Ex-Dewey Partner Challenges Bank on Repayment of Loan He Disputes

, The Am Law Daily

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Loan programs orchestrated by Dewey & LeBoeuf to help incoming partners cover capital contributions are sparking more litigation, with a former Dewey partner claiming in a lawsuit filed in the Southern District on Feb. 19 that Barclays Bank and the now-defunct firm entered into a $540,000 loan agreement in his name without his permission (See Complaint).

Entertainment lawyer L. Londell McMillan says in the suit that he initiated the action after being contacted in December by Barclays, which demanded repayment of money he says he never borrowed. McMillan claims his suit is designed "to challenge a fraudulent scheme orchestrated and arranged" by Barclays and Dewey management. Dewey is not named as a defendant.

At different times in the firm's history, Dewey leaders worked with Barclays and Citi Private Bank to arrange capital loans at little or no interest for new partners.

A Barclays spokesman declined to comment.

McMillan began his career at Dewey's predecessor, LeBoeuf, Lamb, Greene & MacRae, in 1990, leaving three years later for an entertainment boutique and then founding his own firm in 1996. McMillan says he rejoined LeBoeuf Lamb in May 2007, a few months ahead of its merger with Dewey Ballantine, to head a newly launched media, entertainment and sports division. In agreeing to return, McMillan says he executed a written contract that guaranteed him $1.5 million in compensation per year over the next three years.

Around the same time, he claims, Dewey's CFO, Joel Sanders, asked McMillan to contribute $540,000 in capital—approximately 36 percent of the annual compensation he had been promised—to the partnership. According to the suit, firm leaders presented the Barclays loan program to him as an easy way to meet the obligation, but McMillan maintains he "declined to enroll in the Barclays Program" and never paid his capital. (The suit does not elaborate on the reasons behind his failure to pay.)

Over the next several years, McMillan states in the complaint, Dewey failed to keep its promises to him, paying him $810,000 less than he was owed in 2008 and shortchanging him by $960,000 in 2009.

According to the suit, in March 2010, McMillan told former Dewey executive director Stephen DiCarmine, litigation chair Jeffrey Kessler and an unnamed member of the firm's executive committee that he planned to withdraw from the partnership after winding down his work for the firm. McMillan claims Sanders emailed him three months later, on June 22, 2010, with an accounting of how much the firm believed it owed him for the period from 2008 through 2010.

In the email, McMillan states, Sanders pegged that amount at $824,000, and noted that because McMillan had never made a capital contribution, that sum would be deducted from the balance he was owed.

"Your capital has already been deducted and processed as it was way overdue and you never processed the loan documents," Sanders allegedly wrote at the time.

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