Nine More Ex-Dewey Partners Hit With Clawback Suits

, The Am Law Daily

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Former RNC Chair Michael Steele. Photo By John Disney 1-25-2012
Former RNC Chair Michael Steele. Photo By John Disney 1-25-2012

Add nine more names to the list of former Dewey & LeBoeuf partners being sued by the defunct firm's liquidiation trust over compensation and other benefits they received in Dewey's last three and a half years of existence.

The most prominent of those targeted in the latest round of suits—from whom the Dewey estate seeks a total of $3.8 million—is former Republican National Committee chairman Michael Steele. In its suit against Steele, who also served as Maryland's lieutenant governor, the Dewey trust seeks $305,637 it says he collected in yearly installments from 2009 until Dewey's collapse in May 2012. Steele—a cofounder, along with fellow Beltway insider Lanny Davis, of Washington, D.C.–based lobbying, media and consulting firm Purple Nation Solutions—did not respond to a request for comment Monday.

The Dewey trust has so far sued 22 former firm partners as part of its effort to repay the failed firm's creditors and plans to sue 23 more, lawyers for the trust have said in court. All the ex-partners being targeted declined to join a $71 million settlement struck in 2012 between 400 of their former colleagues and the Dewey bankruptcy estate. Unlike that deal, which sought the return of a portion of the money received by the former Dewey partners in 2011 and 2012, the suits now being filed extend the clawback period to the beginning of 2009, potentially exposing the defendants to much greater liability.

By fixing on the earlier date, the liquidation trust has also dragged former partners who left the firm well before Dewey's now-infamous woes came to light into the firm's bankruptcy proceedings. Among those in that category: Chiu-Ti Jansen, whom the estate is suing for $58,200. Jansen left Dewey predecessor firm LeBoeuf, Lamb, Greene & MacRae in 2006, a year before it merged with Dewey Ballantine. After spending several years at Sidley Austin, she now publishes a Chinese-English lifestyle magazine, hosts fashion-related TV programs, and contributes to publications including the Financial Times' Chinese edition, according to her website. She could not immediately be reached for comment Monday.

For another former firm partner, Texas energy lawyer Steven Otillar, being named in the latest batch of clawback claims marks a second brush with Dewey-related litigation.

In May 2012, Otillar was on the receiving end of a suit filed by Citibank over what it claimed was his failure to repay $207,000 he had borrowed to cover his capital contribution to Dewey. In a countersuit filed a few months later, Otillar claimed Citi and Dewey had combined to actively defraud him and other lateral hires by failing to disclose the depths of the firm's financial problems. The two sides reached a confidential settlement last May, with Citi never explaining why it singled Otillar out among all of the former Dewey partners who owed the bank money.

In the clawback suit against Otillar on Friday, the Dewey estate seeks $468,844 in distributions and income tax advances it says the firm paid him in 2011 and 2012. Reached Monday, Otillar, now a partner at Akin Gump Strauss Hauer & Feld, declined to comment.

The other six former partners sued since late January (and the amounts being demanded of them by the Dewey estate), are: Christian Nugent ($894,403) and Ilan Nissan ($734,110), both of whom are now partners at Goodwin Procter; Terrence Mahoney ($312,948), who joined McDermott Will & Emery as senior counsel in June 2008, but no longer appears to work at the firm; David Greene ($79,000), most recently a partner at Robinson & Cole; Eric Cowan ($820,036), who joined Winston & Strawn from Dewey in 2009 and is now with Squire Sanders; and Ronald Zdrojeski ($139,344), a partner at Sutherland Asbill & Brennan. None of the six could be reached for comment Monday.

All of the suits are nearly identical to one another and mimic the first such action, which was filed in November against DLA Piper patner William Marcoux, to recover $4.2 million.

Allan Diamond, a partner with Diamond McCarthy in Texas who filed the clawback suits on behalf of the Dewey trust, did not respond to a request for comment Monday.

Meanwhile, another batch of lawyers working to maximize recoveries to Dewey creditors have filed their own round of actions against former clients over allegedly unpaid bills. In five such suits filed since the end of January, the Dewey estate seeks a total of $381,568.
 

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