Bankruptcy Judge Martin Glenn yesterday approved a $71.5 million settlement between former partners of Dewey & LeBoeuf and the estate of the law firm whose demise in May constituted the largest law-firm bankruptcy in U.S. history, Reuters reported yesterday. The settlement requires former Dewey partners to pay portions of their compensation, ranging between $5,000 and $3.5 million individually, in exchange for a release from potential lawsuits over the firm's debts. As of yesterday, roughly 400 of 670 former Dewey partners had opted for the settlement.
http://www.reuters.com/article/2012/10/09/us-bankruptcy-dewey-idUSL1E8L…
In related news, prosecutors in New York are investigating whether top managers at Dewey & LeBoeuf LLP purposely misled lenders about the law firm's financial health, as a criminal probe into the firm's failure intensifies, the Wall Street Journal reported today. Investigators also are looking into whether the law firm's leaders made false statements to former partners about Dewey's progress repaying loans on their behalf. The Manhattan district attorney has sent subpoenas in recent months to Dewey and at least one of its lenders seeking information relating to communications Dewey's leaders had with banks and former partners. A key issue in the probe of the largest law-firm failure in U.S. history is whether former Dewey chairman Steven Davis or other leaders of the firm intentionally made misstatements that violated state laws, such as those that prohibit the keeping of false business records. Read more. (subscription required.)
http://online.wsj.com/article/SB100008723963904432949045780448802669058…