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

Kids help Alberni Aquarium build rockfish luminary for next exhibit

Swimming For Change takes over in time for spring break

One dead, two seriously injured in Hwy 4 crash west of Port Alberni

A man has died following a single-vehicle collision west of Port Alberni… Continue reading

Risk of ‘deadly avalanches’ leads to warning for B.C.’s south coast

Weak layer of snow on Vancouver Island, Lower Mainland could trigger an avalanche

Port Alberni council looking at nearly 4% tax increase for 2019

Policing, bridge rehabilitation and impending cruise ship visits all jostling for funding

City of Port Alberni cancels tourist train operations for 2019

Steam train to McLean Mill is out of commission for repairs; city wants to re-examine rail costs

Sell regulated heroin to curb B.C.’s overdose problem: report

B.C. Centre on Substance Use points to organized crime and money-laundering as contributing factors

Australian woman killed in avalanche while snowboarding at Whistler Blackcomb

The woman and her partner were reportedly rescued by ski patrol, but the woman died in hospital

B.C. legislature moving suspended staff controversy to outside review

Whale watching, Seattle Mariners trips billed as emergency preparedness, Speaker Darryl Plecas says

Trudeau tells Canadians to listen to clerk in SNC-Lavalin matter

Privy Council clerk Michael Wernick delivered a blunt assessment at the House of Commons justice

Mueller report looming, new attorney general in hot seat

Robert Mueller is required to produce a confidential report to pursue or decline prosecutions

Regulator’s report unlikely to settle Trans Mountain pipeline expansion battle

The Trans Mountain pipeline will remain a controversial topic both in the political ring and out

B.C. woman shares story of abuse with church officials ahead of Vatican summit

Leona Huggins was the only Canadian in the gathering ahead of a historic summit at the Vatican

Galchenyuk scores in OT as Coyotes edge Canucks 3-2

Vancouver manages single point as NHL playoff chase continues

More people signing up for compulsory vaccines

Maple Ridge mom says public tired of hearing about measles

Most Read