Did your consultant mislead the bankruptcy court?

That’s a serious charge.

“U.S. Watchdog Says McKinsey Misled Bankruptcy Court,” The Wall Street Journal, December 1, 2018 (online).  Did McKinsey make misleading disclosures about  what conflicts of interest it might have had?  Was a related investment unit truly separate?

The point of this post is to highlight what can happen when one of your agents (and a consultant is an agent) makes an inadequate disclosure to a court about potential conflicts in connection with your case.  Are you liable?  Is your reputation damaged?  What’s that worth?  What controls do you have to prevent conflicts of interest by your consultants, and how do you police those controls?

Of course, you wouldn’t fail to disclose such a conflict yourself.

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Filed under Controls, Corporation, Duty, Duty of Care, Governance, Information, Internal controls, Third parties, To report, Vendors

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