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Trials & Litigation

Claimed bank loan for $540K Dewey capital payment a ‘fabrication,’ says ex-partner in suit

Posted Feb 20, 2013 11:57 AM CDT
By Martha Neil

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Sued in the United Kingdom for allegedly defaulting on a Barclays Bank loan to finance his $540,000 capital contribution to Dewey & LeBoeuf, a former partner of the now-bankrupt law firm has fired back by filing a federal lawsuit in New York.

In it, Londell McMillan, who was in charge of Dewey's entertainment, media and sports practice group, contends that he declined to take out a loan from the bank and has "no recollection" of signing papers for the June 2010 loan, Reuters reports.

His suit, which was filed Tuesday, seeks recission of the claimed loan on the grounds that it is a "fabrication." McMillan says he had no reason to take out the loan because he was planning to leave the firm when it is alleged to have been made. Only days earlier, he says, he had received an email from chief financial officer Joel Sanders saying that Dewey would take the $540,000 out of the $1 million in compensation McMillan was due for the prior three years.

The bank declined comment when contacted by the news agency.

The Am Law Daily also has a story, and has provided a copy of the complaint (PDF).

Attorney Kevin Fritz represents McMillan and said that his client will also contend, if the loan is determined to be valid by the court, that Barclays defrauded McMillan by failing to disclose "material information" about Dewey's dismal finances at the time of the loan, Reuters reports.

Another ex-partner of the New York-based firm has claimed in litigation with a different bank that he was tricked into taking out a loan by misrepresentations made by Dewey about its finances and blamed the financial institution for not blowing the whistle.

See also:

Citibank Says It Had No Duty to Warn Ex-Partner About Dewey Finances

Ex-Dewey partner’s fraud claim re Citibank capital loan gets green light from federal judge

Top 25 Partners Got $70M in Dewey’s Last Year; Unsecured Creditors May See 15 Cents Per Dollar

Updated at 11:06 a.m. to include links to Am Law Daily article and complaint.

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