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The U.S. Supreme Court on Tuesday declined to hear McKinsey & Co.'s bid to escape a lawsuit by retired turnaround specialist Jay Alix, who accused the management consulting firm of concealing potential conflicts when seeking permission from bankruptcy courts to perform lucrative work on corporate restructurings, Reuters reported. The justices turned away McKinsey's request that they overturn a lower court's decision that the lawsuit by Alix, who says the firm ran a "criminal enterprise" by hiding its ties to lenders and its clients' competitors. Alix's lawsuit accused McKinsey and several current or former employees of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), a U.S. law used to target illegal conspiracies that originally was designed to target organized crime. Alix, who has battled McKinsey in multiple courtrooms since 2016, sought triple damages under RICO, which lets people sue if they believe criminal enterprises caused them harm. U.S. District Judge Jesse Furman in Manhattan in 2019 dismissed the lawsuit, saying that Alix did not assert a "proximate" link between McKinsey's alleged wrongdoing and harm to AlixPartners. Alix reported owning a 35% equity stake in AlixPartners. The U.S. Court of Appeals for the Second Circuit in January revived the case, saying that Judge Furman gave "insufficient consideration" to whether McKinsey undermined the integrity of federal judicial proceedings. "If McKinsey's conduct has corrupted the process of engaging bankruptcy advisors, as Alix plausibly alleges, then the unsuccessful participants in that process are directly harmed," Second Circuit Judge Barrington Parker wrote. McKinsey in its petition to the Supreme Court argued that the Second Circuit's decision ran contrary to past rulings by the high court holding that RICO lawsuits may be brought only by plaintiffs injured "directly" by wrongdoing.

The first bills from the army of lawyers and advisers working on the bankruptcy of crypto lender Celsius Network LLC are in and already adding up to millions of dollars, Bloomberg News reported. Alvarez & Marsal North America LLC, a financial adviser for the debtors, has asked to be paid about 80% of a near-$3 million bill for work involving 20 staffers over July 14 to Aug. 31, according to a filing Tuesday. In another filing, fees for a court-appointed examiner and her counsel were estimated at $3 million to $5 million, excluding additional expected costs from a financial adviser the examiner plans to retain. Celsius, once one of crypto’s most prominent lenders, suspended customer withdrawals in June and sought bankruptcy protection the following month. The market value of Celsius’s holdings has declined about $12.3 billion since the end of March to $1.75 billion, and the large majority will likely be deemed property of the bankruptcy estate, making customers the exchange’s only unsecured creditors, according to Negisa Balluku, a litigation analyst at Bloomberg Intelligence. Separately, Celsius said in a tweet that it’s filed a motion to set a deadline for customers to submit proofs of claim -- the so-called bar date -- and that the matter is due to be heard in court on Nov. 1.

McKinsey & Co., the consulting powerhouse that advises not just Puerto Rico’s government but also the primary contractors and vendors for the island territory’s energy system, is facing scrutiny in the wake of the power grid’s continued dysfunction, WSJ Pro Bankruptcy reported. Since McKinsey was hired as the top consultant to Puerto Rico’s financial-oversight board, which oversees public spending, the firm has helped officials shape efforts to overhaul the territory’s electricity system through a privatization process that resulted in a venture backed by one of McKinsey’s clients winning the lucrative contract to operate the grid. Puerto Rico now faces a major reconstruction of its energy infrastructure after last month’s Hurricane Fiona, another challenge for residents who have endured years of costly, unreliable electricity service. Even before Fiona hit the island, hundreds of demonstrators gathered in the streets of Old San Juan in recent months to protest the frequent blackouts and high costs plaguing consumers. Much of the public anger has centered on Luma Energy LLC, a joint venture half-owned by McKinsey client Quanta Services Inc. that in 2020 won the $1.5 billion grid operation contract. Blackouts in some parts of Puerto Rico have increased since Luma took on the contract, Puerto Rican residents said. In August, the Puerto Rico Energy Bureau found a key metric on reliability “indicates that Luma has yet to realize improvements in reliability in terms of outage durations.” On other metrics, such as customer response times and workplace accidents, the data show improvements under Luma, according to regulatory data.

Loyalty Ventures Inc. has hired PJT Partners Inc. to advise on how to restructure its debt less than a year after the company was spun off from Alliance Data Systems Corp., WSJ Pro Bankruptcy reported. The Texas-based loyalty-programs operator owns and operates the Air Miles Reward Program, which is popular in Canada, and the BrandLoyalty program for grocers and other retailers. The company also creates custom loyalty programs to help retailers retain their customers. The company had about $600 million in long-term debt and about $224 million in liquidity at the end of June, according to its second-quarter earnings report. It recorded about $442 million in losses for the quarter. The company attributed business challenges to a volatile economic environment caused by geopolitical tension, higher energy prices, inflation and declining consumer confidence, Chief Executive Charles Horn said last month. It also has been losing clients to other loyalty-program operators.