Foreign banks filed a claim against a bankrupt, not within the bankruptcy case, contending fraud and imposed a lien on companies' assets owned by the bankrupt. Later, the parties executed a compromise agreement but the trustee in the bankruptcy case demanded to cancel the compromise agreement, contending that a bankrupt may not sign such an agreement without the trustee.
The Supreme Court held that the trustee is estopped from contending against funds paid under the settlement agreement when the trustee did not take action on time, by virtue of the principle of good faith and estoppel, under which a person may be estopped from raising certain contentions where his conduct is deemed abuse of legal proceedings. The trustee was aware of the claim against the bankrupt but did not act on real-time and thus may not later contend against it.