May 4, 2012
By: John Clark
New York law firm Dewey & LeBoeuf, one of the largest firms in the United States, has hired a high-profile bankruptcy attorney as it struggles with mounting debts, according to a recent report from Reuters.
Sources indicate that the firm has retained the services of Albert Togut, who has represented scores of large companies in bankruptcy court, to consult with at least one member of the famous firm’s management team.
The firm has reportedly had to deal with severe financial pressure, which led to the departure of 23 percent of its partners since the start of this year. The loss of such a substantial number of partners has placed a serious dent in the firm, which employs roughly 950 lawyers.
In 2011, Dewey found itself unable to pay many of its long-term partners after the firm hired several high-profile attorneys. According to two partners who have left the firm, Dewey is in severe debt, including an unpaid $125 million debt, which has crippled its ability to pay all its attorneys.
Since most law firms are very conservative with their investments, such a substantial amount of debt is almost unprecedented at a major law firm. In response to the speculation, Togut has remained silent, and a spokesperson for Dewey simply told reporters that the firm “does not comment on speculation.”
Despite the speculation, sources are quick to note that the hiring of a prominent bankruptcy lawyer does not necessarily mean that the firm is preparing to file for bankruptcy. An alternative explanation for Togut’s presence could simply be that the attorney has been hired to help the firm renegotiate its debt with angry creditors.
Bankruptcy attorneys often help companies sort through their debt issues before heading to bankruptcy court. But a partner who left the firm has also suggested that the firm could be bracing itself for a pre-packaged bankruptcy, which would potentially allow Dewey to merge with another law firm.
In a pre-packaged bankruptcy, Dewey could reach an agreement with creditors before filing for bankruptcy, which would probably expedite the debt relief process. Of course, this strategy requires intense negotiations with the creditors outside of court.
PAID ATTORNEY ADVERTISEMENT: THIS WEB SITE IS A GROUP ADVERTISEMENT AND THE PARTICIPATING ATTORNEYS ARE INCLUDED BECAUSE THEY PAY AN ADVERTISING FEE. It is not a lawyer referral service or prepaid legal services plan. Total Bankruptcy is not a law firm. Your request for contact will be forwarded to the local lawyer who has paid to advertise in the ZIP code you provide. Total Bankruptcy does not endorse or recommend any lawyer or law firm who participates in the network nor does it analyze a person's legal situation when determining which participating lawyers receive a person's inquiry. It does not make any representation and has not made any judgment as to the qualifications, expertise or credentials of any participating lawyer. No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information contained herein is not legal advice. Any information you submit to Total Bankruptcy does not create an attorney-client relationship and may not be protected by attorney-client privilege. Do not use the form to submit confidential, time-sensitive, or privileged information. All photos are of models and do not depict clients. All case evaluations are performed by participating attorneys. An attorney responsible for the content of this Site is Kevin W. Chern, Esq., licensed in Illinois with offices at 25 East Washington, Suite 400, Chicago, Illinois 60602. To see the attorney in your area who is responsible for this advertisement, please click here, or call 866-200-8052.
FLORIDA ONLY: Total Bankruptcy is considered a lawyer referral service in the state of Florida under the Florida Rules of Professional Conduct. By all other standards, Total Bankruptcy is a group advertisement and not a lawyer referral service.
If you live in Mississippi, Missouri, New York or Wyoming, please click here for additional information.
By an Act of Congress and the President of the United States, we are a federal Debt Relief Agency. Attorneys and/or law firms promoted through this Web site are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.