Legal Updates

A trustee in bankruptcy may ignore a verdict obtained under fraud, conspiracy or undue process

January 29, 2017
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A Court validated a settlement agreement between a debtor and a creditor. About sixteen years later, when a trustee in liquidation of the debtor recognized such verdict, the debtor argued that the creditor was represented by the wife of another judge at the same Court the verdict was given.

The Supreme Court dismissed the claim and held that although the relationship between the judge and one of the parties or their representors may justifies the use of the trustee’s authority to ignore a verdict, in this case there was no justification to do so, both because the debtor did not bring forward any proof of actual existence of a conspiracy against him and because of the considerable delay in raising this argument without any good reason, especially as the verdict was given by agreement of the debtor himself, while he was represented in the proceedings, and when the fact of the family’s relationship between the creditor's attorney and the judge's colleague was known to all