Dewey: Pensions, Patton Boggs and a Six-Week Pax Romana

By Jennifer Smith

As the defunct law firm Dewey & LeBoeuf LLP makes its way through Chapter 11, it seems it’s all over but the shouting.

Sure, that shouting is expected to go on for some time. There will be haggling over how much money ex-partners and the firms they join will have to cough up to satisfy creditors. And a rash of lawsuits assigning blame is expected, such as the one filed this week by disgruntled former Dewey partner Henry Bunsow, who accused firm leaders of running a “Ponzi scheme” and absconding with his $1.8 million capital stake.

Speaking of firm leaders, three of those accused in Bunsow’s suit—former chairman Steven Davis, former executive director Stephen DiCarmine and, as of Thursday, former chief financial officer Joel Sanders—have retained the same bankruptcy lawyers from Hughes Hubbard & Reed LLP, presumably in hopes of recovering money they were promised in their contracts. Their lawyers did not immediately respond to a request for comment.

But now that the firm is headed for liquidation, things are proceeding pretty much as legal experts and bankruptcy wonks had predicted.

On Wednesday, federal pension regulators officially took over Dewey’s three pension plans, which the Public Benefit Guaranty Corporation had said were underfunded by $80 million. PBGC, whose claim put them at the top of the list of Dewey’s unsecured creditors, will now pursue the money in bankruptcy court while also assuming responsibility for payments to the 1,788 plan participants.

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