UPDATE, 6/13/2012, 7 p.m. EDT: The sixth paragraph of this story has been updated to include a statement from Jeffrey Kessler.
In a bombshell lawsuit filed Tuesday in California state court, former Dewey & LeBoeuf partner Henry Bunsow is accusing multiple Dewey leadersincluding longtime chairman Steven Davisof committing fraud by lying about the true state of the now-bankrupt firm’s finances.
The 14-page lawsuit [PDF], filed in San Francisco Superior Court, claims that Davis and other former Dewey leaders engaged in a years-long pattern of deceit aimed at portraying the firm as stronger fiscally than it actually was in order to pursue a lateral hiring spree that the complaint likens to “running a Ponzi scheme.”
The suit comes less than a month after Dewey filed for Chapter 11 bankruptcy protection following a wave of partner defections and amid mounting questions about its financial condition.
Reached Wednesday, Bunsow, a patent litigator who now runs a San Francisco IP boutique with 10 other Dewey refugees, declined to comment. He is being represented by San Francisco law firm Lynch Gilardi & Grummer. His suit appears to be the first filed by a former Dewey partner accusing firm leaders of fraud. Separately, the Manhattan district attorney’s office launched a criminal investigation in late April into Davis’s stewardship of the firm. A spokeswoman for the district attorney’s office declined to comment on the status of the probe Wednesday. Davis has denied any wrongdoing.
Along with Davis, the other defendants named by Bunsow include former Dewey partner Jeffrey Kessler, a member of the firm’s office of the chairman in its final months; former executive committee member James Woods; former chief financial officer Joel Sanders; and former executive director Stephen DiCarmine. The suit seeks unspecified damages for claims including fraud and deceit, negligent misrepresentation, breach of fiduciary duties, and unjust enrichment.
