By Casey Sullivan
Sept 14 (Reuters)(Corrected) - Citibank is fighting claims
the bank "fraudulently induced" former Dewey & LeBoeuf partners
into signing up for a loan program that financed their capital
in the failed law firm, despite knowing of Dewey's dire
Former Dewey partner Steven Otillar made the claims in New
York federal court last month in response to a Citibank lawsuit
against him for defaulting on a $209,000 loan that financed his
capital in the now defunct firm.
Citibank sued Otillar, who is now a partner at Akin Gump
Strauss Hauer & Feld, in May for defaulting on the loan.
Otillar filed an opposing motion, after Citibank asked a
judge to grant summary judgment, claiming Citibank had a duty to
disclose its alleged knowledge of Dewey's true financial
condition to Otillar and other partners who received loans from
But Citibank fired back in a motion filed Wednesday, saying
Otillar had failed to provide any factual basis for his claims
that Citibank hid Dewey's financial condition from the partners.
"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," Citibank said in its
Citibank argued that, even if the bank had knowledge of the
firm's true financial condition, it had no fiduciary duty to
disclose confidential information it had obtained from Dewey to
The bank said it was incumbent upon Otillar to look into the
financial stability of Dewey upon joining the firm in 2011.
"Having failed to ensure that the firm's finances were in
order, Otillar can not now be heard to complain that he was
defrauded by Citibank for failing to disclose the firm's
allegedly deteriorating financial condition," the bank said.
Otillar's lawyer, Helen Davis Chaitman, said in an email
Friday she was "confident that Citibank's internal documents
will prove our contentions."
Michael Luskin, a lawyer for Citibank, did not immediately
respond to a request for comment. Neither did Otillar or a
Citibank spokeswoman. A representative for Dewey's estate did
not immediately return a request for comment.
Dewey once employed more than 1,000 lawyers in 26 offices
worldwide, but in May it became the largest U.S. law firm to
file for bankruptcy. Its demise has largely been attributed to
compensation guarantees the firm made to a significant portion
of its partners.
Otillar is believed to be the only former Dewey partner to
be sued for defaulting on his loan, although it could not be
determined why he may have been singled out.
It is now up to a judge to decide whether Otillar's case can
proceed to trial.
The case is Citibank, N.A. v. Otillar et al, No.
(A previous version of this story misspelled Dewey & LeBoeuf
in the first paragraph. It is LeBoeuf not LeBouef.)
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