USA Gym­nas­tics files for bank­ruptcy in wake of Larry Nas­sar scan­dal

The Guardian Australia - - Sport -

USA Gym­nas­tics is turn­ing to bank­ruptcy in an ef­fort to en­sure its sur­vival. The em­bat­tled or­ga­ni­za­tion filed a 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 US 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 who ad­mit­ted sex­u­ally abus­ing ath­letes un­der his care. Nas­sar was given an ef­fec­tive life sen­tence for his crimes ear­lier this year. Gym­nasts, in­clud­ing Olympic cham­pi­ons Aly Rais­man and Si­mone Biles, have been crit­i­cal of how USA Gym­nas­tics treated the Nas­sar case.

Kathryn Car­son, who was re­cently elected chair­woman of the USA Gym­nas­tics board of di­rec­tors, said the or­ga­ni­za­tion is turn­ing to bank­ruptcy 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.”

USA Gym­nas­tics also hopes the move will buy it enough time to fend off the USOC’s in­tent to de­cer­tify the or­ga­ni­za­tion. The USOC took steps last month to re­move USA Gym­nas­tics 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”.

Car­son said the le­gal ma­neu­ver­ing on 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.

Si­mone Biles has been crit­i­cal of USA Gym­nas­tics’ role in the Larry Nas­sar scan­dal. Pho­to­graph: USA To­day Sports

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