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November 26, 2012


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Doug Richmond

Partner buyouts are no model because the "buyouts" are mostly, if not exclusively, a return of the partners' capital.


Is bankruptcy reorganization a possible model for law schools unable to pay creditors?

Taja-Nia Henderson

Bobby Dexter of Chapman Law (bio at published an article in the Pitt. L. Rev. on the taxation perils of tenure “buyouts,” and whether such payments should be categorized as wages (or other income) for payroll tax purposes. The article describes a circuit split over whether a buyout represents payment for services already rendered (like a wage) or consideration for an agreement to relinquish one’s position in the academy. Thanks, Bobby, for the hat tip on this interesting angle! Article link at


The only people I've known to take buyouts were at or near retirement age. These are folks who would have retired in a few years anyway and it is unclear that the school saved very much money at all by paying them, say 1.5-2x their current salary to leave. Unclear because most of the people I know who've taken buyouts would have left in 1-3 years anyway.

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