McKinsey denies shuttering restructuring division
McKinsey & Company has denied a report from The Wall Street Journal saying the consulting firm is shutting down its corporate restructuring practice.
The WSJ yesterday reported that “people familiar with the matter” said the New York-based firm was closing its McKinsey RTS division – having already laid off some partners and shifted others to different divisions.
McKinsey later in the day denied the report, telling Reuters, “McKinsey RTS is not being shut down. Reports to the contrary are inaccurate.”
McKinsey has in recent years attracted private lawsuits and government investigations pertaining to conflicts of interest in its bankruptcy sector work.
The firm in 2021 paid an $18-million fine to the SEC over allegations an affiliated private investment fund had inadequate controls to prevent the use of insider information from McKinsey’s consulting work – including planned bankruptcy filings.
McKinsey in 2019 paid $15 million to the US Trustee Program – the Department of Justice’s unit overseeing bankruptcy proceedings – for inadequate conflict of interest disclosures in its advisory work on the Chapter 11 bankruptcy cases of Alpha Natural Resources (ANR), Westmoreland Coal, and SunEdison.
In both cases the management consultancy settled without admitting wrongdoing.
Jay Alix, founder of restructuring consultancy AlixPartners, has been conducting an ongoing lawsuit accusing McKinsey of conflicts of interest and racketeering in its insolvency work. The US Supreme Court last year denied McKinsey’s request to escape the lawsuit.
McKinsey has characterized the suit as a smear campaign from a rival restructuring consultant.
