Justices reject “rigid” rule punishing omissions by bankrupt debtors

Justices reject “rigid” rule punishing omissions by bankrupt debtors

Yesterday’s decision in Keathley v Buddy Ayers Construction squarely rejected a “rigid” rule adopted by the lower court to punish the failure of a debtor in bankruptcy to mention one of its assets to the court.The case involves a bankrupt debtor who failed to disclose to the bankruptcy court the possibility that a car accident he was in after the bankruptcy filing might produce additional assets for his creditors. Under a rule of “judicial estop…

Clarence Thomas calls on Supreme Court to reexamine judicial estoppel, questioning its legal foundation

Justice Clarence Thomas used a unanimous bankruptcy ruling Thursday to fire a shot across the bow of judicial estoppel, a legal doctrine he says federal courts have applied broadly “without clear authority to do so.” In a six-page concurring opinion joined by Justice Neil Gorsuch, Thomas urged the Supreme Court to take up the question...