CSI Worldwide, LLC v. Trumpf, Inc., No. 19-2189 (7th Cir. 2019)

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Trumpf, the U.S. subsidiary of an international business, hired Lynch to handle Trumpf’s appearance at a Chicago trade show. Lynch subcontracted with CSI for some of the services. CSI claims that it told Trumpf that it was unsure of Lynch’s reliability and that Trumpf agreed to pay CSI directly or guarantee the payment. There was no written agreement between Trumpf and CSI. Lynch did not pay CSI, which claimed $530,000 in Lynch’s ensuing bankruptcy. CSI also sued Trumpf, asserting promissory estoppel and unjust enrichment. The district court dismissed, reasoning that CSI was estopped, as a result of its bankruptcy claim, from suing Trumpf. The Seventh Circuit reversed, reasoning that Lynch has not prevailed on that claim and that the claim is not inconsistent with Trumpf guaranteeing payment. Filing a claim in bankruptcy does not foreclose claims against non-bankrupt obligors, 11 U.S.C. 524(e).

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Primary Holding

Creditor's bankruptcy claim does not foreclose claims against non-bankrupt obligor on the same debt.

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