By Jonathan Stempel
NEW YORK (Reuters) – A U.S. judge on Wednesday dismissed retired turnaround specialist Jay Alix’s lawsuit accusing the consulting firm McKinsey & Co of concealing potential conflicts when seeking bankruptcy court permission to perform lucrative work on corporate restructurings.
U.S. District Judge Jesse Furman in Manhattan said Alix lacked standing to pursue racketeering claims against McKinsey because AlixPartners, the turnaround advisory firm he founded and partially owns, did not assign him the right to pursue those claims on his own.
Sean O’Shea, a lawyer for Alix, said they were disappointed with the decision, which did not address the merits of Alix’s case, and that they expect to succeed in a planned appeal.
A McKinsey spokesman declined to comment. AlixPartners and its lawyers did not immediately respond to requests for comment.
Furman’s decision follows six years of often bitter litigation between Alix and one of his most powerful competitors.
Alix had accused McKinsey of running a “criminal enterprise” by hiding its ties to lenders and competitors of its clients.
He said these conflicts of interest should have disqualified McKinsey from 13 bankruptcies including American Airlines, the food retailer Harry & David and coal producer Alpha Natural Resources, which potentially caused AlixPartners to lose assignments.
Alix also accused McKinsey of running a “pay-to-play” scheme in which it obtained referrals from bankruptcy lawyers as a reward for arranging meetings between clients and those lawyers.
(Reporting by Jonathan Stempel in New York; Editing by Matthew Lewis)
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