Restructuring advisers should be able to limit how much they reveal about potential conflicts of interest in large bankruptcy cases, a role typically left to federal judges, according to a new protocol on bankruptcy practices drafted by consulting firm McKinsey & Co., WSJ Pro Bankruptcy reported. The 24-page document, filed with the U.S. Bankruptcy Court in Houston in response to criticism from federal monitors, outlines new bankruptcy disclosure practices recommended by the consulting firm, whose Recovery & Transformation Services unit advises multibillion-dollar companies on bankruptcy matters. Bankruptcy Judge David R. Jones authorized McKinsey to draft the new guidelines, dubbed the Houston Disclosure Protocol, after McKinsey was criticized for its failure to identify an array of connections and relationships it had with parties involved in 14 chapter 11 cases in which it has worked. Disclosure requirements should exclude matters that are deemed de minimis, meaning they are of minor monetary value or otherwise insignificant, McKinsey said in the new protocol, and shouldn’t trump an adviser’s “valid confidentiality concerns.” The consulting firm has said the new protocol is necessary to clarify what it calls complex and ambiguous disclosure rules.
