A judge in Virginia reopened a more than two-year-old case yesterday to consider accusations that the powerful consultancy McKinsey & Company had defrauded his court while advising a bankrupt coal company, the New York Times reported. “These are some of the most serious allegations that I have ever seen,” said Bankruptcy Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia. The decision to reopen the bankruptcy case of Alpha Natural Resources was the latest in a series of court actions and legislative maneuvers meant to examine whether McKinsey has failed to disclose investments in the entities it helps reorganize — an arrangement that could allow the company to profit off the plan it helped put in place. The request to reopen came from a retired turnaround specialist, Jay Alix, and was supported by the Justice Department’s Office of the U.S. Trustee. McKinsey has denied wrongdoing. “We continue to stand by our disclosures, which have always fully complied with the law, and we are confident that Alix’s fraud claims will be exposed as completely meritless,” the company said. McKinsey already faces similar claims of misconduct from Mr. Alix in the bankruptcy of another energy company, Westmoreland Coal, in Texas.
