Legal Business Blogs

Dewey latest: Partners off the hook for lease payments

In a ruling relieving hundreds of ex-Dewey partners of millions of dollars in liability, a New York state judge has ruled against a former landlord of Dewey & LeBoeuf, which took action over unpaid rent.

In 2013, the landlord, 1301 Properties Owner, sued 426 former Dewey partners for $220m claiming the partners were personally liable for Dewey’s rent payments. While actions against some former partners were discontinued, a suit against 377 partners came before Justice Saliann Scarpulla. The lease for the office in New York had been signed back in 1989 by Dewey successor Dewey Ballantine Bushby.

In a ruling handed down yesterday (4 April) the judge ruled New York Partnership Law protected the partners from personal liability for the payments.

The decision said: ‘I find that the lease is not enforceable to hold the individual partners of Dewey Ballantine LLP and Dewey & LeBoeuf LLP personally liable for the lease due to the contracting parties’ failure to comply with Partnership Law.’

The New York partnership law Scarpulla referred to stipulates that partners in an LLP must take a majority vote to make themselves personally liable for lease obligations – something that the Dewey partners said didn’t happen.

She added: ‘The individual partners of an LLP have a legitimate expectation that they are protected from personal liability, unless they agree to the contrary through a majority agreement among the partners.’

Meanwhile, pending court action in the Dewey saga includes three minor charges against former Dewey & LeBoeuf executive director Stephen DiCarmine and former firm chief finance officer Joel Sanders to go to trial in September.

In February this year a New York judge dismissed charges of grand larceny against the pair, who were alleged alongside former chairman Steven Davis to have intentionally inflated revenue at the firm.