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The Oregon Government Ethics Commission has accused former Oregon First Lady Cylvia Hayes of using her bankruptcy proceeding to drag out a resolution of her ethics case months longer than needed, the Associated Press reported. Carolyn Wade, a senior assistant attorney general representing the commission, made the claim in a Dec. 31 filing in Hayes' bankruptcy proceeding. Hayes filed for chapter 13 bankruptcy in July 2018. In addition to up to $110,000 in possible civil penalties from 22 ethics violations, Hayes has a more than $124,000 judgment against her for a public records lawsuit The Oregonian won. Wade said the bankruptcy proceeding is meritless. The ethics commission ruled in January 2018 — six months before Hayes filed for bankruptcy — that she violated state ethics laws by using her position for the financial benefit of herself and her business. Many of the violations centered around Hayes' work on environmental consulting contracts while also involved as an unpaid adviser who did energy policy work in Gov. John Kitzhaber's office.

The restructuring industry is keeping tabs on the domestic and global political climate as it looks ahead to 2019 — specifically, the trade war and expected increases in interest rates, WSJ Pro Bankruptcy reported. Since 2016, when Donald Trump won the presidential election, uncertainty stemming from politics has remained the dominant theme when looking ahead in the restructuring industry. While that’s the constant, the reasons for uncertainty have changed over the past few years. The effect of tariffs on certain industries should cause a spike in restructuring activity, especially if interest rates continue to creep up, industry experts told WSJ Pro Bankruptcy. While there’s been a reprieve on the imposition of a final round of tariffs on Chinese exports to the U.S. — President Trump and Chinese counterpart President Xi Jinping agreed in December to a 90-day tariff truce — the continued uncertainty looms over U.S. companies. To be sure, while these issues look to be “creating a perfect storm” for a wave of restructurings, many issues “could also dissipate if there’s a deal with China,” said Jeffrey Pomerantz, partner at Pachulski Stang Ziehl & Jones. Continued volatility in the stock market could further pressure companies in 2019. Between the general economic uncertainty and the sharp gyrations in the stock market, sentiment is fraying in the debt markets, said Bill Derrough, global co-head of restructuring and recapitalization at Moelis & Co., as well as Douglas Foley, a restructuring partner at McGuireWoods LLP.

A brawl that is erupting in the Federal Bankruptcy Court in Houston has the potential to cause big problems for the consultancy McKinsey & Company, the New York Times reported. The courtroom fight hinges on whether McKinsey or its clients have hidden interests in a bankrupt coal company that the firm has been advising, a practice prohibited by federal laws meant to ensure that one insider can’t effectively cut itself or its friends a great deal at the expense of others. The man leveling the accusations, Jay Alix, is a retired turnaround expert who has made it his personal mission to harry McKinsey. Alix has spent four years first needling the firm’s leadership, then attacking it in court, accusing it of violating federal laws and unethical behavior. Normally a firm of McKinsey’s size would swat away a gadfly’s attacks. But in this case, which involves the bankruptcy of Colorado’s Westmoreland Coal, Mr. Alix has a powerful ally: the United States Justice Department. On Dec. 14, the department said in a court filing that McKinsey was fraught with “pervasive disclosure deficiencies” and should be dismissed from the Westmoreland case immediately and stripped of the fees it had earned so far. If that were to happen, it would deal a severe blow to McKinsey’s reputation, as well as its argument that the firm is free of conflicts of interest.

A Texas judge said on Tuesday that a dispute between Jay Alix, founder of AlixPartners LLP, and McKinsey & Co. over bankruptcy conflicts disclosures “brings into play everything I took an oath to protect” and warned of a “horrific consequence” for the loser in the sprawling legal battle, WSJ Pro Bankruptcy reported. During a hearing in the Westmoreland Coal Co. chapter 11 case at the U.S. Bankruptcy Court in Houston, Judge David Jones told both sides that he intends to get to the bottom of allegations of wrongdoing Alix and McKinsey have levied at each other in recent years. Alix says that McKinsey has for years ignored federal laws requiring bankruptcy advisers to disclose all relationships that could bias their work. McKinsey says Alix is trying to clear the playing field for AlixPartners, a competitor to McKinsey in the corporate turnaround industry. Alix retired from AlixPartners in 2006, but he retains a minority ownership stake. “This has the potential to affect careers, maybe even end careers,” Judge Jones said on Tuesday. “I just want to make sure people understand what they’re signing up for." Judge Jones also oversaw another energy bankruptcy case in which McKinsey worked as an adviser: GenOn Energy Inc. On Tuesday, the judge questioned whether he would have to address that case as well. “I’m worried I did something wrong in GenOn,” he said. “If I did something wrong, I’m going to fix it.”