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Woman's harassment claim is dismissed because she did not disclose it in bankruptcy

Judge McKeague authored an opinion for the Sixth Circuit, dismissing Betsy White's sexual harassment claim against Windham Vacation Ownership, Inc. and Fairfield Resorts.  He and a District Judge sitting by assignment ruled that White should be judicially estopped from suing for harassment because her claim was inconsistent with her bankruptcy pleadings.  McKeague reasoned that since the original bankruptcy  petition had not disclosed the existence of the harassment claim [as required under bankruptcy rules] it would be inconsistent for her now to claim harassment against her former employer. 

In a stinging dissent, Judge Clay pointed out that White's serious claim of improper sexual contact at work should remain viable and operate for the benefit of bankruptcy creditors and the bankruptcy estate.  He saw no viable basis in the law of equity for White's omission on the original bankruptcy petition to benefit the parties allegedly guilty of sexual harassment.

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