Glenn Agre Bergman & Fuentes prevailed on behalf of its client Virginia “Jean” Molino as a defendant in a recently dismissed RICO lawsuit brought by Jay Alix in the U.S. District Court for the Southern District of New York. The suit claimed that McKinsey & Co, Inc. misled bankruptcy courts about conflicts of interest when seeking approval to perform lucrative work on corporate restructurings. Ms. Molino, who was named as an individual defendant, is the former longstanding general counsel of McKinsey.
The lawsuit, brought by AlixPartners founder Jay Alix against McKinsey and others, alleged misconduct in connection with restructuring work performed in 14 bankruptcies dating back to 2001. The case raised important issues as to causation in RICO actions, the scope of the RICO statute, and the disclosure requirements in bankruptcy court.
In the court’s decision, U.S. District Judge Jesse Furman concluded that Mr. Alix lacked standing to sue under the RICO Act because AlixPartners, the consulting firm he founded and partially owns, never assigned him that right. Judge Furman highlighted that the court did not reach its conclusion lightly given that it comes after six years of litigation, including two motions to dismiss and one appeal, but that dismissal was nevertheless required. The court also found that it “It is not clear whether Alix and AlixPartners were merely careless in drafting the assignment or if they tried to play fast and loose in an effort to permit Alix to seek relief while shielding AlixPartners from the risks and obligations that would fall on a party to a federal case,” and proceeded to grant the joint defense group’s motion to dismiss the case.
The Glenn Agre team, led by partners Jed I. Bergman and Olga Lucia Fuentes-Skinner, included associates Evan McCants-Goldman, and Eric Wang.
