It was the biggest law firm collapse of all time but the fallout from Dewey & LeBoeuf’s insolvency is only set to intensify.
Barclays’ attempt to avoid a full trial over its relationship with the firm was defeated at the High Court in February. Now the bank will have to face the former partners who say they were induced to take out individual loans in order to bail out the failing firm.
It is not the only battle being waged between the firm’s bank and its former partners, who argue that Barclays and the firm “intentionally failed to disclose” Dewey’s indebtedness to make them take out loans.
Former partner Londell McMillan, who is also defending a claim in the UK brought by the bank, has issued a claim in the US for fraud against Barclays.
These mammoth cases should expose exactly what Barclays knew about the state of Dewey and the real intentions behind the loans issued to partners. It will also decide whether or not those partners should pay back the debts.
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