Trial lawyers specializing in personal injury and civil litigation
Claim dismissed where Bankruptcy Trustee failed to act to preserve rights
Karen Auday declared bankruptcy after losing her job with Wet Seal
Retail, Inc. She did not disclose a potential age discrimination claim
on her initial bankruptcy filing, however, and the employer used this
omission to argue that Auday's wrongful discharge claim actually
belonged to the bankruptcy trustee. Even though Auday's attorney
advised the Trustee of the pending claim within months, the Trustee did
not amend the Bankruptcy proceedings to list the
discharge/discrimination claim as an asset or to authorize her to pursue
it: on that basis the Federal Court ruled that Auday could not pursue
her claim because it no longer belonged to her. The Court did hold open
the potential to amend the complaint in the lower court to substitute
the Trustee as the real party in interest.