Partners of Dewey & LeBoeuf in Dubai have filed for creditor protection with the Dubai International Financial Centre (DIFC) Courts. The law firm filed for bankruptcy at the end of the month of May after more than 160 partners left the firm. Those 160 that left were from a pool of 300 partners. The partners left the firm because Dewey could not service its debts. It is the biggest collapse in the history of the American legal industry.
At the start of May, the Dewey office in DIFC closed its doors. Even though the doors have closed, three of the partners from that office have filed claims to protect the local assets of the firm from being reclaimed by the liquidators of the company in New York. Shahab Haider, a managing partner for Sajjad Haider Chartered Accountants, said that this will become a test case for DIFC insolvency laws. Haider was appointed to the provisional liquidator position for the Dubai operations of Dewey.
“This is a unique situation in a sense,” he said. “The whole purpose of this suit is that local assets and liabilities are returned in accordance with DIFC laws. What they’ve done is effectively shut the operations here in the DIFC so that all local assets and liabilities are returned on an equitable basis.”
Should the creditor protection laws succeed, then the firm would retain enough money to pay local employees for end-of-service and pay trade creditors. The next scheduled hearing for the case is a week from today.