All hell is breaking loose around the carcass of extinct US firm Dewey & LeBoeuf, with a former partner now alleging what was previously unsayable: that Dewey’s management designed a Ponzi scheme to enrich themselves, lying about the financial black hole the firm was facing.
The allegations come in a shocking lawsuit brought by ex-Dewey IP partner Henry Bunsow, who claims in a filing that some 200 defendants including ex-chairman Steve Davis “concocted and participated in a scheme and conspiracy intended to misrepresent the financial performance of Dewey”. He claims they engaged in “grand theft, grand larceny, false pretences and embezzlement” and concealed the true state of the business when persuading him to join on a $5m (£3.2m) guarantee from - coincidentally - extinct firm Howrey.
If nothing, we’re loving the use of a thesaurus: Bunsow claims the “acts” carried towards him were done “in a despicable, deliberate, cold, callous and intential manner”. He is demanding broad-ranging damages.
He claims a review by PricewaterhouseCoopers of the firm’s compensation distributions revealed the firm had not been making distrbutions in accordance with its partnership agreement “for many years and certainly not in 2011”. He also claims it was reported that 83 per cent of firms profits had been used by defendants for “fraudulent and improper payments to themselves and other privileged partners”, leaving others without a source of distributions.
Elsewhere, tensions are high in Dubai, where three ex-partners are fighting over unpaid dues, with former Dewey litigator Peter Gray instructing a solicitor and a barrister in London for advice. Meanwhile in Germany, Ashurst has picked up a duo of Dewey refugees.
Allegations are just that - allegations - but as the Dewey wreckage sinks underwater, tempers are starting to fray even more. You haven’t heard the last of this.
Separately, take note if you have reason to believe your firm is one of the 200 largest by revenue in the UK, because today’s the day that the questionnaires for The Lawyer’s epic annual UK200 research project go out. If you haven’t received it, let us know pronto by emailing email@example.com.