Storied law firm folds after partners flee

3:00 PM after, folds, partners, Storied No Comments

The crippled law firm Dewey & Leboeuf LLP filed for Chapter 11 bankruptcy protection Monday night and will seek approval to liquidate its business after failing to find a merger partner, marking the biggest collapse of a law firm in U.S. history.

Once one of the largest law firms in the U.S., Dewey has been hit by the loss of the vast majority of its roughly 300 partners to other firms amid concerns about compensation and a heavy debt load.

Dewey had warned employees earlier this month of the possibility the firm may shut down, and a person familiar with the matter had told Reuters that the firm was considering a bankruptcy filing.

"Dewey's failure is rocking the industry in the sense that most firms are saying to themselves, if Dewey could go down, could we?" Kent Zimmermann, a legal consultant at the Zeughauser Group, said in an email Monday night.

Dewey said in a filing it had decided to wind down its business following unsuccessful negotiations with other law firms to strike a deal. It said it would ask about 90 employees to remain on staff to assist in the liquidation, which it expects to be completed in the next few months.

Negative economic conditions, along with the firm's partnership compensation arrangements, created a situation where its cash flow was insufficient to cover capital expenses and full compensation expectations, Dewey said.

"During the first quarter of 2012, the firm was confronted with liquidity constraints that led to the precipitous resignation of over 160 of the firm's 300 partners by May 11," the New-York based firm said.

Dewey listed liabilities in the range of $100 million to $500 million, according to the filing. It had already terminated 433 of its 533 New York employees earlier this month, according to the state's labor department.

Turbulence
The firm's collapse is expected to be the subject of years of court proceedings, and a number of former partners have already retained lawyers to represent them.

Monday's filing follows months of turbulence, as wave after wave of partner defections shattered the high-profile firm from within. In April, the Manhattan District Attorney's office launched a criminal probe of former firm chairman Steven Davis. He has denied any wrongdoing.

The result of a 2007 merger between Dewey Ballantine and LeBoeuf, Lamb, Green & MacRae, Dewey & LeBoeuf had about 1,450 attorneys at its peak, according to The National Law Journal.

But the firm was eventually undone by a combination of the economic downturn, excessive compensation and governance problems, according to former partners and others in the industry. In particular, Dewey's management promised millions in packages to about 100 partners, according to the court filing, leaving it strapped for cash when revenues fell during the recession.

Dewey has retained Joff Mitchell of Zolfo Cooper LLC as Chief Restructuring Officer and Albert Togut of Togut Segal & Segal LLP as bankruptcy counsel.

"The full extent of the partner compensation arrangements is subject of continuing investigation," Mitchell said in the filing.

Dewey is one of a handful of major law firms to declare bankruptcy since the recession that began in 2007. They include Coudert Brothers, Heller Ehrman and Howrey.

Pensions plans
As of the petition date, Dewey's assets consisted of about $13 million in cash, accounts receivable of about $255 million, various pieces of artwork, and about $11 million invested in an insurance consortium, among other potential claims, according to the filing.

In the interim, Dewey said the firm will be operating on a budget to be determined by the court. The firm has petitioned the court for permission to continue to pay salaries, benefits and paid time-off for current employees.

Dewey said that 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 U.S. Pension Benefit Guaranty Corporation filed suit this month to take control of three of the firm's pension plans, which the agency said were underfunded by $80 million.

The London and Paris offices of the firm 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 in the United States, the firm said.

The firm had two dozen offices worldwide, including in Washington, Los Angeles and London. Some of the firm's biggest clients included General Motors Corp, eBay, Novartis, Ambac and Berkshire Hathaway Reinsurance Division.

The case is Dewey & LeBoeuf LLP, Case No. 12-12321, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

(c) Copyright Thomson Reuters 2012.

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BP gets $1 bln settlement of good golf partners

11:08 PM partners, settlement No Comments

LONDON - BP has struck partner in the ausgefressene well, get one much to approximately $1 billion by a minority hopes to pursue it successfully other participating companies and reduce the Bill for the disaster cause.

