Citigroup

As we mentioned in the Labor Day edition of Morning Docket, there’s some interesting news on the Dewey & LeBoeuf front. The one former Dewey partner being sued by Citibank for allegedly defaulting on a capital loan — energy lawyer Steven Otillar, now a partner in the Houston office of Akin Gump — is opposing Citi’s attempt to collect on the debt, by arguing that he was “fraudulently induced” to borrow the money in question.

How much are we talking about? How does the debt compare to Otillar’s compensation while at Dewey? And what are Otillar’s specific allegations about “fraudulent inducement”?

double red triangle arrows Continue reading “Dewey Collude With Citi To Screw Individual Partners?”

Back in the day, Ted Kennedy could cheat his ass off.

* ‘Unprecedented’ cheating at Harvard. Nice to know that Ted Kennedy’s spirit is alive and well in Cambridge. [Harvard Crimson]

* Court accidentally posts secret settlement. That’ll teach these courts from keeping secrets. [Boston Globe]

* Here is an appropriate response to a law firm brochure. [Lawprofblawg]

* Former News of the World lawyer arrested. You know, the problem with the News of the World scandal is that it’s one of those things that happens somewhere else and so Americans don’t care. Americans like me. [Wall Street Journal]

* Cincinnati law profs pass around the collection plate and come up with a scholarship for students. [Tax Prof Blawg]

* Citibank settled with its shareholders for being buying bad assets. In other news, Citibank bought a lot of bad assets. [Dealbreaker]

The fable of the ant and the grasshopper may have lessons for the world of large law firms.

As regular readers of Above the Law well know, most major law firms — with a few notable exceptions — did not pay spring or mid-year bonuses in 2012. Our associate readers generally viewed this news with disappointment, while our partner readers had less of a problem with it.

But perhaps even associates should have been supportive of their firms’ decisions not to pay spring bonuses. Storm clouds are gathering over the law firm world. So says a recent report by Biglaw’s biggest bankers, over at Citigroup….

double red triangle arrows Continue reading “In Praise of Partners’ Prudence: Why the Lack of Spring Bonuses May Have Been a Good Thing”

Law firm financials can be shrouded in mystery. Sure, the American Lawyer releases its closely watched and highly influential Am Law 100 rankings each year, which shed some light on the subject. But these numbers are not Gospel truth, and sometimes they get restated — which is what happened last month to Dewey & LeBoeuf.

Making a material misrepresentation to the American Lawyer doesn’t violate the securities laws. Making a material misrepresentation in connection with the purchase or sale of any security — well, that’s more problematic.

Let’s take a closer look at a subject we mentioned last night and again this morning, namely, the offering memorandum for Dewey’s 2010 private placement of $125 million in bonds….

Note: we’ve added UPDATES, after the jump.

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The law firm of Dewey & LeBoeuf, which is currently fighting for its life, might have good news to report — and we’re happy to share it with you. It seems that LeBoeuf is not yet cooked.

As we’ve previously mentioned, tomorrow, April 30, was supposed to be the deadline for Dewey to reach a new deal with its syndicate of bank lenders. The firm owes its banks a reported $75 million pursuant to a $100 million revolving line of credit.

So what’s the latest — and relatively upbeat — news about Dewey?

UPDATE (4:30 PM): Additional, less cheerful Dewey updates — about the talks with Greenberg Traurig, and about embattled ex-chairman Steven H. Davis — have been added after the jump.

UPDATE (6:00 PM): More Dewey debt news — good news, happily — has been added below.

double red triangle arrows Continue reading “Dewey Have Good News To Report? Quite Possibly”

Today we’ll give you a double dose of Dewey. This morning we published an eloquent email from a Dewey paralegal, which looked at the story from a human-interest perspective. Now we shall return to the business aspects of the crisis.

Last week, we mentioned that tax partners Fred Gander and Hershel Wein were in talks to leave Dewey. Those talks have come to fruition: Gander is heading to KPMG, where he will lead its U.S. tax practice for Europe and the Middle East, and Wein is joining him there.

