Ailing U.S. law firm Dewey & LeBoeuf is considering a bankruptcy filing as new debtholders take a more aggressive track, shifting away from earlier attempts at an out-of-court liquidation, Reuters reported on Friday. The majority of Dewey's partners have quit as a result of concerns about compensation, and $225 million in bank loans and bond debt. Buyers of distressed debt who have acquired Dewey's debt at a discount on the secondary market are more open to seeing the firm wound down in bankruptcy court rather than out of it. With the emergence of new creditors, Dewey on Tuesday replaced restructuring adviser Development Specialists Inc. (DSI) with competitor Zolfo Cooper. Joff Mitchell, a senior managing director at Zolfo, is now Dewey's chief restructuring officer. Bill Brandt, chief executive of DSI, confirmed that his firm's involvement in the matter was coming to an end. "Our firm is transitioning out," Brandt said. "We've been replaced by Zolfo at the insistence of the debt holders. It now becomes a creditor-driven case."
