Legal news outlets are reporting this week on details found within Dewey & LeBoeuf’s financial statement, filed last week in the firm’s Chapter 11 proceedings. The statement reveals that the firm’s CFO and executive director were paid more than $2 million in bonuses just months before the dissolution. The Lawyer explains:
Dewey & LeBoeuf paid special bonuses totalling $1.1m each to CFO Joel Sanders and executive director Steve DiCarmine in the months running up to the firm’s collapse, bankruptcy filings reveal…
The first bonus payment, dated 13 January, came two weeks before the firm’s climax conference call for global partners on 27 January, during which chairman Steve Davis told partners they needed to “own” the firm’s financial crisis.
The proximity of the bonus payout to Dewey’s failure has raised the ire of some – Above the Law’s David Lat calls it “nauseating” in a piece that includes the full payment schedules. The revelation may add fuel to the lawsuit brought against the firm by a group of former partners who contend they were deceived by firm management about Dewey’s finances. Thomson Reuters News & Insight reported on the lawsuit’s filing back in June:
Former partner Henry Bunsow claims Dewey managers lured him in 2011 with compensation promises they couldn’t possibly keep. The firm was already teetering under some $300 million of unpaid guarantees to other partners, he says, and its survival was “in serious doubt.” Profits per partner were under $1 million a year, half what he was allegedly told.
The now-defunct firm did receive some good news this week, however, when it won approval for retention and incentive bonuses for the employees who have remained to wind down business. Reuters reports Judge Martin Glenn approved the bonuses as reasonable over the objections of the U.S. Trustee.
Posted by Emily Fisher