USA Gymanstics Files For Bankruptcy As They Face Larry Nassar Sex Abuse Lawsuits

A stock photo of a gymnast's hands on uneven bars
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USA Gymnastics has filed for Chapter 11 bankruptcy, a move that stems from the organization’s attempt to survive the onslaught of lawsuits connected to the Larry Nassar sexual abuse scandal.

“We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past,” said Kathryn Carson chair of the USA Gymnastics board of directors, ESPN reports.

The lawsuits against the sporting body allege that it did not report abuse claims against Nassar by gymnasts. According to ESPN, dozens of these lawsuits have been filed and efforts at mediation have not brought them any closer to a settlement.

The bankruptcy filing reveals the enormity of USA Gymnastics’ financial challenges. The statement from Carson states that the organization owns $50 million and $100 million in assets but that their liabilities are also within that range. Insurance policies will pay for the cost of the lawsuits, however, as they are exempt from the bankruptcy proceedings.

Before he was sentenced to 40-175 years in prison for sexually abusing his patients, Larry Nassar was USA Gymnastics’ national medical coordinator. Some of his victims included Olympic gold-medal winners like Aly Raisman who recalled her experience in court.

As mentioned earlier, many have accused USA Gymnastics of abdicating its responsibility to protect its gymnasts from Nassar. As CNN notes, he was a respected physician in his field who had been called the “body whisperer” because of his “close relationships” with the athletes under his care.

“The leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt,” John Manly, an attorney whose clients include several of the gymnasts who have filed lawsuits against the organization.

“They have inflicted and continue to inflict unimaginable pain on survivors and their families. They are incapable of meeting their obligations as an Olympic governing body.”

As the Independent notes, in October former USA Gymnastics CEO Steve Penny was arrested for allegedly tampering with evidence related to the crimes of Larry Nassar. He was indicted by a grand jury in Texas. If convicted, Penny could serve 2 to 10 years in prison and a fine of up to $10,000. The documents that he’s accused of destroying have never been found.

Perry stepped down from the CEO job in 2017. Two successive replacements have resigned as well.

The statement from USA Gymnastics about the bankruptcy news calls it a reorganization and not a liquidation, ESPN reports. However, a spokesman from the U.S. Olympic Committee has said that it will not impede the moves it has made to decertify the governing body for gymnastics.