Dewey ex-partners challenge bonus for former finance chief
Ex-partners from failed law firm Dewey & LeBoeuf are contesting a proposed $165,000 bonus for finance chief Frank Canellas.
The outrage behind the challenge is clear, with the attorneys asking, in court documents filed in Manhattan: “How, in bankruptcy, can [Dewey & LeBeouf], justify payment of such an excessive bonus to a member of its upper management when it has been widely pointed out that excessive compensation to the firm’s upper management significantly contributed to the firm’s collapse in the first place?”.
The ex-partners claim that the Bankruptcy Code requires Canellas to prove he has a “bona fide job offer from another business at the same or greater rate of compensation” to justify his bonus. If Canellas is forced to show such proof, it might be the first exercise of the requirement in a major case since it was enacted seven years ago. Until now, lawyers and judges have got around the bonus restrictions by proving that the company gave bonuses in the ‘ordinary course’, or by proving that the bonuses were keyed to performance of specific goals, such as selling off a defunct company’s assets.
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