Law firm Dewey & LeBoeuf files for bankruptcy

(CBS/AP) NEW YORK - In one of the largest law firm failures in U.S. history, embattled New York firm Dewey & LeBoeuf LLP has filed for bankruptcy, a move that will be followed by liquidation.

The debt-laden firm filed the papers in federal court in Manhattan Monday night.

It says it will keep about 90 employees to assist in the wind-down. It expects most of the process to be completed in the next few months.

In the meantime, it says it will operate on a budget and timetable to be determined by the court.

The Wall Street Journal reports the Manhattan district attorney's office had launched a criminal investigation into activities at the firm. Regulators have sued to take over its pension plans, which they say are underfunded by $80 million.

According to the court filing, Dewey is carrying liabilities of $315 million - $225 million of which is owed to banks.

Amid its debt problems, the firm also suffered a rash of defections, with more than 160 of the firm's 300 partners resigning recently, according to the filing.

According to the New York Times, the company had once employed over 2,500 people -- among them 1,400 lawyers in 26 offices throughout the world.