Costs From Nassar Scandal Likely To Exceed $500 Million For Michigan State, ‘WSJ’ reports


The financial fallout from Larry Nassar’s sexual abuse allegations will likely exceed half a billion dollars for Michigan State University, according to The Wall Street Journal. Legal experts estimate the cost to be twice as much as the Pennsylvania State University scandal. The estimate, according to the report, includes about 250 victims, legal fees associated with an army of law firms representing the university, and fines.

The settlements of the victims could account for more than $400 million, based on precedents in the Penn State and Catholic Church abuse cases, according to The Wall Street Journal. Former Michigan governor and interim president of the university sees increased tuitions as a possible way of covering the costs. The school’s insurers are also expected to cover part of it. There are growing concerns that the financial burden on the university may lead to bankruptcy.”I don’t know if it would force bankruptcy (for the university) or not,” Engler said.

Lawyers and risk management experts believe that settlements could reach up to $2 million each. A minimum of 250 victims signed on as plaintiffs in civil suits in Michigan federal court against Dr. Larry Nassar, Michigan State, U.S. Gymnastics, and others. Larry Nassar pleaded guilty last year to federal child pornography and state sexual abuse charges and is serving a 60-year federal prison sentence.

The university is being investigated by the Michigan Attorney General, as well as at Congressional committees, and the U.S. Department of Education. Michigan lawmakers and the NCAA are also investigating how the abuse claims were handled by the university. Larry Nassar, 54, pleaded guilty to criminal sexual conduct in two counties in Michigan and admitted to using his trusted medical position to sexually abuse his patients under the guise of medical treatment, according to CNN.

According to NBC News, the number of Nassar’s accuses is 265, both male and female. Most of the doctor’s victims were female but Jacob Moore became the first male victim to speak out about his encounter with Nassar, CNN reports. The university said insurers have not yet reimbursed any defense costs related to the Nassar case, nor have they acknowledged that their policies cover these matters, according to The Wall Street Journal.

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