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Corporate turnaround guru Jay Alix prevailed on Tuesday in his long-running battle with consulting giant McKinsey & Co., the Wall Street Journal reported today. Alix, who made his career helping distressed companies shed debt and shore up their bottom lines, has accused McKinsey of failing to follow bankruptcy rules by keeping secret the client relationships that could create conflicts of interest in its work advising bankrupt companies. McKinsey denies wrongdoing and has accused Alix of trying to cripple a rival to the consulting business he founded several decades ago. But an airing of the dispute on Tuesday before Bankruptcy Judge Kevin Huennekens, who is overseeing the chapter 11 restructuring of McKinsey client Alpha Natural Resources Inc., ended in a victory for Alix. Judge Huennekens is requiring McKinsey to divulge to the court by Monday key business details, including more than 100 client names the firm has previously sought to keep confidential, though he vowed to make sure the sensitive information wouldn’t fall into Alix’s hands.

The Supreme Court today granted certiorari in Czyzewski v. Jevic Holding Corp. to decide whether bankruptcy courts are allowed to dismiss chapter 11 cases when property is distributed in a settlement that violates the priorities contained in Section 507 of the Bankruptcy Code, according to an analysis by ABI Editor-at-Large Bill Rochelle. Although Jevic deals with structured dismissals, the Supreme Court’s decision might also have the effect of allowing or barring so-called gift plans where a secured creditor or buyer makes a payment, supposedly from its own property, that enables a distribution in a chapter 11 plan not in accord with priorities. Granting certiorari was not surprising because there has been a long-standing split of circuits. Click here to read Rochelle's exclusive analysis. 

Click here to view the certiorari petition and other Jevic case documents on ABI's Supreme Court page.