USA Gymnastics has filed for bankruptcy. The Associated Press reports today that the organization filed for bankruptcy under Chapter 11 in an effort to pay for lawsuits in its ongoing sex abuse scandal, as well as to delay decertification.
USA Gymnastics Made Announcement
USA Gymnastics announced the news on its website. Its press release states it filed in bankruptcy court in the Southern District of Indiana. In addition, the press release makes clear the filing is a direct result of the sex-abuse scandal and lawsuits regarding former coach Larry Nassar. “This filing will enable USA Gymnastics to continue to support its athletes, to fully operate and meet its responsibilities to the entire membership and to expeditiously resolve the claims made by the survivors of sexual abuse perpetrated by Larry Nassar.”
Carson: Filing Is “Crucial First Step”
Kathryn Carson, the newly elected chair of USA Gymnastics board of directors, is quoted in the press release:
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“We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past and, through this process, seek to expedite resolution and help them move forward.”
“Our sport is safer and stronger thanks to the bravery of these women. The Chapter 11 filing and the expedited resolution of these claims are critical first steps in rebuilding the community’s trust,” she says.
Sex Abuse Claims Covered By Insurance
The press release also states that sex abuse survivors’ claims are all covered by insurance that USA Gymnastics previously purchased, but adds that they have no other assets they could use to pay claims. “Today’s bankruptcy filing by USA Gymnastics was the inevitable result of the inability of this organization to meet its core responsibility of protecting its athlete members from abuse,” said John Manly, in a statement according to the Indianapolis Star. Manly represents some victims in the sex abuse scandal. The Star also led the investigation which led to Nassar’s downfall.
Chapter 11 Filing Follows Nassar Convictions
As the Indianapolis Star reports, the Chapter 11 filing comes more than two years after news broke that Nassar molested more than 500 girls and women beginning in 1992. Nassar, now a convicted serial child molester, is serving lengthy sentences in the crimes. As far as its standing as an athletic organization, the Chapter 11 filing will let USA Gymnastics to continue to work with the United States Olympic Committee “to determine the best path forward for the sport of gymnastics.”
