Dewey and LaBoeuf Rejects Leases, but What Will Become of its Art?

June 28, 2012

 

As fallen law firmcLLP considers measures to satisfy creditors in the wake of recently filing for bankruptcy, the question presents itself: what will happen to the firm’s “stuff”–namely, the firm’s collection of art? The firm’s restructuring officer explained: “With the exception of a sublease in the Debtor’s former New York City offices (currently being utilized for wind down purposes), the Debtor no longer has a continuing use for the Leases associated with those offices. Additionally, except for certain Artwork in its Houston, Texas, and Los Angeles, California offices, the Debtor no longer requires the Non-Essential Owned Property contained in its Closed Offices.”

One measure the firm has taken is attempting to reject its leases for its offices. Dewey wants to reject leases at least 14 U.S. properties, including the one covering the executive floor of its Manhattan headquarters at 1301 Avenue of the Americas, as well as leases for offices in London, Beijing, and Sao Paulo. According to a motion filed in bankruptcy court on Wednesday afternoon, the firm explained that keeping the leases will not benefit the estate and “is not necessary in the wind down of operations.” The law permits such lease rejections, but court approval is required. 

Less certain is what will happen to the firm’s collections of art at these locations worldwide. Recently, Above the Law reported that, “Dewey is quietly removing the art from the walls. Perhaps it belongs to the creditors?” There are varying opinions on what will become of the artwork. Since the artwork ostensibly belongs to the firm, creditors should be able to reach the firm’s pieces in the event of bankruptcy. However, not all firms keep strict records of its acquisitions and artworks that were received as client gifts and through other less traditional means may be difficult to track down. As the defunct firm scrambles to pay off its debts, it is unclear whether the artwork that used to adorn its walls will remain in the firm’s possession or serve to pay off bills.

Sources: Dewey Docket: Dump the Leases, Keep the Art, “Take My Firm, But Leave the Art”: Bankrupt Law Firm Tries to Retain Artwork