- Individual Dewey Partners and Banks That Loaned Them Equity to Pay to Firm Are Now at Odds
Individual Dewey Partners and Banks That Loaned Them Equity to Pay to Firm Are Now at Odds
Posted Jun 25, 2012 12:49 PM CST
By Martha Neil
It isn't just Dewey & LeBoeuf that's reportedly laden with debt.
A number of individual partners borrowed money from banks in recent years to fund their capital contributions to the firm and are mulling options as the banks that lent to them are making efforts to collect payments on the professional practice loans, Legal Week reports.
New partners, who were required to provide equity in an amount equal to about one-third of their target annual compensation, often took out such loans, the article says.
Now that Dewey is in bankruptcy court, "a small minority of partners have opted to pay back the banks out of personal savings, but the majority are unable to do so and are disputing the claim," an unidentified partner told the legal publication. Former partners say some are considering whether to negotiate jointly with their lender to try to reach a settlement.