In the ongoing trial against three former Dewey & LeBoeuf LLP leaders, it’s been hard to tell at times who, exactly, is being labeled as the victim, according to a Wall Street Journal Bankruptcy Beat blog post yesterday. As the Manhattan district attorney’s office pointed out in its 2014 indictment against three ex-law firm leaders, Dewey’s collapse “forced thousands of people out of jobs and left creditors holding the bag on hundreds of millions of dollars owed to them.” The firm’s May 2012 bankruptcy hurt Dewey’s former employees and lawyers, including retirees who were suddenly faced with declining prospects for their future income. Dewey’s partners were asked to contribute large sums of money through the bankruptcy to pay creditors, even though many felt the firm actually owed them money. But the alleged crimes the D.A. says Dewey’s former chairman, Steven Davis, ex-chief financial officer, Joel Sanders, and former executive director, Stephen DiCarmine, committed aren’t really about what led the firm to collapse. Instead, prosecutors allege the three conspired to hide the true nature of the firm’s precarious financial condition from its banks and auditors, which led the banks to continue lending Dewey money and convinced a group of insurance companies to buy into a 2010 bond offering floated by the firm. All three deny wrongdoing.
