Keathley v. Buddy Ayers Construction, Inc. · ¶48

One of the principal justifications for judicial estoppel is that it prevents a party from using the “‘judicial process’” to “derive an unfair advantage” by taking a position in one proceeding and an inconsistent position in a separate proceeding. New Hampshire v. Maine, 532 U. S. 742, 749, 751 (2001). In bankruptcy, the “unfair advantage” a dishonest debtor gains by failing to disclose assets comes at the creditors’ expense and deprives them of potential recovery. From here, the argument goes, judicial estoppel is needed in other proceedings to deter that bankruptcy misconduct and to protect both the “integrity of the bankruptcy system” and “the rights of creditors to an equitable distribution of the assets of the debtor’s estate.” Reed v. Arlington, 650 F. 3d 571, 574 (CA5 2011) (en banc).

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