Some of the $15 million McKinsey & Co. is paying to resolve allegations of inadequate conflict-of-interest disclosures in large corporate bankruptcies could end up in the pockets of the firm’s own employees because of its extensive investment holdings, WSJ Pro Bankruptcy reported. Lawyers for McKinsey told a bankruptcy judge on Thursday they couldn’t guarantee the firm’s employees won’t indirectly benefit from the settlement payout, which is meant to hold McKinsey accountable for allegedly improper disclosure practices that have dogged its bankruptcy business. The payment stems from a settlement between McKinsey and the U.S. Trustee Program, a unit of the Justice Department that oversees the bankruptcy system. The trustee alleged McKinsey wasn’t forthcoming about investments it held that gave it an interest in the outcome of bankruptcy cases it advised on and said the firm lacked “timely, voluntary and direct candor in making disclosures.” McKinsey didn’t admit any wrongdoing.
