As the district is ‘now’ bankrupt, no monies can be parceled out to pay the claim.
Then reincorporate the school district as a ‘new’ district with no association with the ‘bad’ old district... and rehire all the teachers and administrators.
See, lawsuit problem solved!
And as a future benefit, people will be less likely to sue, now that precedence is set. (ie - no money even if you win)
Thats what insurance policies are in place for.