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Dewey Files Chapter 11; Judge Denies Request to Tap Their Collateral
Well it was a long time coming, but Dewey & LeBoeuf have succumbed to what many have called inevitable: listing $315 million in liabilities, Dewey has become the largest law firm in history to file for Chapter 11 bankruptcy.
With U.S. Bankruptcy Court Judge Martin Glenn presiding, a former partner of O’Melveny & Myers, Dewey kicked it off with an opening statement from their attorney Albert Togut:
“I can finally confirm the worst-kept secret of the year. I am counsel for Dewey & LeBoeuf.” But it seems everything about Dewey has been a worst-kept secret, and the firm itself affirms the persistent buzz of their immanent collapse as a major contribution to what lead their lawyers to make a mass exeunt.
In his 20 minute opening statement, Togut outlined the plotline of Dewey’s bankruptcy: he began with the 2007 merger of Dewey Ballantine and LeBoeuf, Lamb, Greene, & MacRae, the cost of the Great Recession, and concluded with the firms struggle with mounting debts and declining revenue that led most of their 300 partners to flee.
Most of the subsequent proceedings regarded Dewey’s failed attempt for Glenn to grant lenders a lien on the proceeds of future litigations so that Dewey could use their collateral; Glenn called the lien demand unreasonable.
The other 8 motions Dewey put forth, on the other hand, Glenn affirmed, such as allowing the estate to pay its employees and taxes before the firm filed bankruptcy, to continue to have access to their bank accounts, and to maintain their insurance policies. He also said that the partners should work out a way to fund a $700,000 insurance policy to cover Dewey’s dissolution team.
Though Dewey’s demise is the greatest in history, outstripping such goliaths as Brobeck, Phleger & Harrison; Cloudert Brothers’ Howery; Heller Ehrman; and the rest, with Dewey filing at $315 million, nevertheless, Togut said that “This is a group of people ho have acted responsibly.”