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The In Pari Delicto Defense May Bar Trustees That Bring Claims Which Are Property Of The Estate Under 11 U.S.C. § 541(A), Carmine Broccole

Bankruptcy Research Library

(Excerpt)

The in pari delicto doctrine states that “[i]n a case of equal or mutual fault … the position of the [defending] party … is the better one.” This doctrine is guided by the premise that it is not within the purview of the court to resolve disputes among wrongdoers, and that denial of judicial relief in these instances effectively deters illegal activity. Within the bankruptcy context, “every Circuit to have considered the question has held that in pari delicto can be asserted against a trustee bringing a claim on behalf of a debtor in bankruptcy.”

Under Section 541(a)(1) of …

Bankruptcy Schedules Will Not Be Treated As Judicial Admissions In Court, Charles Akinboyewa Jr.

Bankruptcy Research Library

(Exceprt)

When an individual debtor files for bankruptcy, it must file bankruptcy schedules listing, among other things, the creditors that hold claims against the individual. The information contained on the schedules may have ramifications on the debtor and its creditors. Specifically, often debtors unknowingly fail to list certain claims, which may affect the debtor’s right to discharge a creditor’s right to a recovery. Part I of this memo discusses bankruptcy schedules and claim dischargeability. Part II illustrates the distinction between judicial and evidentiary admissions. Part III explores cases that have held bankruptcy schedules to be admissions and others that have …

Whose Claim Is It Anyway?—Direct And Derivative Claims In The Context Of Bankruptcy Litigation, Kristen M. Lasak

Bankruptcy Research Library

(Excerpt)

In bankruptcy litigation, the line between direct and derivative claims may be a thin one, and courts are often entrusted with the task of determining whether the claims creditors set forth are actually derivative of claims owned by the bankruptcy estate. Companies entering into bankruptcy proceedings have the option of creating litigation trusts, which are authorized to pursue any claims the bankruptcy estate may own. A release of claims is often part of any settlement agreement, and such an agreement combined with the ownership of claims by the bankruptcy estate, often controlled through a litigation trust, can leave defrauded …

Whether The Doctrine Of Judicial Estoppel Applies If The Debtor Fails To List A Lawsuit In His Or Her Bankruptcy Schedules, Joshua Nadelbach

Bankruptcy Research Library

(Excerpt)

Many different tactics are used by both plaintiffs and defendants to try and gain an upper hand in court proceedings. One particular scheme occurs when parties take an inconsistent position with one they successfully asserted in an earlier proceeding. The idea of the scheme is to be successful initially and then to contradict the position previously taken based on the need of the moment. To combat that particular ploy, the courts developed the doctrine of judicial estoppel.

Judicial estoppel generally refers to “judicially-imposed limitations on litigants who would assert two irreconcilable positions in successive litigations.” The purpose of judicial …

Priority Treatment Of Employee Severance Compensation Claims, Eric Small

Bankruptcy Research Library

(Excerpt)

When a bankrupt company terminates employees, those former employees often have claims against the estate for severance compensation. Sections 507(a) and 503(b)(1)(A) of the Bankruptcy Code provide for the priority treatment of such claims. Those sections apply to claims arising both pre-petition and post-petition. In the pre-petition context, courts must determine if a claim was earned within the pre-petition period prescribed by section 507(a)(4). For post-petition claims, whether such claims are given administrative expense priority for the full amount claimed turns on courts’ analysis of when the claims were earned, when services were rendered, and if and when the …

The Exclusive View V. The Non-Exclusive View: Can A Creditor’S Claim Be Dismissed For Failing To Provide Supporting Documentation?, Robert J. Ryan

Bankruptcy Research Library

(Excerpt)

May a creditor’s claim be dismissed simply because he failed to provide supporting documentation in violation of Federal Rule of Bankruptcy Procedure 3001? The answer depends on which jurisdiction the creditor is pursuing its claim in. Courts are currently sharply divided on the issue. If the creditor is fortunate enough to be in a jurisdiction which follows the “exclusive” view, which is the majority rule, the answer to this problem will be yes. However, if the creditor happens to be in a jurisdiction which follows the “non-exclusive” view, which is the minority rule, the answer to this problem will …