An ex-partner of Dewey & LeBoeuf LLP has accused the former leaders of the bankrupt law firm, once one of New York's largest, of running a "Ponzi scheme" that used money invested by new partners to enrich themselves and others, the Wall Street Journal reported today. In a lawsuit, former partner Henry Bunsow, a litigator who joined the firm's San Francisco office in 2011, alleges that former chairman Steven Davis and other leaders of the firm misrepresented Dewey's troubled finances to get him and other "successful partners" to join the firm, and then used the capital they invested—$1.8 million in Bunsow's case—to pay themselves and other partners. Dewey filed a bankruptcy petition May 28, after most of its roughly 300 partners had left and lenders balked at extending credit the firm needed to keep functioning. The firm owes more than $315 million to a wide-ranging group of creditors that includes banks, bondholders, landlords and vendors such as car services and staffing agencies.
