McKinsey to face racketeering lawsuit, after case revived in appeal
A US court has reopened a case against consultancy giant McKinsey, alleging the US firm filed false statements in bankruptcy courts to win lucrative consulting contracts.
The US Court of Appeals revived a racketeering case put forward by consulting firm AlixPartners, claiming McKinsey misled the bankruptcy court over its conflicts of interest, meaning it won contracts when it shouldn’t have.
The court’s decision to revive the case comes after specialist bankruptcy consultancy AlixPartners – founded by billionaire Jay Alix in 1981 – first sued McKinsey in 2018.
Lower courts later threw the case out of court after claiming that AlixPartners had not shown a link between McKinsey’s alleged wrongdoing, and harm to AlixPartner’s business.
Alix claims that it would have won the contracts, had McKinsey not lied about its conflicts of interests, which Alix says should have disqualified McKinsey from winning 13 contracts for work.
Alix also alleges McKinsey operated a “pay-to-play” scheme, through which it paid off bankruptcy lawyers in exchange for business referrals.
In an email to CityAM, a McKinsey spokesperson said: “Today’s decision solely addresses technical pleading standards and not whether Mr. Alix’s claims are true. To date, Mr. Alix has lost all six of his lawsuits against McKinsey, and we are confident the evidence will ultimately show that this lawsuit is similarly meritless.”
McKinsey have previously denied the allegations, after claiming that Jay Alix has “conducted a relentless campaign” against McKinsey, to prevent it from competing with AlixPartners.
In an statement, Jay Alix said: “We are grateful that the court of appeals confirmed the need for our case to proceed to protect the integrity of our nation’s bankruptcy system.”
“We will now pursue our allegations that for years McKinsey perpetrated a massive fraud on multiple courts in our bankruptcy system. Today’s ruling is a strong affirmation of the values of openness, transparency, and full disclosure, inherent in our nation’s bankruptcy system, as we alleged in our complaint, and as flagrantly violated by McKinsey.”