In April 2018, John Little declared bankruptcy but did not disclose assets valued at approximately $250,000 related to his fitness business. These included industrial gym equipment and personal possessions like Bruce Lee and Mike Mentzer memorabilia.
On September 10, 2020, while still an undischarged bankrupt, Little filed a lawsuit against Bramcan and its officers/directors for disposing of his assets without notice.
Little estimated the value of lost property at about $430,000 in a later affidavit but failed to inform the trustee in bankruptcy about these assets or the legal action.
Issues/Main Discussion:
The case centered on whether Little had the legal capacity to initiate the lawsuit while undischarged from bankruptcy and whether the action could be considered a misnomer that could be corrected under Rule 5 of the Rules of Civil Procedure.
Ruling:
The court ruled that Little's action was a nullity because he was an undischarged bankrupt at the time of filing, and thus, he lacked the capacity to commence the lawsuit. Only the trustee in bankruptcy had the authority to initiate such an action.
The court also rejected the argument that this was a mere misnomer that could be corrected, noting that the trustee in bankruptcy is a distinct party from Little, who had not sought to be named as the plaintiff.
Amount Awarded:
The court dismissed the action and ordered Little to pay $7,500 in costs to the defendants within 30 days.
