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Dewey Ex-Chairman Okays Settlement of Mismanagement Claims

Source: WSJ Blog - Jennifer Smith

Posted on 24 Apr 2013 by Neilson

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Dewey management liability claimsThe former leader of New York law firm Dewey & LeBoeuf LLP has agreed to pay about half a million dollars as part of a settlement over mismanagement and other claims related to the firm's collapse last year.

The proposed agreement between former Chairman Steven Davis, an insurance company that held the firm's management liability policy and the trustee liquidating the firm was filed late Monday in federal bankruptcy court in Manhattan, which still has to approve the deal. A hearing on the proposed deal is scheduled for May 13.

According to the filings, Mr. Davis, whom many blamed for the firm's demise, would pay $511,145. That sum is less than half of what some of Dewey's most prominent partners agreed to contribute under a separate $71.5 million "claw back" deal brokered last year.

The proposed agreement with Mr. Davis would release the insurance company that held Dewey's management liability policy from further claims covered by the policy. That firm, XL Specialty Insurance, would pay $19 million, according to court filings.

Mr. Davis denies any wrongdoing on his part in the time leading up to the firm's demise, according to the proposed settlement.

"Mr. Davis is pleased with the settlement, which is a practical resolution for all concerned," his lawyer, Kevin Van Wart of Kirkland & Ellis LLP, said in an email Tuesday morning.