[ by Melanie Gretchen ]

The affable cooperation seen following the bankruptcy filing is descending into belligerence and finger-pointing as the firm winds down.

A former Dewey & LeBoeuf partner is suing Citibank, alleging the bank knew about the New York law firm's financial difficulties even before the firm filed for bankruptcy in May 2012.  Steven Otillar filed a claim in federal district court in New York on Tuesday, after he and his wife were sued by the bank, that accused the couple of defaulting on a $209,000 loan to fund his stake in Dewey.

Federal Findings and Allegations. In his 29-page counterclaim, Mr. Otillar's, represented by Helen Davis Chaitman, details how Citibank knew about Dewey's financial difficulties as early as 2010.  Referring to internal documents, Citi's records show:

• the bank was aware that Dewey had misreported its 2010 financial information to the legal magazine, American Lawyer.
• Dewey's actual revenue for 2010 was $759 million, significantly below the $910 million reported for the the American Lawyer annual survey.
• Dewey's revenue per partner was actually $707,000, and not $870,000 as reported to American Lawyer

Mr. Otillar points out that, because of this uneven playing field - where people like him operated in the dark as far as Dewey's financial issues mattered - while others factored those numbers into their business dealings, as applicable.   Mr. Otillar says unequivocally that he and others would never have joined Dewey (in his case from Baker & Mackenzie.

By failing to disclose such information, Citibank breached its fiduciary duty to disclose the information to him when it issued its loan in September 2011.  As such, Mr. Otillar no longer is obligated to repay Citibanj for the loan, and he also is seeking punitive damages as determined in a trial by jury.  Judge Louis Stanton will rule on the motions 

In response to the complaint, Citibank said said it had no obligation to divulge details about Dewey's financial state at the time of the loan, and that Mr. Otillar "offers only his speculation that because Citibank was Dewey's longtime lender, it must have had information that was unknown and unavailable to Otillar."

For further details, go to [Reuters, 2/27/13].