2nd Circ. Revives Bankruptcy Fraud Claims Against McKinsey

By Dorothy Atkins (January 19, 2022, 8:12 PM EST) -- The Second Circuit revived Wednesday a racketeering lawsuit accusing McKinsey & Co. of intentionally failing to disclose disqualifying conflicts of interest in big bankruptcy cases, finding that the trial court erred in concluding that the alleged harm to a rival bankruptcy adviser was too attenuated.

In a 31-page opinion written by U.S. Circuit Court Judge Barrington D. Parker, a unanimous three-judge panel reversed a lower-court order that dismissed Jay Alix's racketeering claims, finding that Alix had plausibly alleged that his firm lost business to McKinsey and was harmed by McKinsey's allegedly inadequate conflict-of-interest disclosures provided to bankruptcy courts.

"In general, we...

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