A former Dewey & LeBoeuf partner is suing Barclays for allegedly inducing him to enter into a $540,000 loan agreement with the UK lender to pay capital contributions.
The bank had pursued entertainment lawyer Londell McMillan for a professional practice loan following the US firm’s collapse in May last year. It sued the ex-partner in December in the UK’s High Court alleging a default on a loan and sought more than $550,000 in damages.
However, McMillan’s complaint, filed this week in the Manhattan federal district court, claims that Barclays “intentionally failed to disclose” Dewey’s indebtedness to him to “induce” him to enter into a loan agreement, “assuming it [the agreement] is not a fabrication”.
He claims the agreement included a clause entitling Barclays to demand repayment of the loan, including interest, if the firm’s indebtedness exceeded $250,000.
“By fraudulently inducing [McMillan] plaintiff to enter into the letter agreement, upon the immediately present event of default, Barclays could pursue [McMillan] for hundreds of thousands of dollars while having no obligation to fund [McMillan’s] capital contribution,” the claim alleges.
In his suit, McMillan claims he did not agree to the loan from Barclays or put the $540,000 into Dewey as capital, instead contributing the amount when leaving the firm in 2010 by having the amount deducted from profits he claims were owed to him.
McMillan originally left legacy LeBoeuf Lamb Greene & MacRae in 1993 to join Gold Farrell & Marks (now SNR Denton) and returned to LeBoeuf Lamb in 2007, just before its merger with Dewey Ballantine. He left again three years later.
He claims that Dewey CFO Joel Sanders asked him on joining to contribute $540,000 in capital, or roughly 36 per cent of his annual target compensation. Sanders and the firm’s management, who are not named as defendants, presented the Barclays loan in positive terms, he claims.
He alleges that the firm paid him $810,000 less than promised in 2008 and $959,583.33 less in 2009.
However, he alleges that Sanders emailed him in 2010, when McMillan was in the process of leaving the firm, saying he was only owed $823,708.31 in compensation and that $540,000 was to be deducted from this. Sanders also stated in the email on 22 June 2010 that the deduction was because McMillan did not process the loan documents, according to McMillan’s complaint.
However, McMillan claims that Barclays stated he had entered into the loan agreement on 24 June in the same year, two days after Sanders’ email stating that the documents had not been processed.
McMillan is being advised by partners Jeffrey Schreiber and Kevin Fritz at Meister Seelig & Fein in New York.
Barclays and Citibank had both been pursuing ex-Dewey partners for capital loans (25 June 2012), while in a previous case Houston energy partner Steven Otillar claimed that Citibank had colluded with Dewey leaders to entice lateral hires before the firm’s collapse (4 September 2012).