Bankruptcy Judge David Jones in Texas will hear arguments this week on whether McKinsey & Co.’s process for disclosing potential conflicts of interest followed the law in a major chapter 11 case, the Wall Street Journal reported. The trial is the culmination of a long-running dispute between the management consulting firm and Jay Alix, the founder of rival corporate turnaround firm AlixPartners LLP. Alix says that McKinsey has concealed serious conflicts of interest in its bankruptcy work. He has for years asked federal courts to punish McKinsey for what he says is a threat to the integrity and transparency of America’s bankruptcy system. McKinsey insists its conflicts disclosures practices go above and beyond what is legally required and says it is ready for the opportunity to clear its name. Opening arguments begin tomorrow at the U.S. Bankruptcy Court in Houston in a trial within the bankruptcy of Westmoreland Coal Co. The trial will focus on whether McKinsey was qualified to work as an adviser on Westmoreland’s $1.4 billion chapter 11 case, which the coal miner filed in 2018.
