Law Firms

Insurer Sues Ex-Dewey Lawyers over Bond Investment Loss

Three former leaders of Dewey & LeBoeuf are facing a new lawsuit over the law firm’s demise.

The Aviva Life and Annuity Company claims in a federal lawsuit that Dewey leaders made false and misleading statements implying the law firm was in good financial health, leading the insurer to lose 45 percent of a $35 million investment in a 2010 bond offering, the Am Law Daily reports.

The suit filed in Des Moines, Iowa, names as defendants former Dewey chairman Steven Davis, former executive director Stephen DiCarmine, and former chief financial officer Joel Sanders.

Ned Bassen of Hughes Hubbard & Reed represents DiCarmine and Sanders. He told the Am Law Daily that lawyers and bankers hired by the firm decided what should be included in materials for the bond offering. “I’d go so far as to say this is a frivolous lawsuit,” he said. He plans to file a motion to transfer the suit to bankruptcy court in New York.

The lawyer representing Davis, Kevin Van Wart of Kirkland & Ellis, said his client planned to mount a vigorous defense. “Rather than accept responsibility for its own investment decisions and actions, Aviva has decided to use Mr. Davis as a scapegoat, even though the complaint does not point to any dealings Aviva ever had with him,” he told the Am Law Daily.

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