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Former partners of Weil Gotshal have hired legal counsel to represent them in the law firm’s impending liquidation, amid a rush by current and former practitioners to recoup some of the value of their stakes in the business.
A group of about 10 former partners, including lawyers who left the firm in the past five years but none who left the firm during the wave of departures in recent months, are working with Peter Wang, a trial lawyer at Foley & Lardner, according to people familiar with the matter.
Wang previously represented more than 100 lawyers in the 2012 bankruptcy of Dewey LeBoeuf, a major New York-based business firm that succumbed to heavy debt.
Wang contacted Weil’s outside counsel at Davis Polk & Wardwell in recent days.
The move is an early indication of the legal battles likely to arise from the demise of Weil, who announced last Wednesday that he would pursue “an orderly cessation” of his operations after his management determined there weren’t enough revenue-generating attorneys remaining following a series of defections.
Law firms are generally owned by their partners – the senior practitioners who run the businesses and share in their profits.
Partners who own equity in Weil — including some retired or deceased attorneys who have not yet been fully reimbursed for their stakes — would expect payments only if the remaining amounts collected from clients exceed those owed by the firm under its office leases and to its vendors. The partners’ total equity, worth tens or hundreds of millions of dollars, could be at risk of being wiped out in liquidation.
Separately, several current and former lawyers told the FT they were frustrated with Weil’s longtime executive partner Barry Wolf and wanted to investigate how the Wall Street firm was managed in its final months. They said a breach of fiduciary duty lawsuit against Weil’s board remained a possibility.
“The knives are out,” one of Weil’s lawyers said. “Real dollars are on the line and there is a complete lack of trust. »
The FT previously reported that Weil was appointing a “liquidation” committee made up of some of Weil’s remaining lawyers, likely including Wolf, as well as external restructuring experts. The company also hired consulting firm AlixPartners to work with its in-house financial team to manage Weil’s books during the shutdown period.
Weil has not yet taken a formal vote by the partners to approve the liquidation.
Weil, Wolf and Wang did not respond to requests for comment.
Gn bussni
