Dewey & LeBoeuf is still on track to receive final confirmation of its bankruptcy plan by the end of February after the judge overseeing the firm’s Chapter 11 case approved two key documents on Jan. 7. The so-called disclosure statement and Chapter 11 plan, totaling about 150 pages, lay out how the Dewey estate intends to maximize its remaining assets and how much creditors owed some $600 million can expect to be paid. Recoveries to unsecured creditors are expected to be minimal, according to court hearings.
Southern District Bankruptcy Court Judge Martin Glenn expressed serious reservations at a hearing last week about several of the two documents’ provisions, including those detailing how much liability former firm partners would have with regard to Dewey-related claims if they had signed on to a partner contribution plan that asks them to contribute between $5,000 and $3.37 million apiece in exchange for assurance the estate will not sue them in the future. The revised plan now says that claims not belonging to the estate can still be brought, but emphasizes that former partners can only be found liable for their proportionate share of any such claims.
