McKinsey agrees to pay $15M to settle bankruptcy abuse claims

Consulting firm McKinsey and Co. agreed to pay the Department of Justice (DOJ) $15 million to settle three bankruptcy cases in which it is accused of not sufficiently disclosing conflicts of interest.

McKinsey was accused of not identifying clients who had connections with debtors the firm represented. The settlement is one of the highest ever repayments for disclosure cases. 

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"McKinsey agrees to pay $15 million in three bankruptcy cases to remedy inadequate disclosures of connections and to make additional disclosures," DOJ said in a statement.

“This settlement ensures that McKinsey is held accountable for its conduct,” said DOJ U.S. Trustee Program Director Cliff White in the statement. “Transparency is the linchpin of the bankruptcy system and professionals employed in bankruptcy cases must be free of conflicts of interest."

A spokesperson for McKinsey emphasized that the settlement is not an admission or ruling of wrongdoing. 

"The settlement does not opine in any way on the adequacy of McKinsey’s prior disclosures and...the proposed settlement resolves 'good faith disputes concerning the application of Bankruptcy Rule 2014." the spokesperson said in a statement. 

"McKinsey did not admit that any of its disclosures were insufficient or noncompliant, and the settlement does not in any way constitute an admission of liability or misconduct by McKinsey or any of its employees, officers, directors or agents," the statement added. 

—Updated at 6:42 p.m.