On Wednesday, Dewey & LeBoeuf officially agreed to allow the U.S. Pension Benefit Guaranty Corporation to step in as trustee, thus terminating its employee pensions. U.S. District Judge Jesse Furman signed the consent order terminating all three employee pension funds which covered 1,800 former Dewey employees. The order made PBGC the trustee of the pension funds, thus providing the agency the power to pursue claims for the $80 million by which the funds had been underfunded by Dewey.
Wednesday’s consent order makes PBGC the largest unsecured creditor of Dewey. The agency would now assume responsibilities for paying benefits to the retirees of Dewey. The order made PBGC assume liabilities associated with the funds including the lack of $80 million that should have been deposited by Dewey. PBGC would be pursuing its claims in the bankruptcy proceedings. According to the Chapter 11 proceedings filed by Dewey, the law firm listed $193.2 million in assets and $245.4 million in liabilities. PBGC said that it moved to seize the plans to secure its ability “to collect against the firm’s affiliates that share funding responsibility for the pension plans.” Such affiliates also include overseas offices that Dewey sold to other firms.
Records of the U.S. Bankruptcy Court in Manhattan showed that the PBGC had received $2 million from the May 11 sale of Dewey’s Warsaw office and another $1.5 million from the sale of Dewey’s offices in Russia and Kazakhstan.
At least former employees of Dewey are now more certain of the future of their retirement benefits.
The case is Pension Benefit Guaranty Corporation v. Dewey & LeBoeuf LLP, U.S. District Court of the Southern District of New York, No 12-cv-03833