Canada’s ambassador to China, Dominic Barton, has vehemently rejected allegations he tried to bribe a former rival in the area of bankruptcy turnarounds to stop making complaints about his former company, McKinsey and Co.
In a videotaped deposition played in a Houston court on Thursday, Mr. Barton pushed back against accusations that have arisen in a proceeding that will determine whether McKinsey and Co., the firm he ran for nine years, violated U.S. bankruptcy laws.
Mr. Barton, who was named Canada’s envoy to Beijing last September, has been drawn into a battle between McKinsey, the world’s largest management consulting firm, and Jay Alix, the billionaire founder of AlixPartners, which made a name for itself as a specialist in turning around bankrupt or near-bankrupt companies.
Mr. Alix has alleged in court that McKinsey improperly concealed potential conflicts when it sought court approval to advise companies dealing with bankruptcy.
The Michigan businessman has also alleged that Mr. Barton failed to take corrective action after he brought the matter to his attention in 2014.
And he has accused the former McKinsey managing partner of offering to steer consulting business to AlixPartners during a conversation, a proposal Mr. Alix said he saw as a bribe intended to silence him.
On Thursday, Mr. Barton reacted angrily when asked about this allegation.
“The idea that I am somehow going to do a quid pro quo is just complete horseshit,” Mr. Barton said in his deposition. “It really upsets me.”
Mr. Alix has pursued McKinsey and Mr. Barton in courts throughout the United States for the past three years. He acquired a financial stake in several companies, including Westmoreland Coal Co., for which McKinsey has acted as a bankruptcy adviser, and has sought standing as a creditor, arguing in court that the consulting firm did not properly disclose potential conflicts.
Asked why he suggested he could help Mr. Alix’s firm seek work with Volvo and Australia’s Fortescue Metals Group Ltd., Mr. Barton said he was merely suggesting the Michigan businessman refocus his efforts away from repeatedly raising concerns about McKinsey’s practices.
There was nothing in the conversation to suggest "that I’m trying to buy him off,” Mr. Barton told Mr. Alix’s lawyer, Sean O’Shea. “What I said [is] I could easily introduce you if you wanted to spend time with those people ... I got to tell you there was no quid pro.”
Mr. Barton added that it was preposterous to suggest he, as head of McKinsey, could have persuaded the firms to hire AlixPartners. He added that he picked the firms’ names “out of the air” and was driven by irritation over Mr. Alix’s fixation on McKinsey’s business practices – and that he was confident his conduct was sound.
“I was exasperated with the continual Groundhog Day [conversation about] disclosure practices,” Mr. Barton said in the deposition.
McKinsey rejects Mr. Alix’s accusations. “Jay Alix has recklessly and repeatedly made unsupported allegations of fraud and other misconduct against McKinsey,” Gary Pinkus, chairman for McKinsey in North America, said in a statement.
McKinsey’s legal team in this dispute includes John Gleeson, a former judge and U.S. lawyer known for prosecuting Mafia cases, such as that of Gambino family boss John Gotti. Later, as a New York district judge, Mr. Gleeson oversaw the prosecution of former stockbroker Jordan Belfort, the self-styled “Wolf of Wall Street” made famous in a Hollywood film.
Mr. Barton acknowledged that Mr. Alix repeatedly told him McKinsey violated bankruptcy laws.
Mr. Alix has said Mr. Barton promised to get out of the bankruptcy business and later reneged. But Mr. Barton denied he said that.
After discussions with McKinsey’s chief legal counsel, Mr. Barton said, he later told Mr. Alix the consulting firm was not breaking bankruptcy laws.
“We want to obey the law. We are not trying to get away with things,” Mr. Barton told the court under oath.
The court has also heard that McKinsey destroyed some of Mr. Barton’s e-mails relating to the litigation. Notes taken by a senior McKinsey official of a Sept. 3, 2104, meeting between Mr. Alix and Mr. Barton were also destroyed.
Lawyers for Mr. Alix had obtained a litigation order requiring McKinsey to keep the e-mails. McKinsey said they were erased as part of the company policy to wipe e-mails that have been in the system for two years or more.