Three former executives at Dewey & LeBoeuf are facing yet another lawsuit, this one courtesy of a life insurer that bought $35 million in bond notes from the now-defunct firm.

Aviva Life and Annuity Company accuses the firm’s former chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders of hiding the firm’s financial woes from investors, employees and the public in the years before Dewey’s collapse.

The insurer entered the picture in 2010, when it bought $35 million in private bonds from the firm as part of a $150 million note issuance designed to help Dewey refinance its debt. At the time, Aviva claims, Dewey presented potential investors with materials advertising the firm’s “strong financial condition and conservative debt profile,” even though its leaders knew of financial problems, Thomson Reuters reports.

Dewey reportedly told Aviva that it would default on the notes shortly before its May collapse, prompting the latter to sell the bonds at a “significant loss.” The insurer is seeking unspecified damages.

The executives, meanwhile, continue to deny any wrongdoing in the Aviva case or in the firm’s downfall. “Aviva was a sophisticated investor who conducted its own due diligence but, rather than accept responsibility for its own investment decisions, now looks for someone else to blame,” Kevin van Hart, an attorney for Davis told the Wall Street Journal.

The trio is also facing claims from the firm’s unsecured creditors, who told a federal bankruptcy court last month that Davis DiCarmine and Sanders “breached their fiduciary duties of care, loyalty and candor by recklessly doling out individual partner contracts that guaranteed compensation without regard to future performance.”

For more InsideCounsel coverage of Dewey, see:

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