USA Gymnastics files for bankruptcy in aftermath of Larry Nassar scandal

USA Gymnastics has filed for Chapter 11 bankruptcy in an effort to reach lawsuit settlements connected to the Larry Nassar scandal, the organization announced Wednesday. 

USA Gymnastics today filed a voluntary petition for protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana.

The national governing body for gymnastics explained this move is an effort to expedite the processing of civil lawsuits related to the sexual abuse by Nassar, who was convicted of assaulting patients under the guise of medical treatment.

“This is not a liquidation,” chair of USA Gymnastics’ board of directors Kathryn Carson said in a statement. “This is a reorganization. … 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.”

Additionally, Carson said USA Gymnastics doesn’t have assets significant enough to settle the claims made in those lawsuits. She added insurance policies would be used to cover the cost of those claims, though the policies would not be affected by the bankruptcy claim.

“All of us have the same goal of making meaningful changes for the benefit of our athletes and all members,” said Carson. “While considerable change has been made, substantial work still remains. We will continue to prioritize athletes’ safety and well-being and acting in the best interests of the greater gymnastics community.”

USAG released its financial statements earlier this month, revealing the organization estimated it will have to pay between $75 million and $150 million to the victims of Nassar’s serial sexual abuse. In the aftermath of the Nassar scandal, some 220 gymnasts have filed lawsuits that claim the former USA Gymnastics doctor abused them. The suits have been filed in Michigan, California and Texas, naming USAG as a defendant. 

The United States Olympic Committee also released a statement Wednesday in response to USA Gymnastics’ filing acknowledging the bankruptcy claim, and said the committee is reviewing their previous effort to revoke the rights of USA Gymnastics as the governing body of the sport. 

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“We are reviewing the effects of the bankruptcy filing on the pending proceeding to revoke USA Gymnastics’ recognition as the national governing body for Olympic gymnastics in the United States,” the statement read. “As the leader of the Olympic community in the United States, the USOC is committed to fulfilling its responsibility and obligation to ensure that each organization accepted for membership as a national governing body has the capacity and capability to provide the support, protection, and services that we expect for all Olympic athletes in the United States.”

Nassar, 55, faces up to 175 years in Michigan state prison for criminal sexual conduct after more than 200 victims came forward at his sentencing hearings in January. He is currently serving a 60-year sentence in federal prison for possessing child pornography.

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