Intersection of Bias
Failure to Include Suit
on Bankrupt's List of Assets
Loses Rights to Claim
Connie Becker lost her job at Verizon and sued for age, race, and ADA discrimination in federal court (without the services of an attorney). Three months later she filed a petition for bankruptcy under Chapter 13 of the Bankruptcy Code.
The bankruptcy law demands that a petitioner file a sworn statement of financial condition with the bankruptcy court, including all assets. The policy is that the debtor is turning over all assets and liabilities to the trustee. "The estate in bankruptcy, not the debtor [Becker], owns all pre-bankruptcy claims," the Seventh Circuit wrote. Becker neglected to include her claim against Verizon on this schedule, and a concealed asset - including the contingent proceeds from litigation - is lost
by the debtor when omitted.
The court added that even if Becker had listed the lawsuit as an asset, she had no right to it unless the trustee were to abandon it. Connie A. Becker v. Verizon North Inc., Case No. 06-2956.
When you are sued by an ex-employee, you should as a matter of course check the bankruptcy docket to see if this person has filed a petition for bankruptcy, and then investigate the completeness of the disclosures filed in the case.