Eagles win in bankruptcy trial

A federal bankruptcy court judge has ruled in favor of the Havre Eagles Aerie #166, saying a claim by KayCee Groven for nearly $300,000 stemming from a sexual assault by the Havre Eagles Club manager does not take priority in the Eagle's bankruptcy proceeding.

Bankruptcy Court Judge Ralph Kirscher ruled that Groven's claim was filed when the Havre Eagles was insolvent and that it would allow her to receive more from a sale of the Eagles' property than is allowed under federal bankruptcy law.

Kirscher heard arguments Dec. 7 in the case, and issued his ruling the end of last week.

A call to Groven's attorney, Phil Hohenloe of Helena, had not been returned by deadline this morning.

No notice of an appeal of the ruling was listed on the case on Public Access to Court Electronic Records, the online access to federal court records, as of this morning.

The Eagles filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court April 27, 2012, 10 days after state District Court Judge Dan Boucher ordered the Eagles to pay $290,780.75 to Groven, who the state had determined had been sexually harassed by Farnham.

Kirscher wrote in his opinion that the Eagles had successfully proven that they were financially insolvent at the time Boucher ordered the payment be made to Groven. The Eagles also proved, he wrote, that the property of the Eagles — it's Havre club — is collateral in a loan to the Eagles by Independence Bank, which has first priority in the bankruptcy proceeding.

A sale of the property would require first paying the debt to Independence Bank, with Groven sharing with other unsecured creditors any excess, Kirscher wrote.

He wrote that testimony in the Dec. 7 trial showed that the market value of the Eagles property, including the club itself and the Eagles' liquor license, is $132,500, with the value of the Independence Bank lien on the property $118,000, leaving approximately $14,500.

Groven filed a complaint with the state Human Rights Commission alleging the Eagles Club, her employer, had sexually discriminated against her when Farnham subjected her to a hostile work environment by inappropriately touching her and committing sexual assault against her.

The hearing officer found that Farnham had acted increasingly inappropriately from 2004, when Groven began working at the club, through her quitting her job after he sexually assaulted her in Blaine County Sept. 1, 2009, to which he pleaded guilty.

As Groven had talked to club officers and a trustee starting in 2006 asking them to stop Farnham from touching and propositioning her, the hearing officer ruled that the Eagles were liable for the work environment. The hearing officer noted that after the Havre Eagles board of trustees gave Farnham a written disciplinary warning, the national Eagles organization stepped in and Farnham was fired. The local board later rehired him as manager.