The Dewey & LeBoeuf circus went to London with confused signals about exactly what was going to happen with a deal to be presented by the firm’s bankruptcy chief attemting to sell London partners a $100 million settlement. However, doubt, skepticism and confusion reigned.
The Lawyer reports that the meeting, scheduled for July 13was to be snubbed by some former London partners of Dewey, involving senior figures in Dewey’s global wind-down team were expected to argue the case for partners to sign up to the settlement, which absolves partners of future liability if they give back a cut of their earnings.
However, there is currently confusion over whether today’s meeting will take place, with e-mails being circulated among partners this week attempting to establish the situation after a call was scheduled and later cancelled.
The muddle comes amid a sceptical reception towards the proposed deal from City partners, with some former partners telling The Lawyer they were unlikely to show much interest in the offer or felt it would be badly viewed in London.
The deal, details of which were first revealed earlier this week by The Lawyer, gives partners the option of paying a proportion of their 2011 and 2012 income from the firm to the estate in order to absolve them of future liability (11 July 2012).
Partners wishing to participate are required to give back between 10 per cent and 30 per cent of their total earnings for the two years, with the percentage depending on how high up the income scale they were. Those who took home more cash have been asked to give a larger proportion, with a minimum payback amount set at $25,000 (£16,000) and a maximum at $3m (£1.9m).
A former UK partner commented about today’s potential call: “It’s like me explaining to you why you should buy my car.”
Another non-UK partner said he had spoken to twelve global partners including two in London since the deal was announced on Wednesday (11 July), with all of them saying they would refuse to opt in.
The partner said: “People are saying, it’s better off with a Chapter 7 trustee than with this whole circus. It should have been like that from the start. They wasted millions and millions of dollars. I regret dialling in yesterday [Wednesday] and wasting two hours of my time [listening to the announcement on a conference call].”
It has emerged that former executive partner Steve Horvath is being paid $50,000 (£32,460) per week for his role in the wind-down, with bankruptcy counsel charging up to a reported $935 (£607) per hour and restructuring consultancy Zolfo Cooper up to $825 (£536).