Justices reject “rigid” rule punishing omissions by bankrupt debtors (opens in new tab)

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 estoppel” in the lower courts, the lawsuit by Keat...