Judge Seeks Details on Dewey Plan for Performance Bonuses
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On Wednesday, Judge Martin Glenn demanded further detail on a plan by Dewey & LeBoeuf to pay out as much as $450,000 in performance-based bonuses to employees who stayed over to help wind down the firm’s operations. The judge said he wanted a list of the employees’ salaries and the amount of bonus money to which they would be entitled to under the plan.

While saying that he was inclined to approve most of the plan pending the salary list, the judge said “I need something to put it in context for me.” He said bonuses for bankrupt companies was a ‘hot-button’ issue, even though these were employees who knew that they were helping to end their jobs.

The U.S. Trustee for the Dewey bankruptcy, Tracy Hope Davis had objected to the plan, which includes human resources, finance and IT personnel and billing, and collection staff who agreed to stay on and help to wind down the law firm. However, Davis said that Dewey had been unable to show that it could afford the plan for bonuses.


Court papers showed that Dewey claimed the employees were “integral” to collecting accounts receivable and getting the books and records of the firms in order. The plan had initially covered 52 employees without including the former Dewey partners who are currently serving as senior management for the firm during the winding down. However, even since the floating of the plan for bonuses, four people have already left Dewey.

Dewey lawyer Al Togut said, “There’s no future in working for Dewey & LeBoeuf – none, … There’s every reason for these people to leave. The only reason for them to stay is this application.”

Davis’s objection was mainly about Dewey’s plan to pay $230,000 in additional, discretionary bonuses, though that issue did not come up in the latest hearing. The law firm argued that the bonuses for three particular people fell under the so-called “ordinary course” of business, but Davis argued that Dewey had no “ordinary” course of business left, being already under liquidation.

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