Supreme Court Won’t Intervene in Fight Between Jay Alix and McKinsey

The Supreme Court will not intervene in the dispute between retired turnaround advisor Jay Alix and the McKinsey consulting firm, nor will the high court rule on whether upholding the integrity of the judicial system by itself confers standing to appeal when the appellant is not otherwise an “aggrieved person.”

Yesterday, the Supreme Court denied the petition for certiorari in Mar-Bow Value Partners LLC v. McKinsey Recovery & Transformation Services US LLC, 18-974 (Sup. Ct.). Although the Court does not give reasons for denying certiorari, the justices evidently were not persuaded by Alix’s contention that there is a split of circuits.

Litigating through a company named Mar-Bow, Alix had hired Lawrence H. Tribe to assist in drafting the petition, hoping that the Harvard Law School professor’s advice would increase the odds for a grant of certiorari.

The case came to the Supreme Court from the reorganization of coal producer Alpha Natural Resources Inc. One of the creditors, Alix, challenged the adequacy of the disclosures under Bankruptcy Rule 2014 made by the debtor’s turnaround advisor, McKinsey Recovery & Transformation Services US LLC.

Ruling that McKinsey’s disclosures were adequate and that the firm was disinterested, the bankruptcy court only required McKinsey to file an in camera disclosure of the names of some of its clients. Alix appealed, asking the district court to compel public disclosure of McKinsey’s clients.

Concluding that Alix lacked appellate standing, the district court dismissed the appeal in September 2017, prompting an appeal to the Fourth Circuit. In a one-paragraph order, the appeals court affirmed in September 2018, “for the reasons stated by the district court.” To read ABI’s discussion of the Fourth Circuit’s ruling, click here.

The district court found no appellate standing, reasoning that Alix was not a “person aggrieved” because he would not benefit monetarily from a reversal.

In the Supreme Court, Alix argued there was a split of circuits. According to the certiorari petition filed in January, the Second, Third, Sixth and Eleventh Circuits recognize an exception to the pecuniary interest requirement by holding that the public interest may also create a sufficient stake in the outcome to confer appellate standing. Alix admitted that the Fourth, Fifth and Seventh Circuits do not recognize the public interest exception to the pecuniary interest test.

The Supreme Court evidently had little interest in the case. When the Court grants certiorari, the petition is often discussed by the justices at more than one conference. In Alix’s case, the petition was considered only at the conference on April 18, with the formal denial of certiorari filed yesterday along with a slew of other orders.