USA Gymnastics filed for Chapter 11 bankruptcy.
USA Gymnastics filed a Chapter 11 bankruptcy petition Wednesday in an effort to reach settlements in the dozens of sexabuse lawsuits it faces and to avoid 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 over 350 athletes who blame the group for failing to supervise Larry Nassar, a team doctor accused of molesting them. Nassar, 55, worked at USA Gymnastics for decades. He is serving effective life sentences for child porn possession and molesting young women and girls under the guise of medical treatment.
Kathryn Carson, the recently elected chairwoman of USA Gymnastics’ board of directors, said the organization’s goal is 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.”
John Manly, an attorney representing dozens of women who have pending lawsuits against USA Gymnastics, chastised the organization for continuing to “inflict unimaginable pain on survivors” and encouraged law enforcement officials to “redouble” their investigative efforts.
“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,” Manly said in a statement. “The leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt.”
The chaos has led the USOC to initiate the process of removing USA Gymnastics as the sport’s national governing body at the Olympic level. Carson said the legal maneuvering Wednesday delays the USOC’S efforts to strip its designation as a national governing body.
The effects of Wednesday’s filing reach many communities, including North Texas.
Michelle Simpson Tuegel, the Dallasbased attorney for two area gymnasts, Kennedy Baker and Alyssa Baumann, called the filing “frustrating because it creates a delay” in court proceedings.
Baker, 22, and Baumann, 20, recently filed separate lawsuits against USA Gymnastics and several other defendants alleging that USA Gymnastics failed to prevent them from being sexually abused by Nassar, who is also named as a defendant, along with other organizations.
Simpson Tuegel said that even with USA Gymnastics in bankruptcy, plaintiffs would still get settlements from insurance policies but that plaintiffs are looking for more than just money.
“They’re looking for answers,” Simpson Tuegel said, adding that depositions taken to this point have provided some answers.