USA Gymnastics President and CEO Kerry Perry, middle, watches the U.S. Gymnastics Championships, Thursday, Aug. 16, 2018, in Boston. (AP Photo/Elise Amendola)

Abuse settlements force USA Gymnastics to file for bankruptcy

The organization filed a Chapter 11 bankruptcy petition on Wednesday as it attempts to reach settlements in the dozens of sex-abuse lawsuits it faces.

USA Gymnastics is turning to bankruptcy in an effort to ensure its survival.

The embattled organization filed a Chapter 11 bankruptcy petition on Wednesday as it attempts to reach settlements in the dozens of sex-abuse lawsuits it faces and to forestall its potential demise at the hands of the U.S. Olympic Committee.

USA Gymnastics filed the petition in Indianapolis, where it is based. It faces 100 lawsuits representing 350 athletes in various courts across the country who blame the group for failing to supervise Larry Nassar, a team doctor accused of molesting them.

Kathryn Carson, who was recently elected chairwoman of the board of directors, said the organization is turning to bankruptcy to speed things up after mediation attempts failed to gain traction.

“Those discussions were not moving at any pace,” Carson said. “We as a board felt this was a critical imperative and decided to take this action.”

The filing does not affect the amount of money available to victims, which would come from previously purchased insurance coverage, she said. Carson said the insurance companies “are aware we’re taking this action and our expectation is they will come to the table and pay on our coverage.”

Carson added: “This is not a liquidation. This is a reorganization.”

Read more: USOC moves to shut down USA Gymnastics after Nassar scandal

Read more: U.S. gymnastics doctor sentenced to 40 to 175 years in prison

One that USA Gymnastics hopes will buy it enough time to fend off the USOC’s intent to decertify it.

The USOC on Nov. 5 took steps to remove USAG as the sport’s governing body at the Olympic level — a step that’s taken only under the most extreme circumstances. In an open letter to the gymnastics community, USOC CEO Sarah Hirshland said “you deserve better,” and that the challenges facing USA Gymnastics were more than it was capable of overcoming as currently constructed.

Carson said the legal manoeuvring Wednesday delays the USOC’s efforts to strip its designation as a national governing body.

“We always have a dialogue going with them and intend to make it clear with them we have a lot to talk about and we want to keep that going,” Carson said.

USOC spokesman Patrick Sandusky disagreed.

“While we fully understand that USAG believes this restructuring will begin to solve deficiencies we’ve identified, the filing does not impact our Section 8 complaint and that process will move forward,” Sandusky said.

Will Graves, The Associated Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Surrey Eagles start playoffs on the road in Chilliwack

South Surrey junior ‘A’ squad back in BCHL playoffs for second time in six years

White Rock woman says blocking ‘service dog’ from transit a denial of human rights

White Rock’s Lisa Arlin says guide-dog certification is voluntary

White Rock’s Coldest Night raises $102K

390 walkers participated in seventh-annual event

Girls, women try their hand at marine rescue in Surrey

Achieve Anything Foundation, RCMSAR Crescent Beach host ‘Operation: This IS You! Saving Lives at Sea’

VIDEO: 2020 BC Winter Games wrap up in Fort St. John as torch passes to Maple Ridge

More than 1,000 athletes competed in the 2020 BC Winter Games

Two scout leaders missing near Sooke after swollen creek traps troop

Third leader and scouts located, while search continues for two leaders who’d gone for help

Snowfall warning in effect for the Coquihalla Highway

An unstable airmass is producing heavy flurries over parts of the southern highway passes

B.C.’s seventh coronavirus patient at home in Fraser Health region

Canada in ‘containment’ as COVID-19 spreads in other countries

Fraser Health warns some schools of possible COVID-19 exposure

A sixth COVID-19 patient is a woman in her 30s in the Fraser Health region who recently returned from Iran

Harvey Weinstein found guilty of sex crimes in landmark #MeToo trial

The cases against the Hollywood mogul started the #MeToo movement

Initial police report of 2015 accident was ‘inaccurate’ Langley RCMP say

Online statement issued to clarify that victim was not in the middle of the road

CRA puts focus on paper returns as tax-filing season opens

The federal tax collector expects to handle about two million paper returns this calendar year out of roughly 26 million filings

Teck withdraws application for Frontier mine, citing discourse over climate change

The Vancouver-based company said it will take a $1.13-billion writedown on the Frontier project in Alberta

Most Read