Cross border insolvencies and financial restructurings are remarkably opaque considering we live in the Information Age. The mission of the Centre of Main Interest (the COMI) is to light some candles in the darkness and create a forum for further discussion. The Law Offices of Tally M. Wiener, Esq. are pleased to publish the COMI blog.
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Thursday, November 1, 2012
Dewey Estate Moves to Shed Dozens of Creditors' Claims
Per The Am Law Daily:
October 31, 2012 By Sara Randazzo
The Dewey & LeBoeuf estate has begun to try to whittle away some of the thousands of claims asserted by aggrieved creditors hoping to recover at least a portion of what they say Dewey owes them.
To date, more than 2,100 proofs of claim have been filed against Dewey, which became the largest law firm in U.S. history to fail when it filed for Chapter 11 bankruptcy protection on May 28. Those submitting the claims—which range from a low of $10 up to several million dollars—include vendors, former firm staffers, and landlords. Dewey’s advisers have said they believe that all told, the estate owes creditors $260 million in secured debt and $300 million $500 million more in unsecured claims.
In a pair of filings made October 26, the Dewey estate seeks to invalidate several dozen claims that they say are duplicative or were submitted after the September 7 deadline. Among the sums the defunct firm hopes to shed: $30.15 million in claims the estate says were filed twice by the same party; $2.39 million in claims that were subsequently amended; and a total of $237,000 in priority, unsecured, and secured claims filed after September 7. About $136,000 of that amount is attributed to Bradford Badke, a New York–based Ropes & Gray partner who was once with Dewey predecessor firm Dewey Ballantine.
The estate's October 26 filings do not mention the former partners' claims among those it hopes to strike, and Dewey attorney Scott Ratner did not immediately respond to a request for comment Wednesday on whether the estate will ultimately object to them as well.
The official committee of retired partners, made up primarily of retirees affiliated with predecessor firm LeBoeuf, Lamb, Greene & MacRae concerned about how the bankruptcy will affect their pensions, was formed by the U.S. Trustee’s office within a week of Dewey’s bankruptcy filing.
The Dewey estate moved to disband the committee—which contended that the settlement plan benefits former partners close to the firm’s bankruptcy advisers and hurts retirees and others who bear no responsibility for Dewey’s demise—on October 10, a day after Glenn approved that plan.
Lead Dewey bankruptcy lawyer Albert Togut has argued in court filings that the official committee "has not contributed in a productive way to this bankruptcy case.” Instead, he asserts, the group "has consistently taken positions that are detrimental to the orderly administration of this case and contrary to the efforts of the Debtor’s bona fide stakeholders (i.e., the Secured Lenders and general unsecured creditors)."
JPMorgan Chase, Dewey’s primary secured creditor, and the official committee of unsecured creditors have both also come out in favor of disbanding the group.
The official committee of former partners, whose members include David Bicks and Cameron MacRae III, has strongly objected in court filings to the attempt to make them go away. The group’s attorneys at Kasowitz Benson Torres & Friedman argue that the committe's existence is being threatened “as retribution for the ‘sins’ of zealously representing the interests of its constituents and calling for a more meaningful investigation of, and recovery upon, estate claims against former insiders.”
Saying the estate has no legal right to make such a move, U.S. Trustee Tracy Hope Davis also opposes the effort to disband the committee.
Glenn is scheduled to hear arguments on both sides of the issue at a hearing set for Thursday, though U.S. bankruptcy court in downtown Manhattan remained closed as of Wednesday afternoon in the wake of Hurricane Sandy.