McKinsey & Co. should be denied consulting work in the Westmoreland Coal Co. bankruptcy, federal lawyers said in the latest attack on the firm’s restructuring business, Bloomberg News reported. The consulting giant has refused to disclose potential conflicts of interest in the coal case and is acting as a creditor itself, the U.S. Trustee, an arm of the Department of Justice, told a judge in Texas. That should bar McKinsey from giving Westmoreland advice on how to restructure its debt, the lawyers said. “McKinsey RTS must be held to the same standard as any other professional. No other professional would be allowed to do this,” wrote Hector Duran, a trial attorney with the U.S. Trustee in Houston. In a statement, McKinsey said that a new standard for adviser disclosures is being applied in the Westmoreland bankruptcy. The move is the second challenge by the bankruptcy watchdog in recent weeks. Last month, the U.S. Trustee in Virginia asked a federal judge to order McKinsey to return fees in a separate coal-company bankruptcy after concluding the firm had violated U.S. bankruptcy rules requiring disclosure of potential conflicts.
