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

Call a foul on cancer with the Pink Whistle Campaign

Local basketball referees are raising money for cancer research

Man found dead identified as Andreas Pittinger

Pittinger was known locally for hosting a radio show

Biologists discover another female calf in depleted South Purcell Mountain Caribou herd

Calf will be moved to Revelstoke maternity pens, then released

Man seriously hurt after police shooting near Nelson

Incident has been reported to provincial police watchdog

Reduced spring service planned for Kootenay Lake ferry

Expected low lake levels is the reason for the longer wait times

VIDEO: Canada’s flag turns 54 today

The maple leaf design by George Stanley made its first appearance Feb. 15, 1965

Former B.C. premier Gordon Campbell accused of sexual touching

Accuser went to police, interviewed by Britian’s Daily Telegraph

Avalanche control planned tomorrow on Highway 1

The highway will be closed in the morning east of Revelstoke

Judge rules Abbotsford home must be sold after son tries to evict mom

Mom to get back down payment and initial expenses

Trump officially declares national emergency to build border wall

President plans to siphon billions from federal military construction and counterdrug efforts

Snow turns to slush, rain as it warms up across B.C.’s south coast

Some areas are already covered by more than half a metre of snow following three separate storms

Father to be charged with first-degree murder in Amber Alert case

11-year-old Riya Rajkumar was found dead in her father’s home in Brampton, Ontario

Police track armed kidnapping across Thompson-Okanagan

RCMP allege it was a targeted crime believed to be linked to the drug trade

St. Paul’s Hospital replacement slated to open in Vancouver in 2026

Announced many times, but this time there’s money, Adrian Dix says

Most Read