July 23 (Reuters) - Since filing for Chapter 11 on May 28,
Dewey & LeBoeuf has paid the executive partner tasked with
overseeing the law firm's wind-down $190,000, according to a
filing made Friday in U.S. Bankruptcy Court in Manhattan.
It is unclear what the salary arrangement is for executive
partner Stephen Horvath, one of two partners remaining at Dewey
since it filed for Chapter 11, but the $190,000 covered work
performed between May 28 and the end of June. On an annualized
basis, that would total $1.97 million. In addition, Horvath was
reimbursed for $23,563 in expenses, according to the firm's
first monthly operating report.
Other payments to Dewey insiders include $56,000 to Janis
Meyer, the firm's general counsel, and $33,333 to Frank
Canellas, its director of finance.
Horvath did not respond to an email seeking comment. He
became executive partner in March during a pre-bankruptcy
management shake-up and, as part of that change, relocated from
London to New York.
A spokeswoman for Dewey's chief restructuring officer, Joff
Mitchell, declined comment; so did Edward Weisfelner, a lawyer
for the creditors' committee.
Dewey & LeBoeuf was one of the largest law firms in the
United States. It collapsed in May amid partner defections, a
heavy debt load and complaints about the guaranteed pay deals
some 100 of its 300 partners had in place.
The firm's bankruptcy team is now pushing to pay off Dewey's
creditors, who are owed between $245 million and $315 million,
according to bankruptcy filings. Since the bankruptcy, the Dewey
estate has collected a total $19.3 million, of which $5.7
million has been paid out in expenses, according to the monthly
Much of the restructuring work is focused on collecting fees
owed by Dewey's former clients. But the firm's accounts
receivable are aging, suggesting trouble ahead: Of the $205
million in accounts receivable, $112.6 million is more than 90
Adding to its challenges, Dewey has just 48 employees to
help wind up the firm, down from the 150 it had when it filed
for bankruptcy, according to a Monday filing.
"Every employee knows this is a liquidation case with a
limited employment opportunity for them," Dewey said in the
filing. "It is also known that is living month to month
on the use of cash collateral. [Dewey's] need to stem further
employee attrition is greater now than ever."
Separately, the monthly report disclosed in footnotes that
the firm's Frankfurt office on May 29 made an unauthorized
$76,466 disbursement to former partners there. It was unclear
who exactly received these payments.
A drop in the partners' capital account, from $73.1 million
to $60 million, is in part attributed to income during that
period minus the unauthorized German payment and changes in
foreign exchange rates.
The case is In re Dewey & LeBoeuf, U.S. Bankruptcy Court,
Southern District of New York, No. 12-12321.
For Dewey: Al Togut and Lara Sheikh of Togut Segal & Segal.
(Reporting by Nate Raymond)
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