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.
White Star Petroleum’s bankruptcy cases will be handled by the federal bankruptcy court in Oklahoma City, court records show, the Oklahoman reported. Orders issued earlier this month by bankruptcy judges in both Delaware, where the company incorporated, and in Oklahoma City set hearings in the case locally — something the company had argued against. The Oklahoma City chapter 11 involuntary bankruptcy case was filed against White Star by five creditors on May 24. White Star responded by seeking bankruptcy protection in the Delaware venue. Initially, company officials asked for the involuntary case filed by Baker Hughes Oilfield Operations, Mustang Heavy Haul, Latshaw Drilling, MS Directional and Cactus Drilling to be dismissed and asked the Delaware judge to allow its voluntary case to proceed. When the company filed its case, officials stated they had secured adequate financing to “timely pay all employees, vendors and suppliers for services and products provided during chapter 11."