BP PLC said on Thursday that MOEX offshore 2007 LLC, which pay a 10 percent interest on the Macondo had wells, to 1,065 billion, has agreed to settle all claims between the undertakings of the accident on the deepwater horizon rig.

The settlement agreed upon MOEX, a unit of Japanese trading house Mitsui & co., findings by the US Presidential Commission recognize, that the accident "the result of a series of separate risk factors, failures and outright errors by several parties and a number of causes."

He realized also results from the US Coast Guard, that "the Transocean's safety management systems and its deepwater horizon rig significant deficiencies, the them in preventing the accident ineffective."

Shares in BP closed 2.7% higher at 460 pence ($7.50) after analysts said that the deal puts pressure on BP the other minority shareholders, Anadarko, a similar deal to reach and leaves open rig operator Transocean, a combined assault on damages.

Evolution financial analyst Richard Griffith said success on the fronts of its estimate of the sum of BP which would reduce liabilities, which currently is 25-30 billion dollars.

"Critical Mitsui has BP joined, in the knowledge that the accident was the result of a number of risks and the actions of several parties," said Griffith. "Perhaps more clearly the wider recognition that Transocean's safety management systems on the rig were deficient, and where this might be is BP and its license partner Transocean liability for compensation, making the total size of the net to BP."

Jonathan Jackson, Director who shares to Killik & co., said he was "somewhat disappointed" by the size of the settlement, but the news was positive.

"It is the first time, which has also involved a company in which BP to help meet the costs of the accident connected and it seems to increase, clean water act would entail the probability, that the BP not gross negligence is found, a result, the much larger liability under the" Jackson said.

He added that BP could reach a global settlement, aggregated in a single offer liability for fines, damages and sanctions.

BP Friday said that it track, Texas-based Anadarko, that the well had a 25-percent interest to continue, based in the Switzerland of Transocean and cement contractor Halliburton, its share of the billions of dollars in cleanup costs, oil spill damage and pollution to pay fines.

MOEX submitted also cross claims against Transocean and Halliburton, the BP announced Friday "designed and pumped the unstable cement, the Presidential Commission found was a major cause of the accident."

However, said Transocean deepwater horizon rig was in "sound condition" and had passed inspection by the coast guard.

"As owner and operator of Macondo well, BP has clearly financial incentives for other parties assign blame, but his public position is through the body of evidence in this matter, does not support" the company said in a via e-Mail statement. "Government investigations have found rightly, that the incident of Macondo was caused by an error of cement into the well."

BP has booked already a 32.2 billion US-dollar charge to cover the long-term cost of the Gulf spill. It's $30 billion in assets by the end of the year means targeted support.

BP Chief Executive Bob Dudley said that Mitsui "large civic shows in behind its affiliate and a contribution to the bear the costs for this tragic accident."

"We call on the other parties involved in the Macondo well, the lead of follow the MOEX and Mitsui parties," he added in a statement.

Immediately the settlement of MOEX is paid $20 billion in the trust, which has set up BP to meet individual, business and Government claims in last year's oil spill.

MOEX had filed a lawsuit in New Orleans on 20 April anniversary of the Gulf spill, questions, a federal judge, it was not responsible for the damage and cleanup to declare costs resulting from the worst off-shore oil spill in U.S. history. MOEX along with Anadarko in sued BP, with two companies claim that London-based BP for the blow-out and the spill was responsible.

BP said that the payment of MOEX Friday was announced - to the detriment of its parent company, MOEX United States Corp. - no admission of liability by any party with regard to the accident. The companies are mutual claims against each other.

The news of the settlement London Group Investec coincided with a report from financial services calls for BP Board, the company into three separate groups of separation - focuses on the United States, United Kingdom, and emerging markets.

Investec said that BP worse has the market by 14 percent in dollar terms and 5 percent on the previous year.

"BP business model is broken, from our point of view" Investec analysts Stuart Joyner and Angus McPhail said in a note. "However, we think, you could again its reputation as the industry thought leader by the company in three parts."

The pair struck a unit of US in New York listed by BP US refining and gas exploration & production business. A separate exploration & production business could focus on UK and mature markets in London, the analysts said, with fast-growing units for developing countries to be listed in London and Mumbai/Hong Kong.

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