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Dewey Files Bankruptcy Liquidation Plan
On Wednesday, Dewey & LeBoeuf sought approval of its liquidation plan by filing papers in U.S. Bankruptcy Court in Manhattan. The liquidation plan comes roughly six months after Dewey had filed for Chapter 11 bankruptcy protection. According to the filing, if the liquidation is approved, then secured creditors will have $261.9 million in allowed claims and about $100 million in claims would be treated as unsecured.
Dewey’s latest report, the better part of which is already about 90 days old, lists about $218.6 million in accounts receivable. In October, U.S. Bankruptcy Judge Marin Glenn had also approved a settlement between Dewey’s estate and about 400 former Dewey partners, which amounted to about $71.5 million being obtained in exchange of releasing parties to the agreement from further harassment.
In case the liquidation plan is approved, then secured lenders like JPMorgan Chase would receive about 80 percent of the first $67.5 million already received against the partners’ settlement. The secured lenders would also be the first to receive any payments recovered by the estate.
However, the liquidation plan has proposed that any future settlements with partners would benefit both secured and unsecured creditors in a 50-50 ratio. Now, that may be good news for some, as definitely a few major former partners had been left out of the settlement, but may not be so good news if the estate finds another way to have a go at former partners despite the settlement in existence.
Dewey is known to be pursuing about $60 million in ‘unfinished business claims’ upon legal business ex-partners carried with them to their new law firms.