Skip to comments.Dewey files for Chapter 11 - biggest US law firm collapses
Posted on 05/29/2012 4:38:59 AM PDT by sunmars
The crippled law firm Dewey & Leboeuf filed for chapter 11 bankruptcy protection on Monday night and will seek approval to liquidate its business after failing to find a merger partner, marking the biggest collapse of a law firm in US history.
"During the first quarter of 2012, the firm was confronted with liquidity constraints that led to the precipitous resignation of over 160 of the firm's 300 partners by May 11," the New-York based firm said.
Dewey listed liabilities in the range of $100m to $500m, according to the filing. It had already terminated 433 of its 533 New York employees earlier this month, according to the state's labor department.
The firm's collapse is expected to be the subject of years of court proceedings, and a number of former partners have already retained lawyers to represent them.
Monday's filing follows months of turbulence, as wave after wave of partner defections shattered the high-profile firm from within. In April, the Manhattan District Attorney's office launched a criminal probe of former firm chairman Steven Davis. He has denied any wrongdoing.
The result of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, Dewey & LeBoeuf had about 1,450 attorneys at its peak, according to The National Law Journal.
But the firm was eventually undone by a combination of the economic downturn, excessive compensation and governance problems, according to former partners and others in the industry. In particular, Dewey's management promised millions in packages to about 100 partners, according to the court filing, leaving it strapped for cash when revenues fell during the recession.
(Excerpt) Read more at telegraph.co.uk ...
Yes, the laws of economics apply to you, too.
Someone better get in there and put their arms around the client escrow and trust accounts...or what is left of them.
I can see those clowns scurrying about now like roaches leaving a room when the lights go on.
Our educational system mints attorneys, other countries mint engineers. The term “run it by legal” has become the new go code in business now.
apparently the knock on effect is huge.
This is gonna be a mess for years to come.
Dewey, Cheatham, and Howe?
Silky Pony may soon be free to work cheap. Couldn’t they have waited one more week at least before going bust?
-—The term run it by legal has become the new go code in business now.——
Just don’t put it in an e-mail. ;-)
Do law firms even have email?
“...precipitous resignation of over 160 of the firm’s 300 partners...”
Gives me the image of slime oozing out.
That’s going to be the most pedantic bankruptcy ever.
can you imagine the crap that is gonna come out about this place. Holding it together, things stay but once it falls apart, the amount of dodgy dealings are going to appear and questions asked.
Wonder how many Millions they gave to Hope and Change in 2008. They got change thats for sure.
Sounds like the Government and its Union friends.
Simply the 1% version of the union pension & benefits overloading.
Watch the lawsuits and DA investigations coming thick and fast soon.
Apparently the Manhattan DA has already begun.
Its gonna be like the law firm version of Lehman.
With the finger-pointing well under way at Dewey & LeBoeuf, the once-proud law firm on the brink of dissolution, its partners agree the former chairman, Steven H. Davis, shoulders a large chunk of the blame for its stunning fall.
Yet amid the recriminations, two sharply divergent views of Mr. Davis have emerged.
Some Dewey partners suspect him of being a crook. Last month, several of them presented the Manhattan district attorneys office with evidence of possible financial improprieties by Mr. Davis. The office has opened a criminal inquiry.
Only took five posts...