A $50 million insurance policy is emerging as a key factor in efforts to resolve the bankruptcy of defunct law firm Dewey & LeBoeuf and avoid years of costly litigation, Reuters reported on Friday. The policy, taken out by Dewey in October 2011, covers claims of misconduct against former chairman Steven Davis and a handful of other former top executives at the firm, according to three former Dewey partners. As bankruptcy negotiations proceed, the estate, former partners and creditors are sorting out how the policy affects their different interests. In a proposal put forward last week by the firm's estate, former partners were asked to contribute between $25,000 and $3 million each toward a $103.6 settlement pot and to forfeit any legal claims against the defunct firm and its officers. In exchange, the partners would be released from liability for the firm's $315 million debt.
