July 20, 2012 / 2:29 AM / 5 years ago

Proposed Dewey settlement extended to August 7

3 Min Read

NEW YORK (Reuters) - The deadline for former partners of bankrupt law firm Dewey & LeBoeuf to reach a settlement has been extended until August 7, according to a former partner who received a copy of an email notice issued by Dewey's restructuring officer.

Dewey, once one of the largest law firms in the United States, is seeking to reclaim nearly $104 million from former partners in return for dropping potential claims against them related to the bankruptcy.

The deadline had been July 24.

"According to the note, they've had a ton of emails come in," said the former Dewey partner, who spoke on the condition of anonymity to preserve relationships with fellow partners.

"It's hard for people to make a decision without having a lot of these questions responded to."

The restructuring officer for the Dewey estate, Joff Mitchell, could not immediately be reached to comment on Thursday night.

Dewey & LeBoeuf collapsed in May amid a raft of partner defections and a high debt load. A firm that began the year with 1,040 lawyers in 26 offices ended with hundreds of employees laid off. Dewey owes creditors more than $315 million.

As part of the settlement, partners were asked to pay between $25,000 and $3 million, depending on how much they earned over the past two years.

But top earners have complained they were guaranteed a certain amount of money they weren't actually paid, and that wasn't factored into the settlement, while partners who did not have compensation guarantees complained of the $3 million cap on contributions from the top earners.

Most recently, a group of 53 LeBoeuf retirees issued a statement that the proposed plan was unfair since it sought to claw back pension benefits received in the past two years when they were no longer at the firm. The retirees said that the plan favored those at the firm who were responsible for its collapse.

As a result of strong pushback, a meeting has been tentatively set for July 26 in Manhattan for the estate's restructuring officer, Mitchell, to brief partners on a re-negotiated plan, according to the former Dewey partner.

The case is in re Dewey & LeBoeuf LLP, U.S. Bankruptcy Court, Southern District of New York, No. 12-12321.

Editing by Grant McCool, Noeleen Walder and Michael Urquhart

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