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

Eckville Atom 1 Eagles on to zone finals

The Eagles defeated Millet 9-5 to push them through to the final round of provincial playdowns

WATCH: Ice racing on Sylvan Lake draws a crowd

The Alberta Oval Ice Racing championship series was held in Sylvan Lake over the Family Day weekend

Let the Games begin!

Team Alberta takes home gold and silver in speed skating on day one

WATCH: Historic night in Red Deer as 2019 Canada Winter Games kicks off

Star-studded Opening Ceremony features athletes from across Canada

Athletes’ medals unveiled at the official kick-off of 2019 Canada Winter Games

Medals depict Central Alberta landscape and pay tribute to First Nations

‘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

Alberta’s Pascale Paradis earns bronze in 7.5 km Female Biathlon

Canada Games action carries through to March 2nd

Alberta investing $3.7B to move oil by rail, leasing cars

4,400 leased railway cars will move up to 120,000 barrels of oil per day by 2020

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

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

Alberta earns three medals in Long Track Speed Skating

Alberta now has 16 medals (6-5-5) and currently sits in second place of the medal standings

Payless to close 248 Canadian stores, saying it’s ‘ill-equipped’ for market

The company will begin closing stores at the end of March

Team Alberta takes exciting victory in wheelchair basketball, remains undefeated

After three games in the tournament, Alberta is sitting in first place of its pool

UPDATED: ‘Violent’ B.C. man back in custody after Alberta arrest

Prince George man with ties to Vernon was being sought by police

After a week away, SNC-Lavalin questions await MPs returning to Parliament

Two have resigned already: Jody Wilson-Raybould was veterans affairs minister and Gerald Butts was Trudeau’s principal secretary

Most Read