Ex-Dewey Partner Altorelli Files for Bankruptcy

John Altorelli, an outspoken former Dewey & LeBoeuf LLP partner sued for $12.9 million in the wake of the law firm’s collapse, filed for personal bankruptcy Tuesday to halt the collection efforts.

In a lengthy statement issued Wednesday announcing his decision, an attorney for Mr. Altorelli said he has been unable to reach a settlement of the lawsuit  “after weeks of negotiations.”

Mr. Altorelli couldn’t immediately be reached for comment.

Mr. Altorelli is one of only a handful of ex-partners who are still fighting over Dewey-related debts. A recent decision by the judge overseeing Dewey’s bankruptcy proceeding made it harder for Mr. Altorelli and the other holdouts to win the suits, ruling that under New York state law, any money the partners were paid while the firm was insolvent can be clawed back.

“The decision incentivizes productive, hard-working partners in [New York limited liability partnerships] to abandon their law firms at the first sign of financial distress,” Mr. Altorelli’s lawyers said in the statement. “John’s decision to stay at Dewey and help it through its financial difficulties only prolonged his exposure.”

Allan Diamond, the attorney who brought the clawback suits, declined to comment Wednesday.

Mr. Altorelli moved to DLA Piper in April 2012, less than two months before Dewey sought Chapter 11 protection.Weeks after his departure, Mr. Altorelli announced that he would donate $10,000 to help cushion the blow for Dewey support staff and junior lawyers who were about to lose their jobs. At the time, he encouraged his fellow former partners to do the same.

Also shortly after Mr. Altorelli left Dewey, he landed on the New York Post’s gossip pages for an item about his alleged love affair with Russian spy Anna Chapman. He wasn’t accused of knowing Ms. Chapman’s occupation, according to the Post.

In a Chapter 7 bankruptcy petition filed in Bridgeport, Conn., Mr. Altorelli lists liabilities of between $10 million and $50 million and assets of between $1 million and $10 million. He is at least the third former Dewey partner to file for personal bankruptcy.

Mr. Altorelli’s filing doesn’t list any individual debts, and a judge filed an order to show cause as to why the petition shouldn’t be dismissed, setting a Jan. 9, 2015 hearing date.

Write to Sara Randazzo at [email protected]. Follower her on Twitter at @sara_randazzo