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

Water main break in Brentwood Bay area

A water main break is affecting homes in Brentwood Bay and the Tsartlip First Nation

Meet the Greater Victoria athletes in Red Deer for the 2019 Canada Winter Games

Players express gratitude and excitement about representing Team BC

Mount Doug thaw reveals abandoned Subaru, dog poo

Gate left unlocked in snow storm invites daredevil drivers

Unhealthy disagreement sees three First Nations chiefs take government to court

Claim and counter-claim: B.C.’s First Nations health department and administrator end up in court.

Victoria to lose $6 million in funding for new Crystal Pool

No extension for March 31 gas tax grant deadline

‘Our entire municipality is heartbroken’: Seven children die in Halifax house fire

A man and woman remained in hospital Tuesday afternoon, the man with life-threatening injuries

Greater Victoria Wanted List for the week of Feb. 19

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

B.C. man survives heart attack thanks to Facebook

A Princeton man suffered a heart attack while at an isolated property with no cell service

B.C. man sues Maxime Bernier’s People’s Party over trademark

Satinder Dhillon filed application for trademark same day Maxime Bernier announced the new party

New trial ordered over banning whales, dolphins at Vancouver aquarium

Park board’s appeal reverses previous decision that found it had no right to implement a ban

Minister says plans to fight poverty, climate change, focus of B.C. budget

The NDP said in its throne speech last week that affordability will be the hallmark of its initiatives

Make sure measles shots up to date, Public Health Agency says

Measles causes high fever, coughing, sneezing and a widespread painful rash

Bomb threats, gunfire, kidnapping: Drug war rocks Kamloops

Kamloops RCMP battles a series of violent events

Island fossil makes it to the top of the provincial list

Courtenay’s elasmosaur will be added to the official Provincial Symbols of British Columbia

Most Read