Dewey Trustee Objects to Multiple Advisers over Possible Conflicts of Interest

On Friday, Hope Davis, the U.S. Trustee in the Chapter 11 case of Dewey & LeBoeuf objected to the retention of multiple law firms and public relations advisers for essentially the same functions. Davis, who represents the U.S. Justice Department in the matter objected to the simultaneous applications of Proskauer Rose LLP and Keightley & Ashner LLP saying the case didn’t “warrant the need for two law firms to perform what appear to be the same services.”

The objection filed by the trustee mentioned that Dewey was seeking the advice of both firms on claims brought by the U.S. Pension Benefit Guaranty Corporation. The trustee also desired to know whether Proskauer has any conflicts of interest in representing Dewey. The objection raised the possibility of the existence of a conflict of interest with Proskauer advising Dewey on one hand, and also representing former Dewey partners on the other. The question was also raised whether the more than 60 former Dewey employees now working at Proskauer could participate in an employment class action pending against Dewey.

The U.S. Trustee also objected to the hiring of PR consultants Sitrick and Company and submitted that Dewey is in the process of liquidation and the firm had “failed to demonstrate the necessity of hiring a public relations firm in a liquidation case.”

Several of the firms have already begun working for Dewey and are seeking retroactive approval of the bankruptcy court for their appointments. The Manhattan bankruptcy court is yet to provide any decision on the matter leaving the approval of the law firms pending.

Neither the law firms, nor the PR firm whose appointment was objected to by the U.S. Trustee, provided their comments to the media.

Dewey & LeBoeuf filed for Chapter 11 bankruptcy in May, listing $245.4 million in liabilities against $193.2 million in assets.