There is more news about the failed law firm of Dewey & LeBoeuf LLP. This time, it involves an extension for former partners from Dewey & LeBoeuf LLP have been granted an extra 48 hours to determine if they would like to join a $90.4 million ‘clawback’ settlement. If they join the settlement then it would release the former partners from any future liability. They would have to return segments of payments they received in 2011 and 2012 though. The original deadline to decide was Tuesday at 5 p.m. If the partners agree to the deal then the firm would be able to repay millions to creditors, according to the Wall Street Journal.
An email was sent to former partners about the Partner Contribution Plan. It reads:
Subject: Deadline Extended – August 16, 2012 at 5 pm NY time
In a few hours, we will post the revised PCP agreement for your review and signature. 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. Just as one example, this final version of the PCP contains a provision for PCP participants to receive releases from the lenders which was not in any of the prior versions.
We are now done and this is the final agreement. We will not make any further revisions.
There is no word yet as to how many former partners want to agree to the settlement, which has a minimum threshold of $50 million. Another email was sent to former partners on Tuesday thanking those who have already signed up for the settlement. That email reads:
Thank you to those of you who have already signed and returned the earlier version. If you have done so, there will be instructions for signing the new agreement. And thank you to everyone for your patience.
The attorney representing the unsecured creditors of Dewey, Ed Weisfelner, is from Brown Rudnick LLP. He said that his clients are prepared to “reluctantly support the program” since an agreement has been reached.
“The partner contribution program, as its ultimately morphed itself, with the conditions and releases, represents in my view a very, very good deal for the former partners,” Weisfelner said. “We feel it’s the way to go unless we want to follow the mold of many unfortunate law firm dissolutions. Nobody is going to walk out of this thing happy.”