Dewey & LeBoeuf LLP, the law firm trying to stay out of bankruptcy as it collects bills to pay creditors, told employees it eventually may have to close if it can’t resolve its financial difficulties, according to Binghamton Bankruptcy Lawyers familiar with the case.
Dewey, based in New York, told employees yesterday it was distributing the letter to comply with labor laws that require 60 days notice of large-scale layoffs.
Although they continue to pursue various avenues, it is possible that adverse developments could ultimately result in the closure of the firm, which would result in the termination of employment.
Accordingly, in order to give employees as much advance notice as possible, and to comply with any legal obligations that may arise, the distributed letter serves as conditional advance notice under the Federal Worker Adjustment Retraining and Notification Act.
Dewey is under orders from bankers to collect as much money owed to the firm as possible after the departure of about 90 partners. West Orange Bankruptcy Lawyers state that the banks are reluctant to put the firm into bankruptcy as that might make it harder to collect the bills.
Credit Line
By last month, the New York-based law firm had drawn about $75 million of a $100 million credit line from banks including JPMorgan Chase & Co. and Citigroup Inc.
Lenders were considering a 120-day extension of the credit line until a possible combination of the firm with Greenberg Traurig LLP fell through, say Chicago Bankruptcy Lawyers.
Dewey was the 11th-largest U.S. law firm with 1,300 lawyers after a merger during the 2007 recession. American Lawyer’s 2012 rankings puts the firm in 28th place, with revenue of $782 million for 2011 and 1,040 lawyers.
Dewey Ballantine and LeBoeuf Lamb Greene & MacRae merged in October 2007. The marriage produced an international firm with offices in 25 cities and revenue of more than $900 million. The LeBoeuf Lamb Chairman took the helm and was ousted this year after a probe into possible wrongdoing at the firm was begun, Dewey disclosed in an earlier memo.
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