Citigroup

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….

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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?

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(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]

* A man on trial for sex crimes at a Minnesota courthouse allegedly shot three people yesterday, including prosecutor Timothy Scannell. Guess it’s time to get a metal detector. [Duluth News Tribune]

* Instead of trying to force Citigroup’s hand on a tougher settlement, the SEC is appealing Judge Rakoff’s rejection of the original. Don’t want to make the SEC do more work now, judge. [Bloomberg]

* You’d think that by now, law schools facing scrutiny over employment data would be willing to turn over some information to Law School Transparency, but you’d be wrong. [National Law Journal]

* China’s King & Wood and Australia’s Mallesons Stephen Jaques are combining to form a happy family this March. If this were in Japan, they’d be the Godzilla of law firms. [Wall Street Journal]

* Obvious news alert: Foxy Knoxy was acquitted of murder because there wasn’t enough evidence to prove she was guilty of murder. Thanks for this brilliant observation, Judge Hellman. [CNN]

* The Toy & Action Figure Museum will be opening a lawyerly superhero exhibit. This generation of lawyers has no superheroes, because unemployment isn’t a super power. [ABA Journal]

Drums please:

Bonus, bonus, bonus time. Time to sit back and unwind.

The first bit of bonus news has leaked out of Biglaw. We’re not talking about spring bonuses, and we’re not talking about random mid-year bonuses. We’re talking about regular, end-of-the-year, take-it-to-the-champagne-room bonuses.

And sure, the early news is bad, but that’s to be expected. This first report is just what Biglaw wants you to hear.

But if the past year in bonus news proves anything, it’s that Cravath sets the bonus market, even when they do it late….

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Burt Reynolds

* I know we’re a little tight for money, but we should find some money in the budget to make sure faded American stars are bailed out of the housing crisis, just like the banks were. [Monsters & Critics]

* Illinois’s redrawn legislative districts draw legal fire. I have an idea: let’s use Illinois as a laboratory for direct sponsorship of Congressional seats. I recognize the distinguished gentleman from Pizza Hut. [WSJ Law Blog]

* If anybody at Citi would like to sue for stress due to the fire drill there today, there are a bunch of out-of-work lawyers who would love to help you. [Dealbreaker]

* Prosecuting your own stalker: it’s a good story. This being the most I’ve read in a Marie Claire, however, I need to go hunt something and eat its liver to rebalance my hormones. [Marie Claire]

Stephen Mark McDaniel

* Here’s a chatwrap with Amy Leigh Womack and Joe Kovac, two reporters who have been covering the Stephen McDaniel / Lauren Giddings case down in Macon. The last time I remember Macon being this relevant to my day-to-day life, John Rocker was involved. [Macon Telegraph]

* Having to purchase legal services from a Wal-Mart that looks like a Neiman Marcus is probably something that happens in Hell. But it can’t be much worse that having to buy your clothes in a place where you buy your food. [An Associate's Mind]

* Lady lawyers: looking for a way to spend that spring bonus or partnership draw? Here are ten handbags that cost five figures. [Fashionista]

Although it officially passed away back in March, when its partners voted for dissolution, the law firm of Howrey LLP continues to twitch in its grave — or maybe even step out of its grave and walk around a bit, like a zombie from a horror flick.

Howrey continues to have a presence on Twitter, for example. A D.C.-based reader pointed out to us that the April 2011 issue of Washington Lawyer magazine contained a partnership announcement for the firm, on page 44: “Stephen D. Palley and Andrew R. Sommer have been named partner at Howrey LLP.” (Both landed on their feet: Palley is now a principal at Ober|Kaler, and Sommer is now of counsel at Winston & Strawn.)

And, strangely enough, Howrey is still seeking client engagements….

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Although Howrey LLP officially dissolved as a partnership as of March 15, some operations continued beyond that date. But at the close of business today, the firm is going into a more complete shutdown, due to a withdrawal of bank financing.

“Last night, we received notice via email that Howrey is closing as of today, because CitiBank refuses to pay the payroll,” one source reported. “CitiBank has also refused to pay our PTO [paid time off], and our pension contributions.”

“Citibank has closed the door on Howrey operations today, more than a month before the May 9th date listed on WARN notices,” a second tipster confirmed. “No PTO, pensions will be paid out.”

UPDATE (6 PM): Citi takes issue with Howrey’s take on events. From a Citi spokesperson: “We are deeply disappointed in Howrey’s mischaracterization of the situation. Citi is not responsible for the employment practices of a client and has acted in a professional manner throughout this process.”

The full Howrey memo, after the jump.

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Firm shutting down today, after Citi pulls plug.

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