Dewey & LeBoeuf’s senior management is working on a major restructuring of the embattled US firm that could see it prepare the business for a takeover or shut down its international network.
Partners in the firm’s bankruptcy and restructuring practice are considering a number of solutions in an attempt to save the troubled firm, which has been hit by more than 65 partner exits since the start of 2012.
Options on the table are understood to include offices closures, a takeover or a merger, with the most likely solution a scaling down to a US corporate boutique followed by a possible takeover by another firm.
The firm has one of the leading bankruptcy and restructuring practices in the US, with New York-based business solutions and governance head Martin Bienenstock and Los Angeles managing partner Bruce Bennett among the country’s top rainmakers in the area.
The duo are leading the restructuring process, raising hopes among partners that the firm will pull through the current crisis, with a final decision on the outcome expected in a matter of weeks.
A partner said: “The game isn’t over. They’re working hard to try and sort things. There’s a chance we might turn it around. We’ve got lots of options. [Bienenstock’s] a restructuring expert. These guys are working hard. There’s a possible happy outcome.”
Commenting on a merger or takeover, the partner added: “These are among the possibilities – we have to look at the options.”
Another partner said management was likely to cut the firm down to a smaller corporate specialist focused on the highly profitable New York, Washington DC and West Coast markets, before potentially selling the firm off.
“[Bienenstock’s] trying to get the firm taken over but to do that you obviously need to eliminate a big chunk of the debt.”
The firm has had large amounts of debt since the ill-fated merger of Dewey Ballantine and LeBoeuf Lamb Greene & MacRae in 2007, with the firm later taking sizeable loans from Citibank and other lenders.
The partner added: “I don’t think the firm is looking for bankruptcy. [They may] shut down the international network. Russia’s a very profitable office but if you end up with a very small [firm], does it really matter for you to have a Moscow office?”
Latham & Watkins restructuring partner Peter Gilhuly confirmed that he was “not involved in advising Dewey & LeBoeuf at all”, quashing speculation that the firm had instructed the Los Angeles lawyer as bankruptcy counsel. Gilhuly has advised on a number of high-profile law firm insolvencies, including acting for extinct firm Howrey during its wind-down last year.
Dewey’s offices outside the US are the source of widespread speculation, with Italian partners wanting to exit the US LLP to safeguard their future if the firm is wound down (19 April 2012).
Its offices in France, Italy, Russia and Poland are widely thought to be close to exits, with Moscow partners in talks with a number of US firms.
The partner exodus has so far been focused on London and the US, with the most recent City departures including highly regarded capital markets duo Camille Abousleiman and Louise Roman Bernstein (16 April 2012). The firm’s global life sciences chair and technology and IP transactions head Stanton Lovenwort has also left, joining O’Melveny & Myers in New York as a counsel.
For more, see feature.