“It boils down to this: A plaintiff’s failure, whether innocent or intentional, to submit a full and accurate schedule of his assets and liabilities to the bankruptcy court, including all potential claims, will result in a dismissal of the claim,” write Goldberg Segalla attorneys Marc W. Brown and Jamie R. Prisco of the firm’s Business and Commercial and General Liability Practice Groups. “These claims may be worth a lot or a little, but either way, a plaintiff’s surreptitious actions will carry severe consequences.”

In this article for Law360, the pair explore the myriad reasons both plaintiffs’ and defense counsel should be aware of a plaintiff’s bankruptcy history — and why the question needs to be asked as soon as possible; for defense counsel, “questioning…can be done before the deposition stage of discovery,” they write. “This question should also extend to spouses in light of communal property and derivative claims.”

“While properly scheduled estate property that has not been administered by the trustee normally returns to the debtor when the bankruptcy court closes the case, undisclosed assets automatically remain property of the estate after the case is closed,” write Marc and Jamie. “However, some plaintiffs — who understand the consequences of disclosing their civil action and “losing” their recovery to their creditors — are willing to take their chances and hope that the defendant’s counsel does not ask the all-important question.”

Read the article here:

• “Why a Plaintiff’s Bankruptcy History is Important,” Law360, September 1, 2016 (subscription required)