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Emory Bankruptcy Developments Journal

Abstract

This Comment addresses the application of judicial estoppel to dismiss a debtor’s civil or administrative claim when the debtor fails to list his claim on the required schedule. Part I of this Comment analyzes the general concept of equity and the principles underlying judicial estoppel. Part II analyzes equity and judicial estoppel through the lens of the bankruptcy system. Part III presents my proposed test to determine when it is appropriate for courts to invoke judicial estoppel to dismiss a debtor’s undisclosed claim when the trustee has decided to abandon it after it has been discovered. This test considers four factors: (1) the legal sophistication of the debtor; (2) the events prompting disclosure; (3) whether there was any showing of inadvertence or attempts to disclose the claim; and (4) the reasons underlying the decision for the trustee to abandon the claim once discovered. The Comment concludes that a strict approach, as advocated by the proposed test, is the best way to protect the integrity and promote the efficient functioning of the bankruptcy system.

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