Question: What happens when a Chapter 7 debtor:

• fails to disclose the existence of claims against third parties;
• receives a Chapter 7 discharge and a closing of the Chapter 7 case;
• then, pursues the undisclosed claims by filing a lawsuit against the third parties; and
• the defendants in that lawsuit move to dismiss debtor’s claim for non-disclosure in the Chapter 7 bankruptcy?

That actually happened—and a U.S. District Court refused to dismiss the debtor’s lawsuit on summary judgment:

On September 12, 2024, the United States Court of Appeals for the Eighth Circuit reversed a trial court decision that had rejected a bank’s assertion of the in pari delicto defense to aiding and abetting claims brought by the bankruptcy trustee for a debtor that had allegedly perpetrated a Ponzi scheme. Kelley v. BMO Harris Bank Nat’l Ass’n, 2024 WL 4158179 (8th Cir. Sept. 12, 2024).

Did you know that bankruptcy trustees are now liable for capital gains tax (CGT) on the sale of real property? Section 254 of the Income Tax Assessment Act 1936 (Cth) imposes specific obligations on trustees and agents, covering income, profits, and gains of a capital nature in their representative capacity. This has recently taken on new importance for bankruptcy trustees.

What has changed?

A new, bipartisan bankruptcy bill in the U.S. Senate purports, according to an official document, to:

On 9 July 2024, the Federal Court in Abdul Rashid Mohamad Isa v PTT International Trading Pte Ltd [2024] 5 MLRA 603 (“Abdul Rashid”), with a panel comprising Nallini Pathmanathan FCJ, Hasnah Mohammed Hashim FCJ and Abdul Karim Abdul Jalil FCJ, held inter alia that a Creditor’s Petition could be withdrawn without the consequences of bringing the entire bankruptcy proceedings to an end. Hurry Up

Executive Summary:

Resumen Ejecutivo:

In an opinion issued on August 16, 2024 (In re Robertshaw US Holding Corp., Bankr. S.D. Tex., Case No. 24-90052, Docket No.

The general rule is that claims of the bankruptcy estate against third parties (e.g., preference claims and tort claims) can be sold to third parties in a § 363 sale.[Fn. 1]

However, a recent opinion from the U.S. Fifth Circuit Court of Appeals discusses whether a state’s champerty law impairs a § 363 sale.[Fn. 2] 

Four U.S. Supreme Court justices (Kagan, Kavanaugh, Roberts and Sotomayor) provide the following summary of their Purdue Pharmadissent in the Purdue Pharma case.

Wrong & Devastating

Today’s five-justice majority opinion is wrong on the law and devastating for more than 100,000 opioid victims and their families: