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Dewey & LeBoeuf files for bankruptcy protection

29 May 2012

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By Manju Manglani, Editor (@ManjuManglani)

International law firm Dewey & LeBoeuf has filed for bankruptcy protection.

It announced yesterday evening that, in an effort to preserve assets and wind down its business in the most orderly and efficient way possible, it has filed for protection under Chapter 11 of the US Bankruptcy Code. The filing was made at the US Bankruptcy Court for the Southern District of New York.

Unlike most other Chapter 11 cases, this filing does not anticipate a return to business but rather a managed wind-down of affairs, followed by liquidation. Dewey & LeBoeuf expects the most significant portion of the process to be completed in the next few months. In the interim, the firm will be operating on a budget and according to a timetable to be determined by the court.

The firm’s clients will continue to be served mainly by former Dewey partners who have moved on to other firms in recent months.

Dewey & LeBoeuf will also continue to enlist the assistance of former partners and associates to help collect accounts receivable owed to the firm.

“We are proud of the dedication and professionalism that has characterized Dewey & LeBoeuf over many years, and we intend to bring the same focus to the unfortunate task of closing out our affairs,” said executive partner Stephen J. Horvath.

The firm has petitioned the Court for permission to continue to pay salaries, benefits and paid time off in the ordinary course of business for current employees, consistent with bankruptcy laws. This permission is expected to be granted within 48 hours of the filing. The firm will also ask approximately 90 employees to remain on staff to assist in the wind-down.

Dewey & LeBoeuf said the 401(k) plans and qualified pension plans of its current and former employees and partners are held in trust and cannot be accessed by the firm’s creditors.

The firm has consolidated its operations and intends to sharply reduce the size of the office space it occupies at its New York headquarters on Avenue of the Americas.

Other domestic and foreign offices have been or are in the process of being closed.

The London and Paris offices of Dewey & LeBoeuf are operated through a separately incorporated UK entity, which was placed into administration on Monday. Administration is a UK legal process under court supervision, broadly similar to Chapter 11.

The UK partnership is following broadly the same approach as that of Dewey & LeBoeuf in the US. Mark Shaw and Shay Bannon, business restructuring partners of BDO, were appointed joint administrators of the UK entity.

The firm has said it will work with its landlords to help lessors of telecommunications, computer equipment and furniture to recover and remove their property in a timely manner.

To ensure the preservation of legal files and other critical records, Dewey & LeBoeuf, as authorised and instructed by the court, will remain in regular contact with vendors who have custody of or help to manage such records.

Dewey & LeBoeuf has retained Joff Mitchell of Zolfo Cooper as chief restructuring officer and Albert Togut of Togut Segal & Segal as bankruptcy counsel.

The firm’s claims agent is Epiq Bankruptcy Solutions.

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