The Bankruptcy Code is intended to address financial insolvency and debt restructuring, not to provide justice or compensation for personal injuries and emotional trauma. However, organizations facing large-scale childhood sexual-abuse claims have increasingly been relying on the chapter 11 process to obtain justice.

The legal focus in chapter 11 cases is on the debtor. Left in the wake of these cases are victims of sexual abuse who lose an opportunity to try their case before a jury of their peers because of the Code’s automatic-stay provisions. They typically watch their tortfeasor avoid its day of reckoning, and they receive a small fraction of what they are entitled to under state law. As the system now stands, it is bad for the victims and for the public good.

Click here to view the full article