Some people travel the world playing poker. Others prefer bridge. Jay Alix derives his greatest pleasure from telling anyone who’ll listen how awful McKinsey is. Which makes this week an extra-special one for the AlixPartners founder, as he gets to spend it making his literal case to a federal judge in Houston.

On Wednesday, lawyers for McKinsey and Mr. Alix also discussed a series of conversations between him and Dominic Barton, a former McKinsey global managing partner, that have become a particularly heated source of acrimony….

Mr. Alix says Mr. Barton, who now serves as Canada’s ambassador to China, called bankruptcy disclosure laws unimportant and never acted to improve McKinsey’s practices. In a statement, Mr. Barton called Mr. Alix’s allegations “a total fabrication.”

For their part, those McKinsey lawyers are sticking to their story, which is that their client goes over and above in terms of conflicts disclosures. This, if true, would be extraordinary, because it would mean that everyone else is going several orders of magnitude further over and above in spite of the cost and difficulty purely out of the goodness of their hearts, we guess. They also say that they hired some guy to write up a 24-page set of rules allowing McKinsey to average just five disclosures against everyone else’s 117, which given that it came last year seems a bit of ex post facto rationalizing, but whatever. They also say this:

“His purpose remains to drive us out of business,” Ms. Gay said. “There is nothing McKinsey could do to satisfy Mr. Alix.”

Which, again, is a strange and not-particularly-legal sounding argument to this non-lawyer. I mean, if your biggest competitor became that by flagrantly violating all of the rules, laws and best practices to which you faithfully adhered, wouldn’t you want to drive them out of business? And, again, isn’t that beside the point?

Certainly, some important people seem to think it’s beside the point, including to a certain extent Judge David Jones, who’s hearing the case. And even he clearly feels how those of us not named Jay Alix and not associated with McKinsey feel.

Judge David Jones, who is overseeing the Westmoreland bankruptcy, has promised a definitive written ruling on the matter at the end of the trial.

“I don’t want to ever do this again,” he said Wednesday.

McKinsey Foe Alleges ‘Game of Hide and Seek’ At Bankruptcy [WSJ]


This Is Really Only The "Second" Greek Bailout?

If you're into Greece you've probably already read all about it and if you're not I can't make you. But in brief: Greece is fixed and we will NEVER HEAR ABOUT ANY PROBLEMS EVER AGAIN. In less brief: (1) Some folks stayed up all night and produced a statement. (2) Greece's private creditors will be offered the long-anticipated opportunity to voluntarily exchange their old bonds for new bonds, which will for the most part be the same as the old bonds except for minor differences including but not limited to a greatly extended maturity (to 2042), a 53.5% reduced face amount, and a 3.6% blended interest rate. (3) If they don't voluntarily exchange, which they will because - hilariously - they've already taken accounting writedowns (and also because I guess it's better than a disorderly default), private holders will get CAC'ed, which may or may not be as bad as it sounds, but in any case at least CDS will pay out, unless it doesn't. (4) Also the public sector will do various helpful, confusing things. (5) In exchange for this, Greece will enact horrible austerity, and because no one believes that Greece will actually do that, there will be escrow accounts and what Reuters ominously calls "permanent surveillance by an increased European presence on the ground." (6) Everyone is pretty sure we'll be doing this again in six months and, look, just fair warning, I will not be writing about it then, because feh. We haven't had a serious international bankruptcy, which this pretty much is, since I started paying attention to the financial markets, two months ago, so I mostly think about insolvency from a US bankruptcy law perspective. One thing that happens in bankruptcy is that, like, really really roughly speaking, the creditors stop being creditors and become the owners. This isn't always the case but the basic playbook of US bankruptcy law is: