In a recent Tenth Circuit case, Queen v. TA Operating, LLC, the Court held that judicial estoppel barred the lawsuit of debtors who sought to recover damages that exceeded the amount disclosed in bankruptcy proceedings. This decision would likely apply to employment litigation as well. In light of the Court’s holding, defendants who are sued by plaintiffs who have filed for bankruptcy should determine whether the plaintiff failed to disclose the existence of the lawsuit or represented in bankruptcy proceedings that the lawsuit’s value was lower than that claimed in the litigation. If so, there may be a basis to move for dismissal of the case based on the doctrine of judicial estoppel.
Read more in our recent Client Alert.