McKinsey wins dismissal of Jay Alix's lawsuit over bankruptcy conflicts
Recasts; expands comment from Jay Alix's lawyer; adds McKinsey comment, details from decision, discussion of federal anti-racketeering law
Judge says Jay Alix lacked standing to sue under RICO
Alix says McKinsey hid tie to lenders, clients' rivals
McKinsey denies accusations, calls them meritless
By Jonathan Stempel
NEW YORK, July 3 (Reuters) -A U.S. judge dismissed turnaround specialist Jay Alix's lawsuit accusing consulting giant McKinsey & Co of misleading bankruptcy courts about conflicts of interest when seeking permission to perform lucrative work on corporate restructurings.
U.S. District Judge Jesse Furman in Manhattan said Alix lacked standing to sue under the federal Racketeering Influenced and Corrupt Organizations Act ("RICO") because AlixPartners, the consulting firm he founded and partially owns, never assigned him that right.
"Alix has no one to blame but himself - or perhaps AlixPartners," Furman wrote in a 34-page decision on Wednesday.
The decision follows six years of often bitter litigation between Alix and one of his most powerful rivals, including a successful appeal by Alix in 2022 of an earlier dismissal.
"We're disappointed in Judge Furman's decision, and respectfully disagree with it," Jay Alix's lawyer, Sean O'Shea, said. "This is a nonsubstantive ruling on the case, and we fully expect the (appeals court) to see our way again."
'CRIMINAL ENTERPRISE' ALLEGED
Alix accused McKinsey of running a "criminal enterprise" by hiding its ties to lenders and competitors of its clients.
He said these conflicts should have disqualified McKinsey from 13 bankruptcies including American Airlines AAL.O, food retailer Harry & David and coal producer Alpha Natural Resources, and potentially cost AlixPartners some assignments.
Alix also accused McKinsey of running a "pay-to-play" scheme in which McKinsey would arrange meetings between its consulting clients and bankruptcy lawyers, if those lawyers would refer their bankruptcy clients to McKinsey for restructuring work.
RICO lets people sue if they believe criminal enterprises caused them harm. Alix had sought triple damages.
McKinsey said in a statement: "We have said for years that Jay Alix's accusations are entirely meritless and we are glad the case has once again been dismissed."
AlixPartners was not a party to the case. The New York-based firm and its lawyers did not immediately respond to requests for comment.
'NO MERE TECHNICALITY'
Alix's assignment let him pursue claims against McKinsey over "illegal competitive activity in the crisis management and consulting business involving major bankruptcy cases."
But the judge said "illegal competitive activity" refers naturally to antitrust claims, and said the assignment did not mention RICO or terms such as racketeering and organized crime.
Furman said it was unclear whether the drafting was simply careless, or whether Alix and AlixPartners "tried to play fast and loose" by shielding AlixPartners from the burdens of litigation while preserving its ability to sue later.
The result "may smack of a technicality - especially in light of the lengthy history of this litigation," the judge wrote. "But it is no mere technicality."
Furman said the assignment did not surface in the litigation until January of this year, which explains why he did not rule on its validity sooner.
Reporting by Jonathan Stempel in New York
Editing by Matthew Lewis
Relaterade tillgångar
Senaste nytt
Ansvarsfriskrivning: XM Group-enheter tillhandahåller sin tjänst enbart för exekvering och tillgången till vår onlinehandelsplattform, som innebär att en person kan se och/eller använda tillgängligt innehåll på eller via webbplatsen, påverkar eller utökar inte detta, vilket inte heller varit avsikten. Denna tillgång och användning omfattas alltid av i) villkor, ii) riskvarningar och iii) fullständig ansvarsfriskrivning. Detta innehåll tillhandahålls därför uteslutande som allmän information. Var framför allt medveten om att innehållet på vår onlinehandelsplattform varken utgör en uppmaning eller ett erbjudande om att ingå några transaktioner på de finansiella marknaderna. Handel på alla finansiella marknader involverar en betydande risk för ditt kapital.
Allt material som publiceras på denna sida är enbart avsett för utbildnings- eller informationssyften och innehåller inte – och ska inte heller anses innehålla – rådgivning och rekommendationer om finansiella frågor, investeringsskatt eller handel, dokumentation av våra handelskurser eller ett erbjudande om, eller en uppmaning till, en transaktion i finansiella instrument eller oönskade finansiella erbjudanden som är riktade till dig.
Tredjepartsinnehåll, liksom innehåll framtaget av XM såsom synpunkter, nyheter, forskningsrön, analyser, kurser, andra uppgifter eller länkar till tredjepartssajter som återfinns på denna webbplats, tillhandahålls i befintligt skick, som allmän marknadskommentar, och utgör ingen investeringsrådgivning. I den mån som något innehåll tolkas som investeringsforskning måste det noteras och accepteras att innehållet varken har varit avsett som oberoende investeringsforskning eller har utarbetats i enlighet med de rättsliga kraven för att främja ett sådant syfte, och därför är att betrakta som marknadskommunikation enligt tillämpliga lagar och föreskrifter. Se till så att du har läst och förstått vårt meddelande om icke-oberoende investeringsforskning och riskvarning om ovannämnda information, som finns här.
