Law firm Dewey dumps executive; talks with rival end

Sun Apr 29, 2012 10:12pm EDT
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By Nick Brown and Nate Raymond

NEW YORK (Reuters) - Embattled law firm Dewey & LeBoeuf said on Sunday it removed its former chairman from various leadership positions amid a probe by the Manhattan district attorney and said that talks with rival firm Greenberg Traurig about a potential transaction ended with no deal.

According to an internal firm memo obtained by Reuters, Dewey's executive committee voted to oust Steven Davis from its ranks and remove him from a five-member management team put in place during a leadership shakeup last month. The firm's management also disclosed that talks with Greenberg Traurig had ended.

"We are in discussions with other firms about a possible transaction and will consider those and other options for the firm moving forward," the memo said.

Dewey, saddled by high debt, has been considering filing bankruptcy as a vehicle to merge with or be acquired by one or more firms.

A person close to the firm told Reuters before news of Davis's ouster, that Dewey was close to securing a 90- to 120-day extension of roughly $75 million in loan debt due on Monday, providing a temporary reprieve on a default that could trigger a bankruptcy.

But it was unclear whether the extension discussions hinged on a transaction and where the discussions stood in the wake of the Greenberg talks falling through.

In the internal memo, Dewey's management said the decision to remove Davis from his leadership position was unrelated to the end of talks with Greenberg Traurig. It also said the move should not be read as a judgment on the merits of the district attorney's probe.

"The executive committee felt it was in the best interests of the firm to take this action," the memo said.   Continued...

A woman walks by the Dewey & LeBoeuf LLP headquarters on 6th avenue in New York April 20, 2012. REUTERS/Shannon Stapleton