BDO ADMINISTRATORS to international law firm Dewey & LeBoeuf have received a £36.7m claim from the collapsed firm’s US arm.
Mark Shaw and Shay Bannon, restructuring partners at BDO, were appointed joint administrators to the UK operation of the international firm, which also includes the Paris office, in May last year.
A six-month progress report by the administrators shows that unsecured creditors have filed claims for approximately £40.8m, of which £36.7m relates to a claim by the US entity, Accountancy Age‘s sister publication Legal Week reports.
The report says the claim is “in respect of an intercompany position that arose prior to administration”.
The administrators said the £40.8m figure – which comprises all claims passed to them between 28 May and 27 November last year – compared with a purchase ledger in the UK LLP’s books and records totalling just £1.1m.
A $71.5m (£45m) settlement between Dewey’s former partners and the defunct firm’s estate was approved by the bankruptcy judge overseeing the case in October last year, less than five months after the US firm’s high-profile collapse.
Meanwhile, a September filing in the administration of the US operation shows BDO submitted a $20.4m (£12.7m) claim to Dewey US for “intercompany debt”.
The claim states the figure represents intercompany balances due, reflected in the UK books, but does not specifically state to what the sum relates.
BDO’s most recent report also notes that all UK employees, with the exception of the finance director, were made redundant on 31 August last year, with Dewey’s offices entirely vacated by administrators and staff by the end of September.
Until the end of November, secured creditors had received £1.5m from realisations in the UK, though the administrators noted that secured creditors “will likely suffer a significant shortfall in respect of their indebtedness”, notwithstanding any distributions from the US through its Chapter 11 process.
BDO has so far accrued £484,846 in fees for the administration, including £482,223 in time costs, represented by 1,177 hours at an average charge of £409.72 an hour.
The news comes after it emerged in December that US subsidiaries of UK insurance giant Aviva have filed a lawsuit against the three former leaders of Dewey relating to the firm’s $125m (£77.1m) bond offering in 2010.
The claim was filed against former Dewey chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders. Aviva, which bought $35m (£21.6m) in senior secured notes from Dewey in 2010, alleges that Dewey’s leadership team failed to sufficiently inform the company about the firm’s financial health at the time of the acquisition, leading to a loss when it subsequently sold them earlier this year.
Three new partners and seven business restructuring advisers have been appointed to the new Preston office
Political and economic uncertainty behind the fall in confidence
Just Racing Services, operating company of the Manor Racing Formula One team has entered administration
Last year 16 oil and gas companies became insolvent, finds Top Ten firm Moore Stephens