USA Gymnastics President and CEO Kerry Perry, middle, watches the U.S. Gymnastics Championships, Thursday, Aug. 16, 2018, in Boston. (AP Photo/Elise Amendola)

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.

Just Posted

The Sylvan Lake Gulls show off the home jerseys (white) and their way jerseys at the Gulls Media Day on June 17, before the season opener. Following the media day, the team took to the field for their first practise. (Photo by Megan Roth/Sylvan Lake News)
Sylvan Lake Gulls ready to throw first pitch as construction continues

The Gulls inaugural season kicks off June 18 with a game against the Edmonton Prospects

Alberta is now below 3,000 active cases of COVID-19, as the province reported 2,639 Wednesday. (NIAID-RML via AP)
Red Deer below 100 active COVID-19 cases for first time since March

69.7 per cent of Albertans 12 and over have at least one dose of the COVID-19 vaccine

Premier Jason Kenney says the provincial government is doing everything it can to encourage Albertans to get vaccinated. (Photo by Chris Schwarz/Government of Alberta)
Travel prizes added to Alberta’s vaccine lottery

More than 40 travel rewards available for those who are fully vaccinated

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on Friday, February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
U.S. border restrictions to remain in place until at least July 21

Safety minister says Canada, U.S. extending restrictions on non-essential international travel

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

A vial containing the Moderna COVID-19 vaccine is shown at a vaccination site in Marcq en Baroeul, outside Lille, northern France, Saturday, March 20, 2021. THE CANADIAN PRESS/AP/Michel Spingler
mRNA vaccines ‘preferred’ for all Canadians, including as 2nd dose after AstraZeneca: NACI

New recommendations prioritizes Pfizer, Moderna in almost all cases

House Majority Whip James Clyburn, D-S.C., center left, reaches over to Rep. Maxine Waters, D-Calif., joined by Speaker of the House Nancy Pelosi, D-Calif., center, and members of the Congressional Black Caucus as they celebrate the Juneteenth National Independence Day Act that creates a new federal holiday to commemorate June 19, 1865, when Union soldiers brought the news of freedom to enslaved Black people after the Civil War, at the Capitol in Washington, Thursday, June 17, 2021. It’s the first new federal holiday since Martin Luther King Jr. Day was created in 1983. (AP Photo/J. Scott Applewhite)
Biden to sign bill making Juneteenth a federal holiday

New American stat marks the nation’s end of slavery

A screenshot of the First Peoples Cultural Councils First Peoples’ Map. (First Peoples Cultural Council)
Online resource blends B.C.-Alberta’s Indigenous languages, art and culture

Advisor says initiative supports the urgent need to preserve Indigenous languages

A plane is silhouetted as it takes off from Vancouver International Airport in Richmond, B.C., May 13, 2019. THE CANADIAN PRESS/Jonathan Hayward
Report calls for airlines to refund passengers for flights halted due to COVID-19

Conclusion: federal help should be on the condition airlines immediately refund Canadian travellers

Green party Leader Annamie Paul speaks during a news conference on Parliament Hill in Ottawa on Tuesday, June 15, 2021. Paul has survived another day of party strife after a planned ouster shifted course, leaving her with a tenuous grip on power ahead of a likely federal election this year. THE CANADIAN PRESS/Justin Tang
Green Leader Annamie Paul blasts ‘racist,’ ‘sexist’ party execs who sought ouster

Fallout has continued, with two of the federal council’s members resigning

Most Read