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Large New York law firm files for bankruptcy and owes millions

 

Recently, New York law firm Dewey & LeBoeuf declared bankruptcy. On May 31st, 2012 the New York Law Journal printed a front-page story on the Chapter 11 bankruptcy.

One of the major reasons Dewey & LeBoeuf was forced into bankruptcy was the compensation packages it offered. Not only did it pay its attorneys well, but also in its efforts to grow, it offered compensation guarantees to lateral and legacy hires. The firm recently offered 100 contracts with compensation guarantees.

There are many secured creditors that have collateral against Dewey & LeBoeuf. For example, the firm sold $150 million in bonds in 2010 when compensation expenses rose more than revenue.

This firm also has unpaid bills to creditors, including Bank of America. Additionally, Dewey & LeBoeuf owe Thomson Reuters over $2.36 million for library services.

On the other hand, the firm has $13 million in cash and $255 million of outstanding accounts receivable (and artwork of unspecified value). Usually, the firm collects 95% of its accounts receivable, but, given that it is filing for bankruptcy, this law office may end up collecting less than 95% of its outstanding accounts receivable.

If you are having trouble paying your bills or are in debt, give us a call at (800) 660-5299 to set up a free consultation. We are experts in bankruptcy law. With nearly 30 years of experience, we are well equipped to help you with your legal needs. Visit us on the web: www.BankruptcyNYC.com.

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