Dewey & LeBoeuf to pay up to US$700,000 to encourage employees to stay, help with wind-down
(Reuters) — Law firm Dewey & LeBoeuf in New York largely won approval of a plan to pay up to US$700,000 in retention and incentive bonuses in an effort to encourage a dwindling number of employees to stay at the defunct law firm.
U.S. Trustee Tracy Hope Davis had objected to the plan, saying the firm hadn't shown the plan was "economically feasible" or justified. But U.S Bankruptcy Judge Martin Glenn said the costs were reasonable given what would happen if its remaining employees, who number fewer than 50, left.
"The [U.S. Trustee] may not substitute its business judgment for that of the Debtor's," Glenn wrote.
A spokeswoman for Dewey's chief restructuring officer declined comment. A representative for Davis did not respond to an e-mail seeking comment.
Dewey has been winding down since filing for bankruptcy in May. Once a firm of 1,400 lawyers globally, today it has just a handful of employees left, who are helping Dewey collect bills and dispose of hundreds of thousands of client files.
Employees have been leaving at a rapid pace, and Dewey has acknowledged there are no prospects for long-term employment at the firm. Dewey's head count had dropped to 52 when it pitched the bonus plan earlier in July, and it has lost at least four more people since.
Glenn said Dewey's ability to collect receivables and wrap up business "will be a much less achievable goal if is unable to stem the tide of employee departures."
Under Dewey's retention plan employees will be eligible for extra pay if they stay with the firm past certain dates. A related incentive plan for three collections employees will provide similar perks.
Glenn did reject one aspect of Dewey's retention plan, which would have provided up to US$100,000 in discretionary funds to pay employees. Glenn said Dewey could make the pitch again after providing specific guidelines for how it would distribute those extra funds.
