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

Regional unemployment rate drops

But fewer people are working overall

Competition and camaraderie

The tables were turned on one hockey mom: ‘Two hands, mom! Stick on the ice! Skate! Offside!’

Coastal GasLink gets interim injunction against Unist’ot’en

The LNG pipeline company can start work Monday with enforcement approved by court.

Smithers Christmas Bird Count

Time to register for the annual bird count, an effort done across the hemisphere.

They’re engaged!

Birthday party turns into engagement party for Doug and Matilda

Story of the Year: Deadly Humboldt Broncos bus crash

The Canadian Press annual survey of newsrooms across the country saw 53 out of 129 editors cast their votes for the Humboldt Broncos bus crash.

A journey through 2018’s top pop culture moments

Was there any pop culture this year? Of course there was.

‘A stronger Alberta:’ Ottawa announces $1.6B for Canada’s oil and gas sector

Price of Alberta oil plummeted so low that Alberta’s Premier said Canada was practically giving it away

Wicked weather, including heavy snow, rainfall, hammers southern B.C.

Environment Canada has posted winter storm warnings for the Coquihalla Highway, Highway 3

Caretaker jailed, must pay back money after stealing $260K from elderly B.C. couple

Antonette Dizon, now 50, had been hired to provide extra care for Henry and Helen Abfalter

Retailers feel the squeeze of their generous return policies

Technology data tracking can clamp down on fraudulent abuse

Canadians to get low-cost data-only mobile phone plans within 90 days: CRTC

Bell, Rogers and Telus will provide plans as cheap as 250MB for $15

Man rescued from sinking boat off the coast of Vancouver Island

Mayday call came into Coast Guard saying vessel had taken on water, BC Ferries dispatched to scene

Four per cent of Canadian women report being sexually harassed in the workplace

One per cent of men report being sexually harassed in the workplace

Most Read