With only a two-week extension of its $75 million direct loan from a bank syndicate, law firm Dewey & LeBoeuf is destined to close. Considering the developments this year as well as those within the last couple of weeks anything else short of a miracle cannot save the firm from bankruptcy. However, even the last days of Dewey keeps proving how blunt the management is in actuality. With only about 14 days in hand, the management has suddenly woken up and sent a mail to its U.S. employees warning of mass layoffs and mentioning that the letter is to be considered as a conditional notice under the WARN Act.
Still failing to confirm closure, Dewey management told its employees on Friday, “Although we continue to pursue various avenues, it is possible that adverse developments could ultimately result in the closure of the firm, which would result in the termination of your employment.”
The Dewey management mentioned in the notice, “Accordingly, in order to give you as much advance notice as possible, and to comply with any legal obligations that we may have, this letter will serve as conditional advance notice under the Federal Worker Adjustment Retraining and Notification Act.”
The situation is still curious, since under the WARN Act the firm needs to provide at least 60-days notice and in New York the WARN Act requires 90 days notice before terminating employment. While the bank syndicate is heard to have provided only a two-week extension to the loan, it is difficult to see how the firm can run another 90 days from final notices of termination required under WARN Act requirements.
At least 120 of 300 partners have already left. The former chair of Dewey, Morton Pierce has already left. The firm has a $75 million direct debt to banks and more than $125 million debt to investors. The overseas offices of Dewey including those in Britain, Germany, Kazkhstan, UAE and Russia are already in shambles with key partners leaving to join other law firms.
