Bankrupt Small Business Can Nix Harassment Suit, Court Says

An Idaho trucking company using a type of bankruptcy meant for small businesses can permanently block a sexual harassment complaint, a bankruptcy appellate panel ruled.

Nampa, Idaho-based Off-Spec Solutions LLC can discharge the sexual harassment suit brought by former employee Kristina Jayn Lafferty under the bankruptcy section meant for small businesses known as Subchapter V, according to the opinion published Thursday by the US Bankruptcy Appellate Panel of the Ninth Circuit.

In a matter of first impression, the panel found that corporations using Subchapter V of Chapter 11 can discharge creditor claims, such as intentional torts, while individuals under the ...