Judicial estoppel of a debtor’s personal-injury claim

Judicial-estoppel issues often surface when a debtor a seeks to assert a claim and dispute arises about the adequacy of the debtor’s disclosures about that claim. Wal-Mart Stores, Inc. v. Parker involved a debtors personal-injury claim, and the Fifth Circuit concluded: “After declining to apply judicial estoppel and thus allowing Parker to proceed with his personal injury suit against Wal-Mart, the bankruptcy court ordered Parker to turn over any recovery to the Chapter 13 trustee to be administered for the benefit of creditors. In cases similar to Wal-Mart’s—when a potential defendant argues that a debtor is estopped from bringing a lawsuit for failure to disclose it to the bankruptcy court—we have held that, while a debtor may be estopped from pursuing the claim on his own behalf, his bankruptcy trustee is not similarly estopped and may pursue the claim for the benefit of the creditors.” No. 18-30378 (Jan. 8, 2020). “Though the bankruptcy court’s decision is certainly odd and not the route we would have chosen, we cannot say that it contained clearly erroneous factual findings or the application of incorrect legal standards that amount to an abuse of discretion.”