A U.S. bankruptcy court judge in New York approved $17 million in fees and expenses Thursday for advisers working on Dewey & LeBoeuf's Chapter 11 case, but not before a few minutes were spent celebrating how swiftly the Dewey proceedings have moved along compared to the bankruptcies of other failed firms.
Dewey filed for bankruptcy May 28, 2011, and won approval of its Chapter 11 liquidation plan nine months later—a fact that lead Dewey bankruptcy lawyer Al Togut was quick to note Thursday. In addressing the court, Togut also highlighted the record amount of secured debt at issue in the case, approximately $230 million, versus the sums at stake in other law firm bankruptcies, and the quickness with which the firm filed for bankruptcy protection after disbanding as among the other challenges that made the pending fee applications worthy of approval.
U.S. Bankruptcy Judge Martin Glenn agreed, saying he wanted to commend Togut for overcoming "a lot of hard-fought issues in this case. Very well done."
All told, Glenn signed off on nine pending applications, including for law firms Togut, Segal & Segal ($8.8 million); Brown Rudnick, which advised the bankruptcy's unsecured creditors committee ($3.4 million); special benefits counsel Keightley & Ashner ($164,000); and Kasowitz, Benson, Torres & Friedman, which worked for an official committee of former Dewey partners ($1.35 million). Applications for German wind-down counsel Thierhoff Muller & Partner ($592,000), and Goldin Associates, which provided financial analysis ($1.3 million), were also among those approved.
Lawyers with the U.S. Department of Justice's trustee program—which monitors the bankruptcy process and recently proposed guidelines aimed at ensuring that attorneys fees in Chapter 11 cases are comparable to what firms charge in other practice areas—had previously trimmed less than $13,000 apiece off the applications submitted by Brown Rudnick, Keightley, and Togut, in part for time spent by the firms preparing and reviewing bills.
The bills Glenn signed off on encompass work conducted from the time of Dewey's bankruptcy filing through March 22.
As complimentary as he was of Togut's work in the case, Glenn took his own modest swipe at the bankruptcy lawyer's application Thursday by saying he was reducing the expense portion of the bill by $167.76: $74 for subway fare and the balance for meals either not sufficiently documented or exceeding the $20-per-person cap. (In January, Glenn chided Togut for seeking reimbursement for taxi rides within New York, telling him to "Take the subway. Take the bus. Better yet, have your firm pick up that cost.")
Togut ended the half-hour proceeding by telling the court how much interest the legal community, and not just bankruptcy professionals, seem to have given the Dewey bankruptcy.
"People admire, frankly, what was accomplished here," he said, adding that he hopes they've created a template that could be used in any future law firm collapses. "And that's a good thing for the legal profession."