A Texas bankruptcy judge teed up a trial intended to end a long-running dispute between McKinsey & Co. and AlixPartners founder Jay Alix, saying the outcome of the trial will be “the ultimate career ender” for one of the two sides, the Wall Street Journal reported. The trial will center on whether McKinsey was qualified to work as an adviser on Westmoreland Coal Co.’s chapter 11 case, which was filed last year and largely concluded after just four months. In calling for a full evidentiary trial in February, Judge David Jones of the U.S. Bankruptcy Court in Houston, who is overseeing the Westmoreland case, ensured it will remain active well into next year. Alix says that McKinsey has repeatedly violated bankruptcy law by failing to disclose conflicts of interest in bankruptcy cases and has profited from some of its undisclosed connections to parties with a stake in the outcome of those cases. McKinsey denies those allegations and has vigorously defended itself in court, saying that Alix is using the courts to try to drive McKinsey out of the often-lucrative business of aiding troubled companies. Judge Jones reiterated the blunt warnings he has given to both McKinsey and Mr. Alix in the past, saying that he can be “incredibly harsh” and that he will decide “who survives and who does not.” The judge also promised his decision at the conclusion of the trial “will be the most thorough thing I’ve written since I’ve been on the bench.”
