US subsidiaries of UK insurance giant Aviva have filed a lawsuit against the three former leaders of defunct law firm Dewey & LeBoeuf relating to the firm's $125m (£77.1m) bond offering in 2010.

The claim was filed against former Dewey chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders on Friday (14 December) in Iowa Southern District Court by Aviva Life and Annuity Company and Aviva Life and Annuity Company of New York.

Aviva bought $35m (£21.6m) in senior secured notes from Dewey in 2010. It alleges that the firm's leadership team failed to sufficiently inform the company about Dewey's financial health at the time of the acquisition, leading to a loss when it subsequently sold them earlier this year.

According to The American Lawyer magazine, the filing states Aviva ended up selling the notes for $19.27m (£11.9m) on May 4 this year, less than a month before the ailing firm filed for bankruptcy protection.

Aviva accuses the leadership team of failing to disclose in its bond offering memorandum that it had missed required payments to retirees in 2010 and that it had struck scores of guaranteed compensation deals with partners.

A spokesperson for Aviva said: "In March 2010, Aviva purchased $35m (£21.6m) in senior secured notes through a private securities offering issued and sold by Dewey & LeBoeuf LLP. As a result of the law firm's financial difficulties, Aviva incurred a financial loss on the sale of the notes.

"It has become clear to Aviva that certain members of Dewey's leadership failed to sufficiently inform Aviva about the firm's financial health, and did not provide certain critical information that Aviva required, and was entitled to, when purchasing the notes. Our complaint simply seeks to recover damages stemming from Aviva's investment and to hold Dewey's senior leaders accountable."

DiCarmine and Sanders are being represented by New York-based Hughes Hubbard & Reed partner Ned Bassen, while Davis is represented by Chicago-based Kirkland & Ellis partner Kevin Van Wart, according to The American Lawyer. The American Lawyer article said Bassen had dismissed the claim as "frivolous", while Van Wart said Davis looking forward to mounting a "vigorous defence".

Aviva is being represented by Nyemaster, Goode, West, Hansell & O'Brien partner John Clendenin in Iowa, and Kilpatrick Townsend & Stockton partners Helen Michael in Washington, DC, and Stephen Hudson in Atlanta.

In October the bankruptcy judge overseeing Dewey's collapse approved a $71.5m (£45m) settlement between Dewey's former partners and the defunct firm's estate.

At that point around 450 of 670 former Dewey partners had opted to participate in the settlement, which requires partners to pay portions of their earnings from 2011 and 2012 in exchange for a waiver from future liability over the firm's debts, with individual payments ranging from $5,000 (£3,100) to $3.37m (£2.1m).

Dewey become the world's largest law firm failure when it collapsed into bankruptcy on 28 May in the wake of dozens of partner exits, and revelations that the firm had overstated its 2011 financial results by effectively reporting 14 months' worth of billings and had not been paying partners their full profit entitlements.

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