USA Gymnastics plan gives abuse victims settlement or lawsuit choice

By Caroline Salls

Pittsburgh, Jan. 30 – USA Gymnastics filed a plan of reorganization on Thursday with the U.S. Bankruptcy Court for the Southern District of Indiana.

Through the plan, USA Gymnastics said it is making its CGL insurance policies and the proceeds thereof available to the sexual abuse claimants and future claimants in one of two alternative ways.

To date, the organization said some of the insurers are willing to offer $215 million to resolve abuse claims and future claims.

USA Gymnastics said it is offering the holders of these claims the choice of accepting the plan payment and a $2.13 million Twistars contribution or continuing the prosecution of their claims in a non-bankruptcy forum with recovery from the organization limited to the amounts available under the CGL insurance policies.

The treatment for holders of indemnification claims, United States Olympic and Paralympic Committee claims, future claimants’ representative claims and abuse claims filed after the claim deadline will depend on whether the abuse claimants make the settlement election or the litigation election.

If the litigation election is selected, the Twistars contribution will not be a part of the plan.

Holders of general unsecured claims will be paid from existing and future revenues of reorganized USA Gymnastics. Specifically, general unsecured creditors will recover 80% on their claims, payable in equal installments on Sept. 1, 2020, Sept. 1, 2021 and Sept. 1, 2022, unless USA Gymnastics can pay these creditors in fewer than three installments.

General unsecured convenience claims will be paid in full in cash.

The Indianapolis-based gymnastics organization filed bankruptcy on Dec. 5, 2018 under Chapter 11 case number 18-09108.

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