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Former Dewey U.K. Partners Set to Snub $103.6M Firmwide Settlement PlanA number of former Dewey & LeBoeuf U.K. partners are set to reject the settlement plan put forward by the defunct firm's wind-down committee last week, which would see each partner asked to pay between $25,000 and $3 million into the bankrupt firm's estate, absolving them of any future liability in relation to the firm.
Legal Week2012-07-19 12:00:00 AM
A number of former Dewey & LeBoeuf U.K. partners are set to reject the settlement plan put forward by the defunct firm's wind-down committee last week.
The so-called "partner contribution plan" -- which is set to see partners asked to pay between $25,000 (£16,000) and $3 million (£1.9 million) into the bankrupt firm's estate to generate a total of $103.6 million (£66 million) -- would absolve former partners of any future liability in relation to the firm.
However, a group of former partners from the U.K. limited liability partnership led by former finance chief Bruce Johnston -- who teamed up earlier this month to instruct U.S. bankruptcy counsel -- have come to the conclusion that they will not participate in the settlement.
The reason for the move, according to two former partners, is that even without participating in such a deal, members of the U.K. LLP are ringfenced from any form of clawback under U.K. law.
Another reason cited is that the settlement is not as attractive as initially expected, as it would not absolve partners from litigation relating to business that they had taken with them to new firms.
One partner commented: "I am very concerned about the idea of being personally liable for any unfinished business we took with us to our current firm. There is a feeling that we will be able to negotiate a better deal if the bankruptcy is placed into the hands of a Chapter 7 trustee."
Former London partners understood to be among the group include former Dewey Ballantine London head Fred Gander, capital markets heavyweight Camille Abousleiman and high-profile insurance partner Joseph Ferraro, who are now at KPMG, Dechert, and Willkie Farr & Gallagher respectively.
However, the two sources also told Legal Week that some London partners -- notably those with lower levels of compensation -- would still take part in the settlement in an effort to completely absolve themselves of future liability in the bankruptcy.
Separately, several groups of former partners from Dewey's international network are also planning to turn down the opportunity to participate in the settlement plan, with two ex-partners confirming that Dubai and Italy partners were unlikely to take part.
Another former partner commented: "In the U.S., on the other hand, momentum is building towards participation. There are two large groups -- consisting of former LeBoeuf and former Dewey Ballantine partners respectively -- that are both looking likely to participate."