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

Marcus Walker looks foward to playing his first game with the VIU Mariners men’s soccer team. (Submitted photo)
Qualicum Beach soccer standout will have to wait to make PacWest debut

Walker eager to play first game with VIU Mariners

Adam Walker. (Submitted photo)
Qualicum Beach voters wait to see if they must return to the polls

Byelection could be required if councillor wins seat as MLA

RCMP. (Phil McLachlan - Black Press Media)
Parksville man faces charges after incident at car dealership in Duncan

Police were alerted to suspected break-and-enter in progress

(Black Press file photo)
Parksville Qualicum Beach crime report: Bank discovers counterfeit Canadian currency

Oceanside RCMP received 249 complaints in one-week period

Jordan Jay Ward, 20, is wanted Canada-wide for manslaughter. (Calgary police photo)
UPDATE: ‘Suspicious’ man seen in Parksville woods not manslaughter suspect

Hikers say he resembled Jordan Jay Ward, wanted Canada-wide

Provincial health officer Dr. Bonnie Henry arrives for briefing on the COVID-19 situation, B.C. legislature, Oct. 26, 2020 (B.C. government)
B.C. records 217 more COVID-19 cases, mask use urged

Infection spike continues, 21 senior facilities affected

An elderly woman wearing a face mask to curb the spread of COVID-19 walks past an advertisement for a television series in Vancouver, B.C., Sunday, Aug. 30, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. has been under a COVID-19 state of emergency for more than half the year

Province has been under a state of emergency for 32 weeks – and counting

Los Angeles Dodgers celebrate after defeating the Tampa Bay Rays 3-1 to win the baseball World Series in Game 6 Tuesday, Oct. 27, 2020, in Arlington, Texas. (AP Photo/David J. Phillip)
L.A. Dodgers beat Rays 3-1 to win 1st World Series title since 1988

National League champs claim crown in six games

Seven-year-old Aaliyah Rosa was found dead in an apartment in Langley in July. (Langley Advance Times files)
Child’s body cold, no pulse: Off-duty cop testifies in Langley mother’s murder trial

The seven-year-old girl’s mother faces a first-degree murder charge

A picture of John taken at Children’s Hospital Vancouver last week. Photo courtesy, Alicia Sewid.
RCMP investigating after young boy run over by SUV in Campbell River parking lot

The seven-year-old has multiple injuries including a broken pelvis and was admitted to Children’s Hospital in Vancouver

People march during a climate strike in Montreal, Friday, Sept. 27, 2019. THE CANADIAN PRESS/Graham Hughes
Judge rejects 15 youths’ climate change lawsuit against Canadian government

Justice Michael Manson has granted the government’s motion to strike the plaintiffs’ claim

A video message from Mrime Minister Justin Trudeau was streamed to attendees at the State of the Island Economic Summit on Tuesday morning. (Vancouver Island Economic Alliance image)
Prime minister greets Vancouver Island economic summit attendees

Vancouver Island Economic Alliance conference being held virtually this week

A woman walks through check in at WestJet at Pearson International airport during the COVID-19 pandemic in Toronto on Wednesday, Oct. 14, 2020. THE CANADIAN PRESS/Nathan Denette
Strong support for pre-flight COVID testing ahead of upcoming WestJet trial: YVR

Airport is partnering with UBC, which is helping choose the method of pre-flight testing

Most Read