Biglaw

Dewey Settles Clawback Suit
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The aftermath of Dewey & LeBoeuf’s epic collapse, the largest law firm bankruptcy in U.S. history, continues to stir the waters. Three figures in particular, Dewey’s ex-chief financial officer, Joel Sanders, former executive director, Stephen DiCarmine, and former chairman Steven Davis face criminal charges on top of settling all issues with the creditors. One matter at least has been resolved: the $21.8 million clawback suit the firm’s bankruptcy trustee hoped to recover has been settled, though no details on the matter have been exposed to the public, according to wsj.com.

Not only have DiCarmine and Sanders said nothing on the matter, but the trustee, Alan Jacobs, also has as of yet made no comment to the media. According to the Wall Street Journal, U.S. Bankruptcy Judge Martin Glenn said simply “the court has been informed that the parties have settled the matter.”

  
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The clawback plan was an attempt typical in such firm disintegrations where creditors hope to gouge out some of the money they are owed; in this case, Jacobs claimed that the $21.8 million was improperly received as the firm “fell deeper and deeper into insolvency,” as wsj.com reported.

Meanwhile, DiCarmine and Sanders characterize themselves as “scapegoats” in the criminal proceedings, claiming vengeful partners are out to martyr them through the criminal action taken against them. The New York district attorney office’s request of July 9 that the bankruptcy court freeze until DiCarmine and Sanders are tried as criminals has not yet been ruled on by Glenn, according to wsj.com.

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