Now let’s look at the big picture: Dewey’s looming debt deadline, and the possible rescue by Greenberg Traurig….

double red triangle arrows Continue reading “Dewey Have A Shot Of Working Out A Rescue Plan — Before The Loans Come Due?”

What must it be like right now to be working at Dewey & LeBoeuf? One imagines a lot of whispered conversations, furrowed brows, and closed office doors. It’s a difficult and stressful time at D&L. To our friends at Dewey, keep your chins up (but, at the same time, do what you need to do to protect yourself and your career).

The anxiety at Dewey is increased by the firm’s cash crunch. Lawyers and staff at the firm are having a harder time doing their jobs because certain resources aren’t available to them.

Even in the digital age, with so many documents transmitted electronically rather than physically, FedEx is still a mainstay at major law firms — but not at Dewey. “We are restricted from using the account and now have to rely on UPS or express mail for overnights,” a source at Dewey told us. “Even if a package is labeled to go out via FedEx, when it goes down to mailroom it is relabeled for one of our new shipping methods. Do you know any other company that can stay afloat without FedEx?”

Will Dewey be staying afloat? Let’s hear the latest about other services that D&L lawyers and staff can’t use, some possible partner departures, and the firm’s ambitious plan for saving itself — via bankruptcy….

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(Plus more potential defections, and bankruptcy planning.)”

About two weeks ago, we covered reports about Dewey & LeBoeuf possibly shedding some of its overseas offices. We noted at the time, however, that the reports were vague, and we added that some D&L sources denied the existence of plans for closing any specific foreign office.

Well, the reports are getting increasingly detailed. Word on the street is that D&L might shutter three of its offices in the Middle East. And the firm’s Moscow office is reportedly being courted by other major U.S. law firms.

Which offices are being considered for closure? And who are Dewey’s suitors in Moscow?

double red triangle arrows Continue reading “Moscow and the Middle East: Dewey Have A Problem?
(Plus more about Dewey’s loan covenants.)”

Judge Jed Rakoff

It is commonplace for settlements to include no binding admission of liability. A settlement is by definition a compromise. We know of no precedent that supports the proposition that a settlement will not be found to be fair, adequate, reasonable, or in the public interest unless liability has been conceded or proved and is embodied in the judgment. We doubt whether it lies within a court’s proper discretion to reject a settlement on the basis that liability has not been conclusively determined.

Having considered the various explanations given by the district court for its refusal to permit the settlement, we conclude that the S.E.C. and Citigroup have a strong likelihood of success in their joint effort to overturn the district court’s ruling.

– A panel of the U.S. Court of Appeals for the Second Circuit, in a per curiam opinion granting a stay pending appeal in the SEC’s case against Citigroup.

(A quick refresher on this case, after the jump.)

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* How many of these suggested New Year’s resolutions should the members of the Supreme Court consider following? Eight out of ten resolutions wouldn’t be too shabby. [Huffington Post]

* Like a virgin, detained for the very first time: thanks to this court order, Egypt will be forced to come out of the dark ages and ban virginity tests for female detainees and military prisoners. [CNN]

* Oh, hell no. Judge Jed Rakoff issued an order 78 seconds after the Second Circuit decided to delay the SEC’s Citigroup case. His pimp hand is strong (which is impressive!). [WSJ Law Blog]

* As an attorney, you should know that the law stops for no one, not even Santa Claus. Major deals in Asian markets kept many Biglawyers working hard this holiday season. [Am Law Daily]

* Social media subpoena fail: “Haha. Boston PD submitted to Twitter for my information. Lololol? For what? Posting info pulled from public domains? #comeatmebro” [Boston Herald]

* 2011 didn’t bring us a white Christmas, but New Yorkers are still pissed about the Great Blizzard of 2010. The trapped A-train passengers have finally brought suit against the MTA. [New York Post]

* A former stripper is suing a police officer for allegedly stealing money from her purse. This girl fit $714 in dollar bills in a small, Coach bag? That’s actually a real accomplishment. [ABC News]

* It’s been seven hours and fifteen sixteen days, since you took your love away. Nothing compares to a Vegas wedding, because Sinead O’Connor’s marriage is already over. [Los Angeles Times]

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