More from Bloomberg about Dewey - all in all it doesn't look like much fun ...
Dewey, Shearman, Goodwin Procter, Skadden: Business of Law
Dewey & LeBoeuf LLP, whose bank loans are partly secured with money due from clients, told partners they can?t have their monthly pay until they send all the bills for their services, a person familiar with the matter said.
Dewey is under orders from bankers to collect as much money owed to the firm as possible after the departure of about 85 partners and the ouster of chairman Steven Davis, according to another person familiar with Dewey?s finances. The banks are reluctant to put the firm into bankruptcy as that might make it harder to collect the bills, that person said. Both people didn?t want to be identified because the matter wasn?t public.
By last month, the New York-based law firm had drawn about $75 million of a $100 million credit line from banks including JPMorgan Chase & Co. (JPM) and Citigroup Inc., the second person said.
Lenders were considering a 120-day extension of the credit line until a possible combination of the firm with Greenberg Traurig LLP fell through, the person said.
?The banks know that Chapter 11 will add another whole layer of huge expense and involve years of litigation with little gained,? said Anthony Sabino, a lawyer and professor at the Peter J. Tobin College of Business at St. John?s University in New York.
Michael Sitrick, a spokesman for Dewey, didn?t immediately return an e-mail yesterday after regular business hours seeking comment on the firm?s financial situation.
Dewey was the 11th-largest U.S. law firm with 1,300 lawyers after a merger during the 2007 recession.
Merger discussions with law firm SNR Denton, where it would have taken on more than 1,000 remaining Dewey lawyers, fell apart yesterday, the Wall Street Journal reported, citing people familiar with the matter. The deal hinged on the combined law firm?s ability to raise hundreds of millions of dollars in financing, the newspaper said.
In the firm?s Manhattan offices, employees for outsourced services have gone and Dewey?s own support staff may be gradually dismissed as more lawyers leave for other firms, said the first person familiar with Dewey?s situation. Contrary to some online reports, the photocopiers are still there and the computers are working, the person said.
More than 85 partners have left the U.S. firm in recent weeks. Yesterday Jones Day announced that Ira White had joined the firm as a partner in the New York office. He was previously a partner in Dewey?s private equity practice and co-chairman of the private equity transactions group, the firm said in a statement.
