Former Dewey & LeBoeuf finance director Francis Canellas, a key witness in the long-running criminal case over the firm's collapse, told a New York jury yesterday that the now-defunct firm failed to tell lenders about its struggles to pay vendors and partners in the years before its 2012 bankruptcy, the New York Law Journal reported today. On the third day of direct questioning by Manhattan assistant district attorney Peirce Moser, Canellas returned to many of the same themes explored in his earlier testimony in a retrial against former Dewey CFO Joel Sanders and former executive director Stephen DiCarmine. Prosecutors accuse Sanders and DiCarmine of scheming to mislead the firm's lenders and investors about its finances. The retrial, which started in February, comes after the district attorney's initial case against Dewey's former executives ended in a mistrial in 2015. Canellas, a cooperating witness in the government's case, on Monday discussed Dewey's financial woes in 2009 and 2010, and the impact they had on the firm's finance department. He described a firm that had trouble paying its bills on time and was often unable to make payments that had been promised to partners or former partners at the firm. Canellas said that neither he nor anyone else at the firm told Dewey's lenders about those troubles, including during an early 2010 negotiation to refinance the firm's debt.
