A NY bankruptcy judge is refusing to dismiss suits made against several Dewey & LeBoeuf LLP partners who are seeking close to $16 million on the now-defunct law firm’s creditors. Under the NY state law, any finances the partners were paid for can be “clawed back.”
The decision comes a few years after the Dewey’s collapse after a huge chunk of former partners removed themselves from liabilities made against the firm. Months after Dewey claimed bankruptcy protection, over 470 ex-partners made an agreement to a $70.4 million settlement that created the Dewey’s re-payment plan. Other partners separately settled.
Judge Martin Glenn, an NY bankruptcy judge, found that under state’s debtor and creditor laws, partners aren’t allowed to argue the value of work they performed for the firm offsets the money they were paid for, a defense move sometimes utilized in clawback lawsuits.
The next move will be to determine when the defunct firm was unable to make its debt payments at the time it was due.