they sign up to the partnership contribution plan.
The defunct law firm drew down $75m (£47.8m) of a $100m (£63.8m) credit line from a banking consortium led by JPMorgan earlier this year, as well as issuing a $125m (£79.7m) bond in 2010 taken up by insurance companies.
One partner commented: "The only ones to benefit practically from this release are, in my view, the members of the executive committee or the office of the chair as they could be personally potentially sued by the note holders and the secured lenders for not having disclosed the true state of the finances of the Firm and for claims of having misled them into financing the firm."
He added: "I don't see how the other partners would benefit from such a release as there is no link between us as limited partners in the partnership and the lenders."
Separately, documents filed this week on Companies House show that proposals issued last month (20 July) by Dewey's UK administrators BDO have been approved after no creditors of the UK LLP or its holding company took up the option of calling a creditors' meeting.
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