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

COVID-19. (Image courtesy CDC)
City and County of Wetaskiwin reporting active cases

Both the City of Wetaskiwin and County of Wetaskiwin have active cases.

Alberta chief medical officer of health Dr. Deena Hinshaw updates media on the Covid-19 situation in Edmonton on Friday March 20, 2020. nbsp;Alberta is reporting it's highest daily number of COVID-19 cases, with 364 new infections. THE CANADIAN PRESS/Jason Franson
Alberta confirmed 323 COVID-19 cases Tuesday

Central zone active cases at 145

COVID-19. (Image courtesy CDC)
Maskwacis reporting 37 active cases

Numbers current as of Oct. 19

Health Minister Tyler Shandro and Dr. Deena Hinshaw, the chief medical officer of health, receive flu shot. Photo via Government of Alberta
COVID-19: One more death in central zone

Ponoka County on province’s watchlist

Photo submitted/ Millet In Bloom
Town of Millet declared Best Blooming Community

The Town of Millet is being recognized for their efforts to meet the challenges of 2020.

Conservative member of Parliament Pierre Poilievre speaks during a press conference on Parliament Hill in Ottawa on October 19, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Liberals say Tory effort to set up COVID-19 committee will be a confidence matter

The Tories were originally proposing an ‘anticorruption’ committee

File photo
RCMP’s response to online discussions about anti-racism demonstrations

Ponoka RCMP Staff Sgt.’s comments misattributed online

Shaelynn Decock and her dog Taco, who has been missing since Aug. 26. Photo Submitted
Sylvan Lake woman looking for closure for her stolen dog

Shaelynn Decock says it has been two months since she last saw her dog Taco

Prime Minister Justin Trudeau is seen during a news conference Tuesday October 20, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Trudeau and his family decide against trick-or-treating this year due to COVID

Adhering to local health authorities, Trudeau urges Canadians to do their part in following those guidelines

Natural Resources Minister Seamus O’Regan responds to a question during Question Period in the House of Commons Tuesday February 4, 2020 in Ottawa. The Alberta government is welcoming news that Ottawa has approved an expansion of the Nova Gas Transmission Ltd. gathering system in Alberta — while condemning federal delays that it says cost this summer’s construction season. THE CANADIAN PRESS/Adrian Wyld
Alberta welcomes federal approval of gas pipeline expansion while criticizing delay

The project is expected to create up to 2,920 direct jobs during construction, the federal release said

A Tim Hortons employee hands out coffee from a drive-through window to a customer in Mississauga, Ont., on March 17, 2020. Tim Hortons is ending the practice of double cupping hot drinks, a move the fast food restaurant says will eliminate hundreds of millions of cups from landfills each year. THE CANADIAN PRESS/Nathan Denette
The end of double cupping: Tim Hortons ditches two cups in favour of one with sleeve

Most recycling facilities in Canada don’t recycle single use paper coffee cups because of a plastic lining

Canada’s Chief Public Health Officer doctor Theresa Tam responds to a question during a news conference Tuesday October 20, 2020 in Ottawa. Canada’s chief public health doctor says in the age of social media, fake news about the COVID-19 pandemic has been spreading faster than the virus itself. THE CANADIAN PRESS/Adrian Wyld
VIDEO: Fake news creates serious issues for battling pandemic, chief public health doc says

Both Tam and Prime Minister Justin Trudeau urged Canadians to be responsible about the information they share

A narwhal tusk that was donated to a Goodwill store in northwest Calgary this summer will soon be gifted to the Arctic Institute of North America (Hesam Rezaei)
Narwhal tusk discovered in Calgary Goodwill pile to be donated to university

The tusk had federal hunting tags from 1978 attached that say animal was harvested from the central Arctic

(The Canadian Press)
Alberta-raised Cree actor lands role in Disney’s live-action ‘Peter Pan and Wendy’

Tiger Lily is featured in Disney’s 1953 animated “Peter Pan” film

Most Read