NEW YORK, Aug 14 (Reuters) - In a sign the settlement talks
for bankrupt law firm Dewey & LeBoeuf are nearing a close, the
firm's estate on Tuesday extended a deadline by just three days
for former partners to sign a final agreement.
The new deal reflects minor revisions to the settlement,
including a release from claims by Dewey's lenders such as
JPMorgan Chase, according to an email sent to partners and
obtained by Reuters. The amount of $90.4 million the estate is
asking partners to contribute to the settlement is unchanged.
Partners who opt out of the settlement could be sued for
misleading lenders about Dewey's financial condition before its
collapse, said one lawyer representing a group of former Dewey
Those who want to accept the deal now have until 5 p.m.
Thursday, Aug. 16, instead of Aug. 13, according to the email.
The email stated that Dewey's official committee of
unsecured creditors, who have approached the deal with
skepticism, participated in drafting changes. A lawyer for the
committee, Edward Weisfelner of Brown Rudnick, did not respond
to requests for comment Tuesday.
Two former Dewey partners, one who was a top earner and
the other midlevel, said they were not worried about potential
claims by lenders and that they would likely sign the
The email did not go into detail about other changes
stemming from negotiations, although it mentioned they existed.
The email also didn't specify the number of former partners who
had already signed previous versions. It noted that the latest
draft of the settlement, also issued to partners Tuesday, would
be the final one and that partners who already signed would have
to sign again.
Joff Mitchell, Dewey's chief restructuring officer and a
senior managing director of Zolfo Cooper, declined comment
through a spokeswoman.
Michael Reilly of Bingham McCutchen, who represents
bondholders in the bankruptcy, declined to comment. Kenneth
Eckstein of Kramer Levin Naftalis & Frankel, who represents
Dewey secured lenders including JPMorgan, did not respond to
requests for comment.
The settlement extension was offered to give former Dewey
partners time to look over the new draft. If successful, the
settlement would provide the first major recovery for creditors
since the law firm filed for bankruptcy in May. In total, the
creditors are seeking to recover up to $315 million, according
to court records.
A number of former partners have expressed dissatisfaction
with the settlement talks to date. Last week, a group of 54
retired partners and spouses of deceased partners asked U.S.
Bankruptcy Judge Martin Glenn to appoint an independent trustee
or examiner. They questioned the legal basis for the estate's
demand for them to fund the bankruptcy of a firm where they
hadn't worked during its downfall.
(Reporting by Casey Sullivan and Nate Raymond)
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