USA Gymnastics turns to bankruptcy to resolve Nassar victim claims

By Caroline Salls

Pittsburgh, Dec. 6 – USA Gymnastics filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the Southern District of Indiana.

According to a news release, this filing 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.

“We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past and, through this process, seek to expedite resolution and help them move forward,” USA Gymnastics board of directors chairman Kathryn Carson said in the release.

“The Chapter 11 filing and the expedited resolution of these claims are critical first steps in rebuilding the community’s trust.

“We are moving forward with our plans to strengthen our organization to further support the work of our members and gymnasts. We have made significant progress in implementing safety initiatives and are in the process of searching for a new CEO who has the experience to build a leadership team that will restore confidence in USA Gymnastics and set and execute a clear vision for a successful future.”

USA Gymnastics said the survivors’ claims are covered by insurance, and the amount of available insurance proceeds available is not affected by the Chapter 11 filing.

Apart from these insurance proceeds, USA Gymnastics said it has no other significant assets that could be used to pay claims.

As a result, the organization said it believes that bankruptcy court is the best forum in which to implement appropriate procedures to determine and allocate the insurance proceeds among claimants, allowing compensation to survivors to proceed more quickly than litigation filed in multiple courts around the country.

By staying all pending actions against USA Gymnastics, the Chapter 11 filing also allows USA Gymnastics to work with the U.S. Olympic Committee to determine the best path forward for the sport of gymnastics.

Carson said “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.”

“While considerable change has been made, substantial work still remains. We will continue to prioritize athletes’ safety and well-being and acting in the best interests of the greater gymnastics community.”

According to court documents, USA Gymnastics has $50 million to $100 million in both assets and debt.

The organization did not list any unsecured creditors with claims of $1 million or more.

USA Gymnastics is represented by Jenner & Block LLP.

The Indianapolis-based gymnastics organization’s Chapter 11 case number is 18-09108.

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