Threat in the workplace and ADA

My sister encountered an interesting situation at work. She worked for a manager who tormented his employees in fact when she joined the team two members of the team left to pursue other opportunities at the company due to the manager's lack of professionalism. Two new employees joined the team to replace the two who left. The manager caused a conflict between my sister and one of the new employees that the manager got along with and then requested a conflict resolution meeting. At the conflict resolution meeting, the new employee pulled a knife on my sister and looked at her and then at the knife as a means of intimidating/threatening her. First, she sent an email to the employee and her manager noting her discomfort and fear as result of the employee pulling the knife. Then, she reported this incident to HR immediately and the company police. They (HR) contacted her manager and he claimed that he did not see the employee pull knife. Luckily, the company police found the employee with the knife matching the description that my sister gave. However, the employee told the campus police that he used the knife to remove a thread from his pants and that's why he produced the knife during the conflict resolution meeting even though my sister insisted before and after he was found that he never opened the blade of knife. They believed him and told him not to bring the knife back to work because it was in direct violation of the company policy and put a note of this in his HR file. My sister has had all types of medical problems since this incident has occurred such as migraines, panic/anxiety attacks, depression, nausea, dizziness, insomnia. She has not been back to work since and is not sure what to do. She did file a incident report with the local police and is considering filing a restraining order against the employee as well.

What are her rights? Does she have to return to work in what she deems as an unsafe work environment? How could HR close the investigation in less than 3 hours based upon the knife-welding employee's statment? Can the employer fire her while she is out on short-term disability?
What is your recommendation?

I should also mention that she requested a transfer and it was brushed off by her employer with the suggestion that she come back to work and sit down with the employee to "air any outstanding issues."

My sister feels that in a post 9/11 era no one can assure any one else of his or her personal safety. How can the employer not treat this obvious threat seriously?

Please respond as soon as convenient as I look forward to hearing from you.

Best regards,

Kennedy