Reuters: Bankruptcy News: UPDATE 1-U.S. Trustee objects to Dewey bonus plan

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UPDATE 1-U.S. Trustee objects to Dewey bonus plan Jul 19th 2012, 15:36 Thu Jul 19, 2012 11:36am EDT July 19 (Reuters) - Bankrupt law firm Dewey & LeBoeuf's plan to pay bonuses to its remaining employees has drawn objections from a U.S. bankruptcy monitor who said the plan might not be cost effective. U.S. Trustee Tracy Hope Davis, who represents the Justice Department in the bankruptcy case, said in court papers that the proposed plan did not provide enough information to determine if the cost of retaining employees was economically feasible. The law firm is seeking approval from the U.S. Bankruptcy Court in Manhattan to pay $450,000 to its 52 remaining employees who collect money and bill former clients. The trustee also said the plan could not be justified because the firm is no longer operating as a normal business. Togut, Segal & Segal LLP, the law firm representing Dewey, could not immediately be reached for comment. Davis, in court papers filed on Wednesday, also objected to the law firm's retention of Thierhoff Muller & Partner as its wind-down counsel and consultant for its German business. She argued that Dewey had not demonstrated that the terms and conditions of Thierhoff Muller's arrangement were reasonable. Last month, the trustee objected to the retention of law firms and public relations advisers that had filed applications to advise Dewey in its bankruptcy proceedings. Once one of the largest law firms in the United States, Dewey was hit by the loss of the vast majority of its roughly 300 partners to other firms amid concerns about compensation and a heavy debt load. The firm filed for Chapter 11 bankruptcy protection in May, listing $193.2 million in assets and $245.4 million in liabilities. The case is In re: Dewey & LeBoeuf LLP, U.S. Bankruptcy Court, Southern District of New York, No. 12-12321. Link this Share this Digg this Email Reprints

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