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Court approves $12.5 million claim of transgender worker in Woodbridge bankruptcy case

A transgender worker who was mistreated and ultimately fired by Woodbridge Group because she was transgender has been awarded $12.5 million. The employee, Kaila Alana Loyola, worked at Woodbridge Group of Companies LLC as a document processor. During that time, her supervisor, Lianna Balayan, did research on the internet to learn the woman's birth name and background. When she discovered that the employee was transgender, she began referring to her by her male birthname and repeatedly subjected her to cruel jokes, mockery and scorn. Company owner and President, Robert Shapiro, instructed Ms. Balayan, "no more hiring trannies." The employee was fired after ninety days of employment.

On the eve of trial, it was discovered that Woodbridge and its founder, Robert Shapiro, were being sued by the Securities and Exchange Commission for operating a Ponzi scheme based on sales of interests in short-term loans as well as luxury real estate. Mr. Shapiro swindled more than 8,400 investors, many of them senior citizens in California and Florida, out of more than $1 billion. Woodbridge filed bankruptcy shortly after, and Mr. Shapiro was ousted from the company.

Loyola filed a $14 million claim in the Woodbridge bankruptcy. Woodbridge challenged Loyola's claim, asserting a number of defenses, including that the amount sought was out of proportion to the harm suffered, especially given that Loyola had only worked for the company for ninety days.

The parties reached a settlement of Loyola's claim for $12.5 million. Of this amount, $2.5 million was allocated to compensate Loyola for her suffering, and $10 million was awarded for punitive damages. On October 15, 2018, the Delaware bankruptcy court entered an Order approving the claim. It is believed that this is the largest settlement ever reached in a transgender harassment case.

Loyola was represented by Los Angeles based employment law attorneys Howard Rutten and David M. deRubertis.

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