USA Gym­nas­tics filed for Chap­ter 11 bank­ruptcy.

The Dallas Morning News - - Sportsday - Staff writer Dave Tar­rant con­trib­uted to this re­port. The As­so­ci­ated Press

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.

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