Dewey looks to cash in on property to help pay lenders

Dewey & LeBoeuf is negotiating the future of its European property as it looks to pay off creditors in the face of the imminent dissolution of the London office.

The firm’s City landlord Prudential has had representatives in the London offices today negotiating its position as one of the embattled firm’s largest UK creditors.

Meanwhile, Dewey is in talks with Morgan Lewis & Bockius over plans for a sale of the lease on its Moscow offices in a bid to raise cash for its lenders, with the negotiations following the departure of lead partners Brian Zimbler and Jonathan Hines to the US rival (4 May 2012).

The developments come amid urgent negotiations as the US firm prepares for the dissolution of its London and Paris LLP, with representatives of accountancy firm BDO understood to have made physical appearances in the firm’s London offices. BDO has been advising Dewey’s London partners on the wind-down since last Tuesday (1 May 2012).

Sources close to the firm said the London office could close as early as next Tuesday (15 May), in line with the widely touted closure of the US operations on the same day, although a Dewey spokesperson would not confirm this.

Some Dewey staff are expected to remain in the London office even after the dissolution, with director of international finance Alison Clifford thought likely to stay to work on ensuring outstanding bills are paid.

It is thought that a number of parties are interested in taking on Dewey’s London floorspace.

Commenting on a sale of the Moscow office lease to Morgan Lewis, a source commented: “It’s been discussed. Dewey are trying to do this to get money for the lenders.”

Peter Sharp
Peter Sharp

The three-partner committee – depleted since the departure of London office head Peter Sharp (3 May 2012) and Bruce Johnston (4 May 2012) to Morgan Lewis – held a meeting yesterday to review the situation.

The meeting followed a tense gathering of London legal and support staff on Tuesday in which anger is understood to have been directed at former London boss Sharp, who was not present (8 May 2012). Those present were told that they could only be guaranteed pay until 31 May and that their salaries for this month had been placed in a secure bank account.

Meanwhile, Orrick Herrington & Sutcliffe has taken on a Dewey Moscow team consisting of corporate local partner Leo Batalov and finance local partner Dmitry Gubarev as well as London finance associate Cristina Volc.

Dewey and Prudential were not available for comment. BDO declined to comment.

A Prudential spokesperson said the company frequently engages with its tenants, adding that there were no new negotiations in process with this occupier.