Title VII Claim Does Not Survive Asset Transfer In Bankruptcy

In a case decided two weeks ago, the federal district court for the northern district of Indiana held that Sec. 363(f) of the Bankruptcy Code gives the court the power to approve the transfer of a bankrupt company's assets free and clear of Title VII employment discrimination claims. In Faulkner v. Bethlehem Steel/International Steel Group, 2005 U.S. Dist. LEXIS 7501 (ND Ind., 4/27/2005), the court refused to accept plaintiff's argument that his discrimination claim could be asserted against the buyers of the business under a "successor liability" theory. While this case involved a claim of racial discrimination, the same result would follow in a religious discrimination case.