Dewey asks judge for approval on clawback deal

September 5, 2012 Defunct law firm Dewey & LeBoeuf has asked a New York judge to approve a $70 million “clawback” settlement with former partners. The deal, if approved, would be the fastest ever resolution of claims against former partners for a failed law firm. Claims against former partners generally take years to resolve.

More than 400 ex-partners have signed on to the deal, under which they will pay back around 16% of the approximately $432 million in payments they received in 2011 and 2012.  Individual partners would pay between $5,000 to $3.5 million, depending on how much they earned and other calculations, including discounts for collection of unpaid client bills.

In exchange, former partners will get immunity from most future lawsuits relating to the firm’s demise. Some partners and the firms that hired them after leaving Dewey will face claims relating to unfinished legal business they brought over from Dewey.

When Dewey filed for bankruptcy it owed at least $315 million to lenders, bondholders and trade creditors, and now faces as much as $560 million in potential claims.

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