Barclays and Citibank are understood to be considering action against former partners of bankrupt New York law firm Dewey & LeBoeuf who took out loans to fulfil capital contribution obligations, with the latter bank having launched proceedings against at least one lawyer to claim its money back.
According to a report on the Am Law Daily web site, Dewey partners had been given until the end of the calendar year in which they joined the firm to contribute 36 per cent of their target compensation as a capital contribution.

Middle man

Dewey established loan schemes -- first with Barclays and then with Citibank -- to assist partners in fulfilling their capital obligations quickly, with Dewey acting as a middle-man in the granting of the loan and, in some cases, paying the interest.
The former partners are now obliged to pay back all loans, with interest, with some reporting that they have received statements suggesting unfavourable terms.
The only legal action taken so far was against Steven Otillar, an oil and gas lawyer now with Washington DC-based Akin Gump, with Citi filing a summons in New York state court at the end of last month seeking repayment of roughly $209,670.