It’s not everyday that the United States Supreme Court issues a decision directly on point for insurance investigators. But that’s exactly what happened in Keathley v. Buddy Ayers Construction, Inc.
First, the Court advised that a discrepancy in a past bankruptcy proceeding will not automatically amount to judicial estoppel. Importantly though, the court didn’t stop there. In mandating a fact-specific inquiry when evaluating discrepancies or omissions in a bankruptcy proceeding, the Court used a totality of the circumstances approach where relevant facts and circumstances are reviewed on a case-by-case basis.
In our opinion, this decision demonstrates that the SIU mandate has been validated by our nation’s highest court, reinforcing not only the importance of a thorough consideration of all the facts surrounding a past bankruptcy filings (ownership, assets, valuation, business operations, occupancy, or other material facts), plus the SIU mandate overall.
Questionable claims warrant detailed investigation. In short, Keathley validates what many SIU professionals already know: success often depends not on finding the discrepancies, but on thoroughly investigating and documenting the reason for those discrepancies in order to develop a detailed factual record.
Read the opinion here.
This post was originally published through Horst Krekstein & Runyon’s Property in 60 Seconds Newsletter. If you would like to receive future copies of that newsletter, please use this link to sign up.