Bankruptcy, Biglaw, Dewey & LeBoeuf, Dissolution, Partner Issues, S.D.N.Y.

Dewey File for Bankruptcy? Yes — It’s About That Time

This shouldn’t come as a surprise — we predicted it earlier this month — but the dying law firm of Dewey & LeBoeuf has filed for bankruptcy. We hope that you had a nice holiday weekend, because Dewey’s bankruptcy lawyers surely didn’t.

Under which chapter of the Bankruptcy Code is Dewey filing? Who is serving as bankruptcy counsel to the firm? What does Dewey’s balance sheet look like?

We have added UPDATES, after the jump.

The law firm that has handled such heated and high-profile bankruptcies as those of the Los Angeles Dodgers and NewPage Corp. has filed for Chapter 11 protection itself. We learned of the news on Sunday evening from one of our D&L sources:

Dewey filed Chapter 11 [tonight]. Filed as a wind-down; they’re closing up shop and liquidating.

First day motions to keep paying salaries, benefits, and paid time off in ordinary course of business filed; approval expected in 48 hours.

401k and pension plans in trust, can’t be touched by creditors.

Joff Mitchell as CRO [chief restructuring officer]. Albert Togut as bankruptcy counsel.

It was expected that Al Togut would handle the case. His name was mentioned as early as April as possible bankruptcy counsel for Dewey.

According to Reuters, the firm plans to ask 90 employees to stay on to assist in the wind-down, which it expects will take a few months. The wind-down will be followed by a liquidation, per DealBook — which notes that Dewey’s downfall represents “the largest law firm collapse in United States history.”

How big a bankruptcy are we talking about? Bloomberg reports that Dewey listed debt of $245 million and assets of $193 million in its filing in U.S Bankruptcy Court for the Southern District of New York (In re Dewey & LeBoeuf LLP, 12-12321).

“This is a very sad day for the legal profession,” former federal judge Richard Holwell told the New York Times. “Dewey is a fabled firm with a lot of great lawyers and a demise of this magnitude is unprecedented.”

We will continue to cover the dying days of Dewey & LeBoeuf. Dewey’s demise is sad and sobering, but perhaps there are lessons to be learned, as we (and many others) will explore in the weeks ahead. If you have information or opinions you’d like to share, please email us or text us (646-820-8477).

UPDATE (5/29/2012, 10:15 AM): On the next page, we have added the communications that were sent out to Dewey’s remaining employees about the bankruptcy filing.

UPDATE (5/30/2012, 8:45 AM): DealBook has a higher number than $245 million for Dewey’s debts, citing “about $315 million in liabilities.” There appears to be some internal inconsistency in the filings, as noted by the American Lawyer: “In raw terms, the firm’s Chapter 11 filing lists assets of roughly $193.2 million against liabilities of $245.4 million — a deficit of more than $52 million, as of April 30. (Elsewhere in the filings, the liabilities are listed as more than $315 million.)”

UPDATE (5/30/2012, 9:15 AM): We have embedded a copy of Dewey’s voluntary petition on the final page of this post.

UPDATE (5/30/2012, 10:30 AM): Here’s what happened during Dewey’s first day in bankruptcy court.

(hidden for your protection)

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