Legal Question in Bankruptcy in Florida

Disposition of Claims Against Others

A sole proprietorship owner seeks the protection of bankruptcy through the courts because of an inability to repay personal and business debts. The business has claims against others that caused the financial duress this owner now faces, and litigation has begun. The claims are well-documented and substantiated by expert review, and the likelihood of an eventual award are excellent. Recovery is also very good to excellent should the business owner prevail.

The question is two-fold. First, is this claim considered an asset of the business or business owner that needs to be disclosed at the time of filing? And, if it is not disclosed and later an award results from this litigation, how would award be treated?

Second, if the claim is considered an asset (or potential asset of the business or business owner), then would the bankruptcy court pursue the claim on behalf of the debtor and for the benefit of the creditors?

Finally, if other claims were contemplated by the debtor, but these have not been initiated at the time of filing, do these claims become potential assets if later the debtor were to begin action? And, if there is an award from this action how would that be treated?

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