June 30, 2012 / 3:43 AM / 6 years ago

Trustee objects to advisers in Dewey bankruptcy

(Reuters) - The U.S. Trustee in the bankruptcy case of Dewey & LeBoeuf objected on Friday to the retention of law firms and public relations advisers that had filed applications to advise the defunct law firm in its bankruptcy proceedings.

Hope Davis, who represents the U.S. Justice Department in the bankruptcy, objected to the applications of law firms Proskauer Rose LLP and Keightley & Ashner LLP, arguing that the case does not “warrant the need for two law firms to perform what appear to be the same services.”

Dewey, the trustee’s filing said, sought to employ both firms to advise on claims brought by the firm’s largest unsecured creditor, the U.S. Pension Benefit Guaranty Corporation.

The U.S. Trustee also questioned whether Proskauer has conflicts in representing Dewey. She requested Proskauer provide additional information on whether its representation of former Dewey partners might conflict with its representation of the defunct firm, as well as whether any of the more than 60 former Dewey employees now working at Proskauer would be eligible to participate in an employment class action pending against Dewey.

Proskauer did not immediately respond to a request for comment.

Albert Togot of Togut, Segal & Segal is serving as Dewey’s primary bankruptcy counsel. Togut did not immediately respond to a request for comment.

Davis also objected to the hiring of public relations consultants Sitrick and Company, arguing that Dewey is in the process of winding down and that it had “failed to demonstrate the necessity of hiring a public relations firm in a liquidation case.”

Sitrick declined to comment on the objections.

Several of the firms, including Proskauer and Sitrick, to which Davis objects have already started working for Dewey, and are seeking retroactive approval. The judge assigned to the case in the Manhattan bankruptcy court will decide whether they can carry on working.

Once one of the largest law firms in the United States, Dewey & LeBoeuf filed for Chapter 11 bankruptcy at the end of May. The firm listed $193.2 million in assets against $245.4 million in liabilities.

Reporting By Erin Geiger Smith in New York; Editing by Daniel Magnowski

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