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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.

McKinsey & Co. has filed a new application to work as an adviser in the Westmoreland Coal Co. bankruptcy case, nearly nine months after the coal-mining company sought chapter 11 protection, the Wall Street Journal reported. The employment application and accompanying disclosures of potential conflicts of interest, filed on Wednesday with the U.S. Bankruptcy Court in Houston, provide detailed insight into McKinsey’s disclosure practices and contrast starkly with the firm’s first application, which it filed in November. McKinsey’s bankruptcy disclosures have been a headache for the consulting firm for years, and it has gradually increased transparency into potential conflicts of interest. Bankruptcy advisers are required to be disinterested in a case’s outcome, and conflict disclosure rules aim to ensure all parties involved in a matter are aware of relationships that may taint the process. McKinsey’s latest disclosures, which span several hundred pages, are an attempt to shed more light on links between McKinsey, its consulting and investment affiliates, and affiliates of Westmoreland, going back three years in most cases. McKinsey also brought in an accounting firm to assist in checking the adequacy of its process. In addition to checking a list of nearly 10,000 clients for those that could have a stake in the outcome of the bankruptcy, McKinsey says that it sent out five different questionnaires to its professionals asking for information about individual investments or other connections that could require disclosure. The new application and disclosures stem from a settlement, struck in February with the help of a mediator, in which McKinsey agreed to retain experts to help it draft a new disclosure policy. Unveiled last month, the 24-page document prescribes specific disclosure practices recommended by the consulting firm, whose Recovery & Transformation Services unit advises multibillion-dollar companies on bankruptcy matters.

North Carolina’s insurance department on Thursday took control of a group of troubled life insurers owned by indicted entrepreneur Greg Lindberg, the Wall Street Journal reported. Lindberg was arrested in April on federal criminal charges of conspiring to bribe the state’s insurance commissioner to obtain more favorable regulatory treatment. In February, the Wall Street Journal reported that Mr. Lindberg had lent at least $2 billion from his insurance companies to his other businesses. A takeover of the insurers, being operated as Global Bankers Insurance Group, followed a state judge’s approval, said Insurance Commissioner Mike Causey. The insurers were acquired in recent years by the formerly highflying Lindberg, who proceeded to replace many of their assets with investments in his own companies. Lindberg, meanwhile, became the largest political donor in North Carolina and began living a lavish lifestyle, acquiring luxury homes, a 214-foot yacht and a private jet.