Now in Legal Rebels:
Posted May 25, 2012 11:32 am CDT
As Dewey & LeBoeuf’s top partners move on to other firms, its debt is also changing hands.
Three out of four banks owed a reported $75 million by the crumbling law firm have sold part of the debt, a source tells the Am Law Daily. The lenders are Citi Private Bank, Bank of America and HSBC. The fourth lender, J.P. Morgan Chase, has filed a lien with New York publicizing its security interest, the story says.
An official with the firm that had been advising Dewey on finances, William Brandt of Development Specialists Inc., told the Am Law Daily he has never seen a bank sell its debt in such a situation. The amount of debt is much greater, though, than in the case of dissolved law firms such as Howrey. “The debt here is worth trading,” he tells the publication.
Dewey’s bond debt, which amounted to $125 million in 2010, has also been sold.
Brandt says he still believes enough money is available to fund Dewey’s operations. As many as 200 employees are still working at the firm, he said. Fewer than 20 partners are still with the firm in the United States, according to the Am Law Daily’s tally.