A judge declined to reopen a wireless company’s 2014 bankruptcy after it got caught up in a dispute over McKinsey & Co.’s conflict disclosures in chapter 11 cases, saying that investigating the matter is better left to the Justice Department, WSJ Pro Bankruptcy reported. During a hearing yesterday at the U.S. Bankruptcy Court in New York, Judge Shelley Chapman said that McKinsey’s sprawling legal battle with corporate turnaround industry veteran Jay Alix should be resolved through a “constructive process” outside of the courtroom and with oversight from the U.S. Trustee Program, the Justice Department division that monitors the nation’s bankruptcy system. “At a certain point, somebody who reports wronging ought to just step back and let the people whose job it is to take care of it take over,” the judge said. The ruling largely was a victory for McKinsey, which has accused Mr. Alix of using a torrent of lawsuits that now span several states to drive it out of the often-lucrative business of advising troubled companies in bankruptcy.
