A group of former Howrey LLP partners have agreed to pay more than $4.2 million to the defunct law firm’s bankruptcy estate through a settlement that Howrey’s trustee calls a crucial step toward constructing a plan to pay back creditors, the Wall Street Journal reported today. The proposed settlement, filed on Monday in bankruptcy court includes contributions of between $21,000 and $192,000 each from 60 of the firm’s former equity partners. Howrey trustee Allan Diamond sought to claw back money that the partners were paid when the firm was allegedly insolvent. Diamond said that he reached the deal after nearly two years of negotiations and will use the outlines of the settlement — which calls for partners to return 16 percent of what they earned between April 2010 and the firm’s dissolution a year later — to reach similar deals with the rest of the firm’s former partners. Diamond said that he will sue any of the 70 or so remaining partners who refuse to settle.
