In re: Knight-Celotex, LLC

Federal 7th Circuit Court
Civil Court
Citation
Case Number: 
No. 11-3588
Decision Date: 
September 5, 2012
Federal District: 
N.D. Ill., E. Div.
Holding: 
Affirmed
In bankruptcy proceedings involving corporate entity, as well as principal owner of said entity, in which law firm represented individual who was Trustee for both corporate entity and principal owners in their bankruptcy petitions, Bankruptcy Ct. did not err in rejecting principal owner's objection to Trustee assigning to creditor claims that corporate entity had lodged against principal owner, even though principal owner argued that Trustee was judicially estopped from making said assignment. While principal owner contended that Trustee had disavowed said claims against him prior their assignment since, according to principal owner, approval of law firm's retention agreement signaled that Trustee held no interests adverse to principal owner based on certain representations made by law firm in retention agreement application, Ct. found that judicial estoppel did not apply since Trustee never explicitly disavowed said claims against principal owner or expressed any interest in abandoning said claims. Moreover, Ct. noted that all parties were aware of Trustee's continued interest in said claims at time of law firm's retention agreement application.