Elite New York law firm Dewey & LeBoeuf has hired a prominent bankruptcy attorney as it struggles with high debt and partner defections, according to two attorneys at other law firms who have knowledge of the matter.
Albert Togut , who has represented several major companies in Chapter 11 bankruptcy, is working with at least one member of the firm’s new management team, one of the sources said.
Togut did not respond to several messages seeking comment. A spokesman for Dewey, Angelo Kakolyris, declined to comment, saying, “The firm does not comment on speculation.”
The 950-lawyer firm, one of the biggest in the United States, has lost some 70 partners, or 23 percent of them, since the start of the year as it negotiates with creditors.
The hiring of Togut does not necessarily mean Dewey is planning a bankruptcy filing. For example, the firm could be looking for legal help to renegotiate its debt.
One partner who recently left Dewey said the firm could be preparing for a so-called prepackaged bankruptcy, possibly involving a merger with another law firm. Under this scenario, Dewey would negotiate with creditors and prepare for a merger prior to filing for bankruptcy, a process that would enable Dewey to reorganize and emerge from bankruptcy quickly.
Togut has served as counsel to General Motors, Chrysler Automotive and Ambac Financial in their Chapter 11 bankruptcies. He also served as trustee in the 1988 bankruptcy of law firm Finley, Kumble.
Togut was tapped by Martin Bienenstock , himself a high-powered bankruptcy lawyer who last month was appointed to Dewey’s new five-person office of the chairman, a source said.
It is unclear when Togut was hired. Neither Bienenstock nor Richard Shutran, members of Dewey’s office of the chairman, responded to requests seeking comment.
Dewey is in the process of negotiating with its lenders, including JPMorgan Chase and Citigroup. A spokeswoman for Citi Private Bank referred all inquiries to JPMorgan, which Citi identified as Dewey ‘s primary lender. JPMorgan declined comment.
Firm leaders said earlier this week that the vast majority of the recent departures were part of its plan to reduce its partner ranks to improve profitability.
Last year, Dewey hired a number of high-profile, highly compensated attorneys. It has been unable to pay many of its longer-term partners full compensation in recent months, according to two partners who have left. Dewey is saddled with large debt, including about a $125 million bond, a rare liability for a law firm.
Dewey was created by a merger in 2007 between 250-attorney Dewey Ballantine and 700-attorney LeBoeuf , Lamb, Greene & McRae. At its height in 2008, it had 1,450 attorneys, according to The National Law Journal.
One of Dewey’s original partners was Thomas Dewey, former New York governor and Republican candidate for president in 1944 and 1948.