Supreme Court Reverses Bankruptcy Claim Disclosure Ruling (3)

The US Supreme Court reversed an appeals court decision over whether a legal doctrine designed to prevent unfair litigation advantages was improperly applied when a man failed to disclose a civil claim in bankruptcy.

The high court’s unanimous decision on Thursday overturned the US Court of Appeals for the Fifth Circuit’s March 2025 ruling favoring Buddy Ayers Construction Inc. in a dispute with debtor Thomas Keathley over the application of judicial estoppel. The matter before the high court focused on whether Keathley’s failure to disclose his civil claim was inadvertent or intentional, which Keathley’s attorneys argued would determine the proper ...