In re Kane

Citation:
United States Court of Appeals for the Third Circuit, Case No. 09-4254, In re Kane, Dec. 21, 2010
Tag(s):
Ruling:
The United States Court of Appeals for the Third Circuit held that the district court did not err in declining to exercise its discretion to impose equitable estoppel to a proof of claim filed by appellant's estranged wife in appellant's bankruptcy case. The district court did not err in finding that wife's proof of claim was not irreconcilably inconsistent with her disclosures in her own bankruptcy case and did not demonstrate a bad faith change in position with intent to deceive the court. The Third Circuit also held that, although unscheduled, wife's inchoate right to equitable distribution in divorce proceedings was property of the estate that wife had standing to pursue in appellant's bankruptcy case.
Procedural context:
Appeal from order of the United States District Court for the District of New Jersey affirming the bankruptcy court's decision not to apply judicial estoppel to a proof of claim filed by appellant's estranged wife in appellant's bankruptcy case, and the bankruptcy court's conclusion that appellant's wife has standing to pursue equitable distribution as a post-petition claim in appellant's bankruptcy case.
Facts:
Appellant and his wife instituted seperate bankruptcy cases during the pendency of a divorce action. Appellant's wife did not schedule her right to equitable distribution of marital property, but did disclose the pending divorce proceedings in her schedules and discussed her right to equitable distribution at her 341 meeting. Appellant argued that wife should be judicially estopped from pursuing equitable distribution because of failure to disclose such right in her schedules and that she lacked standing to pursue this right because it is not property of the estate.
Judge(s):
Judges Barry, Chagares, and Vanaskie

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