Dewey tweaks partner settlement plan again

Dewey & LeBoeuf’s bankruptcy team has offered former partners further changes to the firm’s settlement plan, a week after telling them an amended deal was final.

Wind-down chiefs for the US firm have informed ex-partners that there have been uncontroversial modifications to the partner contribution plan that absolves partners of liability from the estate, with the deal now specifying that they cannot be pursued for money by the firm’s lenders and bondholders.

Ex-partners were e-mailed yesterday (14 August) informing them of the changes and yet another extension to the deadline for opting in, which has now been put back to tomorrow (16 August) after the original 24 July cut-off date was repeatedly postponed. The latest deadline had been yesterday.

Dewey reportedly drew down $75m of a $100m credit line from a banking consortium led by JPMorgan and including Bank of America, Citi Private Bank and HSBC. In 2010 it issued a $125m bond taken up by insurance companies.

Yesterday’s e-mail said the changes had been approved by the lenders, with the amendments coming alongside a creditors’ meeting in New York scheduled for today (15 August) (8 August 2012).

Confirmation of the changes follows a conference call last Thursday (9 August) during which chief restructuring officer Joff Mitchell of Zolfo Cooper told ex-partners it has offered them a final deal (9 August 2012).

The settlement has been the subject of numerous amendments following protests from partners who felt it disproportionately favoured certain top-level earners. The first major amendment saw former management figures asked to cough up more (27 July 2012). A later change added a mechanism that rewarded partners for bringing in unpaid fees and included discounts if the total pot of money raised hit certain thresholds.

Meanwhile, documents filed on Monday (13 August) at Companies House show that proposals published last month by Dewey’s UK administrators at BDO have been approved after no creditors of the UK LLP or the UK-based Dewey & LeBoeuf Services took up the option of calling a creditors’ meeting.

The UK LLP is set to be liquidated, with last month’s report showing there were not enough assets available to repay unsecured creditors’ dues, which totalled £4.2m for the UK LLP and £1m for the Services company (30 August 2012).

The UK LLP is a separate entity from the US LLP and covered the London and Paris offices.