Following Monday’s revelation that failing New York law firm Dewey & LeBoeuf’s management team sent a memo to all of its partners suggesting they seek other employment, things have continued to head south.
The Wall Street Journal reported yesterday that merger talks between Dewey and law firm SNR Denton collapsed after nine days of intensive negotiation. The discussions deteriorated after news broke last weekend that former firm chairman Steven Davis was relieved of his duties amid questions surrounding his conduct and a Manhattan district attorney’s office probe.
SNR Denton reportedly had suggested a full merger in which it would have assumed the more than 1,000 remaining Dewey attorneys. However, the deal was dependent upon the merged firm’s ability to secure hundreds of millions of dollars in financing, which the new entity would have repaid over a period of five years.
A few days earlier, Dewey severed merger discussions with law firm Greenberg Traurig. According to an internal memo, Dewey’s executive committee team said its decision to oust Davis was neither related to the cessation of talks with Greenberg Traurig nor the prosecutors’ investigation.
The Journal reported that after this latest setback, Dewey is continuing to negotiate with SNR Denton and other firms. Additionally, SNR Denton is continuing talks with some of Dewey’s lawyers and practice groups in an effort to lure them to greener pastures.
As for next steps, Dewey is reportedly considering filing for bankruptcy as a means to merge with or be acquired by another law firm, although Martin Bienenstock, head of the firm's restructuring practice and a member of the its four-person office of the chairman, said that bankruptcy is a last resort and not currently planned.
“We are in discussions with other firms about a possible transaction and will consider those and other options for the firm moving forward,” Dewey’s management team wrote in a memo last weekend.
The Journal also reported that Dewey had talks with Washington, D.C.-based Patton Boggs about a potential merger.
For more on the failed SNR Denton merger, read the Journal.
And for more on Dewey’s downfall, read:
Dewey encourages partners to jump ship
N.Y. prosecutors probe Dewey & LeBoeuf, firm cuts ties with executive
Dewey & LeBoeuf plans to sublease executive floor
Dewey & LeBoeuf hires bankruptcy counsel
12 Dewey & LeBoeuf partners defect to Willkie Farr
Dewey & LeBoeuf overhauls management team amid more defections
