Justices Question Intent in Bankruptcy Claim Disclosure Case

The US Supreme Court appeared split on the application of a legal doctrine designed to prevent unfair litigation advantages in a case surrounding a person who failed to disclose a civil claim in bankruptcy.

The justices during Tuesday oral arguments considered a decision from the US Court of Appeals for the Fifth Circuit that favored Buddy Ayers Construction Inc. in a dispute with debtor Thomas Keathley.

Keathley’s attorney Gregory Garre of Latham & Watkins LLP argued that the Fifth Circuit was too rigid in its finding because his client’s failure to disclose a claim was inadvertent.

Chief Justice John G. ...