Dewey Removes Steve Davis, Banks Hint Loan Extensions for another 90-120 Days

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Whether Steven Davis, the former Chairman of Dewey & LeBoeuf is a fall guy or not remains to be seen, but as of today, he has been voted out of all positions including his seat on the five-member management committee. Industry sources have reported that the bank syndicate may be extending Dewey’s loan for another 90-120 days instead of the previous one-week promised respite.

At the same time comes news that Greenberg Traurig has clarified it has no intention of merging with Dewey. In an internal memo in reference to the Greenberg Traurig deal, the Dewey management said, “We are in discussions with other firms about a possible transaction and will consider those and other options for the firm moving forward.” The Dewey management also clarified in its internal memo that the decision to remove Davis was neither related to the end of talks with Greenberg Traurig, nor related the district attorney’s probe on alleged financial misconduct by Davis.

In an email to partners on Sunday, Davis said he had tried his best to pull the firm through “challenging and turbulent times.” He also said, “My decisions as chairman were made in good faith and in the firm’s best interests … I trust as this process continues, a dispassionate and disinterested review of the facts will confirm that I have not engaged in any misconduct.”

  

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The move happens two days after a group of Dewey attorneys moved the District Attorney’s office to look into “financial irregularities” at the firm committed during Davis’s term as chairman.

Already 77 partners have left Dewey out of its base of 300 partners, all within this year. However, sources close to the firm said that the shake-up was yielding results and the Monday deadline on $75 million owed to the bank syndicate by Dewey may not end in immediate bankruptcy.

With the deal failing to happen with Greenberg Traurig, the lenders, who had previously offered only a single-week extension, have acceded that the time would be too short for Dewey to work out of the situation. The banks are supposed to have offered a term sheet for the extension.

In a separate statement Greenberg Traurig closed the chapter on Sunday. GT CEO Richard Resenbaum said in the statement, “Dewey is a firm we hold in high regard with many fine lawyers, though we never considered a merger.”