A federal judge dismissed claims yesterday by turnaround pioneer Jay Alix that McKinsey & Co violated racketeering laws when the consulting firm expanded into advising bankrupt U.S. companies, Reuters reported. Alix accused the consulting firm, known for its secrecy, of improperly concealing potential conflicts when it sought bankruptcy court approval to advise companies in chapter 11. The decision is part of a larger battle between McKinsey and Alix that has been waged since at least 2016 across multiple courts. Alix has said that he is fighting for the integrity of the bankruptcy system, while McKinsey has said that Alix is using the courts to try to stifle competition. Alix said that McKinsey’s bankruptcy work was a “criminal enterprise” that generated an unlawful profit of at least $101 million, at the expense of AlixPartners, the firm Alix founded. In yesterday’s ruling, U.S. District Judge Jesse Furman of Manhattan dismissed claims brought under a racketeering law known as RICO that McKinsey had harmed AlixPartners. “In sum, the link between McKinsey’s allegedly unlawful conduct and AlixPartners’ alleged injury is too remote, contingent, and indirect to sustain a RICO claim,” Judge Furman wrote.
