In a bankruptcy proceeding, is a party required to notify the debtor of a potential cause of action as a contingent asset?

MultiRegion, United States of America

The following excerpt is from Talosig v. U.S. Bank N.A., No. 2:15-cv-2433-MCE-CKD (E.D. Cal. 2016):

In the bankruptcy context, a party is "judicially estopped from asserting a cause of action not . . . mentioned in the debtor's schedules or disclosure statements." Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778, 782-83 (9th Cir. 2001). "Judicial estoppel will be imposed when the debtor has knowledge of enough facts to know that a potential cause of action exists during the pendency of the bankruptcy, but fails to amend his schedules or disclosure statements to identify the cause of action as a contingent asset." Id. at 784. The duty to disclose contingent claims continues throughout the bankruptcy proceeding. Id. at 785. Not all facts need be known before a debtor is required to notify

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