The recent woes of Dewey & LeBoeuf in the U.S. have not cast a pall on its Hong Kong operations, according to the firm. Despite the firm’s reported merger talks with rival firm, Greenberg Traurig, and rumours of it adopting a novel rescue plan after hiring bankruptcy counsel, business remains as usual in Hong Kong, says Dewey's Hong Kong managing partner.
“The Hong Kong team is to a large extent unaffected by developments elsewhere in the network, since the vast majority of work for existing clients and also new client generation is originated locally,” said Heng Loong Cheong to ALB. "The Hong Kong office is cash generative and continues to be instructed by new clients, as well as existing clients on new matters.”
Reuters reported that the 950-lawyer firm, which is one of the biggest in the U.S., has lost some 70 partners, or 23 percent of them, since the start of the year as it negotiates with creditors. The firm’s London and Dubai offices have been the hardest hit, with more teams and individuals in its Europe-based offices considering leaving, according to media reports.
Commenting on personnel at the firm’s Hong Kong office, Cheong said: “We have a small, efficient and busy legal team and support staff in Hong Kong and do not envisage that any personnel related decisions will be required.”
Dewey has retained bankruptcy lawyer Albert Togut, who has represented companies such as General Motors, Chrysler Automotive and Ambac Financial in their Chapter 11 bankruptcies, reported Reuters on April 20. However, his hiring does not necessarily mean Dewey is planning a bankruptcy filing. For example, the firm could be looking for legal help to renegotiate its debt. Dewey is saddled with large debts, including a roughly $125 million bond.
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 reorganise and emerge from bankruptcy quickly.
U.S. Law firm Greenberg Traurig told Reuters it has had "preliminary discussions" about hiring lawyers from the embattled firm, which is struggling amid high debt and a raft of partner defections.
Greenberg said in a statement it has had talks "relating to" Dewey lawyers, but has made "no commitments" and has "not reached agreements" about whether to hire those lawyers. ALB
Candice Mak is North Asia Editor at ALB. Follow her on Twitter: @CandiceMak_ALB