Just when you thought Dewey & Leboeuf’s bankruptcy couldn’t get any more contentious, the U.S. bankruptcy trustee in charge of the case objected Thursday to a plan that would reward the estate’s director of finance, Frank Canellas, with a $165,000 bonus.

Joff Mitchell, the firm’s chief restructuring officer, had proposed paying bonuses to Canellas and two other employees to keep them from leaving the firm. But U.S. Bankruptcy Trustee Tracy Hope Davis objected to Canellas’ bonus, which was significantly larger than the other two, arguing that he was an “insider” in Dewey’s former management team. According to Davis, under bankruptcy code insiders cannot receive bonuses unless they have a “bona fide job offer from another business at the same or greater rate of compensation.” She also noted that, with the bonus, Canellas stands to earn $665,000 in 2012, more than the $615,000 he made when the firm was still operational in 2011.

The firm’s Chapter 11 bankruptcy proceedings have already seen one dust-up over bonuses. In July, a federal judge approved the firm’s request to pay $700,000 in bonuses and retention pay to its remaining employees. Davis also objected to that plan, on the grounds that Dewey is no longer operating as a normal business, but Judge Martin Glenn disagreed, ruling that “the cost of the retention plan [was] reasonable in light of the possible consequences [Dewey] would face if it were unable to stop more employees from leaving.”

Read more at the Wall Street Journal and Thomson Reuters.

See below for more InsideCounsel stories about Dewey’s demise:

Former Dewey partners attack proposed clawback settlement in court

Citibank denies charges that it concealed Dewey’s financial troubles from partners

Former Dewey partner accuses Citibank of concealing firm’s financial troubles

Dewey asks court to approve $70 million clawback settlement

Analyzing Dewey’s latest operating report

Infographic: The timeline of Dewey’s downfall

Bankruptcy judge OKs most of Dewey’s $700,000 bonus plan

Former Dewey partner sues management, claims they were “running a Ponzi scheme”