USA Gymnastics files for Chapter 11 bankruptcy as abuse claims pile up
USA Gymnastics, the beleaguered national governing body for the sport, has filed for Chapter 11 bankruptcy as it bids to address an existential crisis triggered by sexual abuse claims against its former team doctor Larry Nassar, and its alleged complicity and failure to take action over them.
The governing body said that filing for bankruptcy “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 [pictured].”
Kathryn Carson, its chair, told reporters: “Our organisation is a financially solid going concern, but for the hundred lawsuits that we do have out there. That is the primary reason that we made this filing, to use the Chapter 11 process as a vehicle for resolving those claims.”
It added that the bankruptcy court is the “best forum” for the allocation of insurance payouts among claimants, who should receive compensation sooner.
However, John Manly, an attorney whose firm represents around 150 of Nassar’s victims, claimed that the opposite was true, saying: “This bankruptcy filing will suspend all lawsuits by Nassar survivors and their ongoing efforts to discover the truth about who at USA Gymnastics and the US Olympic Committee knew about Nassar’s criminal conduct and failed to stop it.”
USA Gymnastics said the move would enable it to work with the US Olympic Committee to determine the best path forward. Carson said: “We look forward to future conversations with the USOC to demonstrate our commitment at all levels to strengthening the organisation and making gymnastics the best it can be for athletes at all levels.
“USA Gymnastics will continue with its day-to-day operations of directing and managing the sport's business and implementing initiatives that put the safety and well-being of the athletes at the forefront.
“All of us have the same goal of making meaningful changes for the benefit of our athletes and all members.
“While considerable change has been made, substantial work still remains. We will continue to prioritise athletes' safety and well-being and acting in the best interests of the greater gymnastics community.”
However, the USOC, which has begun proceedings to revoke USA Gymnastics’ recognition as the national governing body for the sport, reacted cautiously to the move, saying: “We are aware of USA Gymnastics bankruptcy filing and we are reviewing the filing. Financial stability and viability are essential for a national governing body to operate in the best interests of the athletes.
“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 USOC said last month that the decision to disband USA Gymnastics “was taken after the organisation stumbled from one crisis to the next as it struggled to rebuild after the Nassar abuse case, the worst scandal in US Olympic history.”
The USOC’s patience finally snapped after Mary Bono stepped down after just four days as interim president and chief executive of USA Gymnastics, in a new humiliation for the hapless governing body.
This came after it emerged that Bono had worked for the law firm that advised the gymnastics federation during the period in which it was accused of having covered up the scandal.
The previous month, Kerry Perry quit as chief executive of USA Gymnastics, after months of criticism for failing to take tangible action in helping the organisation recover from the controversy.
The USOC said in its statement responding to the Chapter 11 filing: “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 organisation 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 was sentenced to up to 300 years in prison in two separate trials in Michigan last February after more than 350 women testified about abuse at his hands.