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A panel of three judges approved a $15 million settlement between McKinsey & Co. and the Justice Department, resolving the government’s allegations that the consulting firm didn’t disclose conflicts of interest in bankruptcy cases it helped steer, WSJ Pro Bankruptcy reported. The settlement, struck in February with the help of a mediator, is one of the largest sums ever paid by a bankruptcy professional for alleged disclosure violations and covers three large chapter 11 cases: coal miner Alpha Natural Resources, solar-energy company SunEdison Inc. and Westmoreland Coal Co. The settlement provides $5 million for unsecured creditors in each case, though exactly how that money will be distributed has yet to be resolved. The deal follows several years of court filings from the Justice Department criticizing McKinsey’s conflicts disclosure practices. Lawyers from the U.S. Trustee Program, an arm of the Justice Department charged with protecting the integrity of the nation’s bankruptcy system, have said that McKinsey’s disclosures didn’t comply with bankruptcy law, because they failed to identity clients with connections to the cases that could pose conflicts of interest. The program’s lawyers also have said that McKinsey “wasn’t forthcoming” about links between its restructuring and investment arms.

A lending industry trade group is pressuring judges at the U.S. Court of Appeals for the Seventh Circuit to keep the cost of filing for chapter 11 protection low for financially struggling small businesses across the country, WSJ Pro Bankruptcy reported. In a court-filed brief, the Commercial Finance Association, which represents banks and other lenders to small and middle-market businesses, accused the Justice Department of trying to collect more money than it is entitled to from bankrupt businesses. Companies that file for chapter 11 protection pay a quarterly fee to a Justice Department division to use the court system. When federal lawmakers voted to increase that fee in 2017, courtroom battles broke out across the country over the unclear wording in federal law that mandates how much companies owe. In the dispute before the appeals court, Commercial Finance Association officials said that the Justice Department’s position on the fee calculations “has the potential to decimate the DIP lending market by materially increasing the cost” of some loans. The 28-page document, filed earlier this month, said some scenarios involving complex loan agreements and transfer scenarios would enable the Justice Department to collect the fee twice. “As lenders try to devise workout strategies with troubled borrowers, they need certainty over what will be considered a disbursement and thus subject to the 1 percent quarterly fee,” the group said. Under a new law, companies using chapter 11 protection that have operating expenses of more than $1 million must pay a fee to the Justice Department equal to 1 percent of those expenses, up to $250,000. The previous cap was $30,000. Government officials estimated the change would affect 10 percent of companies that file for chapter 11 protection.