Just as he had threatened, Wright pursued his lender liability claims. However, accepting these operative facts as true does not dispose of the quasi estoppel defense. The state claims that Wright's cooperation in the recovery of bankruptcy estate assets is not consistent with his later pursuit of his lender liability claim. We are unwilling to hold that a cooperative debtor is to be penalized for such conduct. That argument aside, the fact remains that while Wright successfully discharged the bulk of his debt to the state and other creditors in the bankruptcy proceeding, he retained the apparent right to pursue damages against the state in state court, immune from state recourse against him.
Material consequences flow from that result.
Wright's lender liability claims against the state are inextricably interwoven with the state's borrower liability claims against Wright. When the state sued Wright to collect on the defaulted loans, Wright responded by filing a Chapter 11 bankruptcy proceeding. But for that petition, Wright would have been required to file his lender liability claims against the state as compulsory counterclaims in the state court proceeding. Failure to do so would have precluded Wright from later pursuing those claims in another proceeding. Wright effectively circumvented compulsory joinder requirements, and the orderly resolution of all claims arising out of the same transaction or occurrence, by his resort to the bankruptcy proceeding and failure thereafter to pursue his lender liability claims within the context of the bankruptcy proceeding.