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Dewey & leboeuf said to face criminal probe as deadline nears by efwegbe erergeer
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Dewey & leboeuf said to face criminal probe as deadline nears |
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Business,Business News,Business Opportunities
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April 28 (Bloomberg) -- Dewey & Leboeuf LLP, the New York lawfirm fighting to stay alive after more than 70 partners left, isthe subject of a criminal probe by state prosecutors into whethermanagers misled partners about payments due them, a person familiarwith the matter said. The investigation by Manhattan District Attorney Cyrus Vance Jr. isin a preliminary stage and has yet to determine whether a crime hasbeen committed, said the person, who declined to be identifiedbecause the matter isn't public. Dewey, the No.
3 law firm adviser to banks handling merger deals,faces an April 30 deadline to show bank lenders it has a survivalplan, possibly including absorption by another firm orcost-cutting. The law firm has lost about 72 partners in recent months amidcomplaints about pay and a plan to restructure the firm. It hasdrawn about $75 million of a $100 million credit line from banksincluding JPMorgan Chase & Co. and Citigroup Inc., according toa person familiar with the firm's finances. The banks extended aninitial April 16 deadline to come up with a plan, according to aperson familiar with a merger proposal Dewey has presented to otherlaw firms.
Defections Mounted Erin Duggan, a spokeswoman for Vance, declined to comment. AngeloKakolyris, a spokesman for Dewey, didn't return a call seekingcomment yesterday on the probe. On April 26, he declined to commenton the deadline. In a copy of an internal memorandum obtained by Bloomberg News anddated yesterday, the law firm said it's aware of an investigationby Vance into one Dewey attorney involved in the firm's management.The firm said in the memo that it has begun an internal probe andplans to cooperate with Vance's office. Harvey Kurzweil and SethFarber, as counsel to the firm, were asked to conduct the internalinvestigation, according to the memo.
Last month, as defections mounted, Dewey restructured itschairman's office to include the heads of four practice groups inaddition to Chairman Steven Davis. The group includes MartinBienenstock, who runs the firm's restructuring group; Rich Shutran,head of the corporate department; Jeffrey Kessler, head oflitigation; and Charles Landgraf, who runs the Washington officeand the legislative and public-policy group. The firm said last week that it was considering "various pathsincluding continuing to operate as an independent global law firmand a strategic combination with another leading law firm." Apossible partner is Greenberg Traurig LLP, which has held"preliminary discussions relating to lawyers at Dewey" and wasmaking no commitments, Jill Perry, a spokeswoman for Greenberg,said. In addition to the bank deadline, the firm also has $125 million inbonds sold to insurance companies in 2010 to refinance previousbank loans. Next Year The bonds, placed by New York-based JPMorgan, come due between nextyear and 2020, Dewey said at the time.
The firm's revenue last yearwas $782 million, compared with about $760 million in 2010,according to the American Lawyer, a trade magazine which tracks lawfirm results. The trade publication lowered its numbers for Deweythis month after getting what it called "newly obtainedinformation." A team led by partners Bienenstock and Bruce Bennett was weighing aso-called pre-packaged bankruptcy, one of the people familiar withthe firm said. A bankruptcy plan approved in advance by creditorscould lead to a merger with another U.S. firm, said the person, whodidn't want to be identified because they weren't authorized todiscuss the plans.
The team also explored what might happen if the firm shut down, theperson said. Closing Dewey would make it much more difficult formembers of the firm's limited liability partnership and creditorsto get any money back, the person said. I am Animal Extract writer, reports some information about custom fitted jeans , columbia fishing vest.
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