Disclosing a cause of action as an asset in a bankruptcy proceeding.

Practice point: The failure to disclose a cause of action as an asset in a prior bankruptcy proceeding, when the party knew or should have known it existed at the time of that proceeding, deprives that party of the legal capacity to sue subsequently on that cause of action.

Student note: The fact that the bankruptcy petition was later dismissed does not change this result.

Case: Potruch & Daab, LLC v. Abraham, NY Slip Op 05505 (2d Dept. 2012).

Here is the decision.

Tomorrow’s issue: Making out a defamation claim.