By Casey Sullivan
Feb 8 (Reuters) - A group of Dewey & LeBoeuf retirees who
previously claimed the defunct firm owned them $80 million has
agreed to return a portion of the retirement payments and
compensation they received before Dewey collapsed, according to
a settlement proposal filed in New York federal bankruptcy court
on Thursday night.
If the proposal is approved, the retirees will each pay the
Dewey estate either $5,000 or 25 percent of payments they
received from Dewey in 2011 and 2012, whichever amount is
smaller, in exchange for a release of claims and years of costly
The settlement also proposes that the retirees reimburse
Dewey at a rate of 60 percent for any tax advances made by Dewey
in 2011 and 2012, according to court papers.
It is unclear what the total payment to the Dewey estate
would be, but the settlement covers 125 Dewey retirees and
beneficiaries of retirees, according the application, which was
filed by Al Togut, a lawyer for the Dewey estate.
The retirees still need to sign onto the resolution. Joff
Mitchell, Dewey's chief restructuring officer, said more than
half have so far agreed to settle.
Until now, retirees had resisted a settlement with Dewey,
claiming the firm's estate should treat them as creditors, not
former partners, since Dewey owed them unpaid retirement
payments and compensation.
Why the retirees agreed to settle now was unclear. Annette
Jarvis and David Friedman, lawyers representing the retirees,
did not return a request for comment. Neither did Togut.
As part of the deal, the retirees agreed to allow Dewey to
take over their claims against fellow former colleagues,
including former Chairman Steven Davis, executive director
Stephen DiCarmine and chief financial officer Joel Sanders.
The settlement marks the second significant deal the Dewey
estate has reached with former firm partners.
In October, U.S. Bankrutpcy Martin Glenn approved a $71.5
million settlement between more than 400 former partners and the
firm's estate. The retirees had claimed that pact was unfair
because it favored the firm's high earners who they felt were
more responsible for the firm's collapse.
They also took issue with the fact that the deal was crafted
by consultants who advised the firm on business matters before
Dewey folded in May, and asked Judge Glenn to appoint an
independent examiner to investigate the deal's fairness.
The retiree settlement brings the Dewey Chapter 11
bankruptcy one step closer to completion. A hearing is scheduled
for Feb. 27 in New York federal bankruptcy court where a judge
is expected to rule whether the firm's bankruptcy plan.
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