JJay Alix thought he was doing Dominic Barton, the man then leading McKinsey & Co., a favor.
It was the summer of 2014, and Alix had recently discovered that the powerful management consulting firm had entered the bankruptcy advisory business that he — as founder of AlixPartners — had helped launch more than 30 years earlier.
The problem, Alix had come to believe, was that McKinsey was acting illegally.
“I thought if I were him and somebody were doing this in my company, I would want to know about it and I would want to stop it immediately. It’s a federal offense,” he says. “Of course he’ll want to do the right thing if I just tell him.”
Alix phoned Barton, then McKinsey’s global managing partner — the firm’s equivalent of CEO — and told him the two needed to meet.
An Oxford graduate who had risen through the ranks to head McKinsey, Barton, after much pleading by Alix, finally agreed to a one-on-one with the bankruptcy expert at Alix’s law firm in midtown Manhattan that September.
Barton, no doubt, had a lot on his mind. McKinsey was still reeling from the scandal that erupted when Rajat Gupta, a former managing partner, was hauled off to prison for insider trading. And in the years to come, it would continue to endure a series of scandals that encompassed everything from alleged corruption in South Africa — what The New York Times called the “biggest mistake in McKinsey’s nine-decade history” — to a Massachusetts lawsuit over its role in advising opioid producers on how to “turbocharge” sales.
But Alix’s allegations didn’t involve former partners, faraway lands, or odious advice. Instead, he claimed something potentially more serious and certainly closer to home: that McKinsey itself was engaged in repeated efforts to flout U.S. bankruptcy law.
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