Observations of bubbles rising near a wall under conditions of large Reynolds and small Weber numbers have indicated that the velocity component of the bubbles parallel to the wall is significantly reduced upon collision with a wall. To understand the effect of such bubble-wall collisions on the flow of bubbly liquids bounded by walls, a model is developed and examined in detail by numerical simulations and theory. The model is a system of bubbles in which the velocity of the bubbles parallel to the wall is significantly reduced upon collision with the channel wall while the bubbles in the bulk are acted upon by gravity and linear drag forces. The inertial forces are accounted for by modeling the bubbles as rigid particles with mass equal to the virtual mass of the bubbles. The standard kinetic theory for granular materials modified to account for the viscous and gravity forces and supplemented with boundary conditions derived assuming an isotropic Maxwellian velocity distribution is inadequate for describing the behavior of the bubble-phase continuum near the walls since the velocity distribution of the bubbles near the walls is significantly bimodal and anisotropic. A kinetic theory that accounts for such a velocity distribution is described. The bimodal nature is captured by treating the system as consisting of two species with the bubbles (modeled as particles) whose most recent collision was with a channel wall treated as one species and those whose last collision was with another bubble as the other species. The theory is shown to be in very good agreement with the results of numerical simulations and provides closure relations that may be used in the analysis of bidisperse particulate systems as well as bounded bubbly flows.