INDIANAPOLIS, Dec. 5, 2018 — USA Gymnastics today filed a voluntary petition for protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana. This filing will enable USA Gymnastics to continue to support its athletes, to fully operate and meet its responsibilities to the entire membership and to expeditiously resolve the claims made by the survivors of sexual abuse perpetrated by Larry Nassar.
“We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past and, through this process, seek to expedite resolution and help them move forward,” said Kathryn Carson, who was recently elected chair of the USA Gymnastics Board of Directors. “Our sport is safer and stronger thanks to the bravery of these women. The Chapter 11 filing and the expedited resolution of these claims are critical first steps in rebuilding the community’s trust.
“At the same time, the filing will allow us to continue the important work of supporting our outstanding gymnasts at all levels, including the current and next generation of Olympic hopefuls,” continued Carson. “Since joining the Board last June, I have been inspired by the commitment of our members — the administrators, judges, coaches and club owners — who work daily to foster a safe, positive and encouraging environment where thousands of young people can learn gymnastics and life skills, compete and pursue their dreams.
“We are moving forward with our plans to strengthen our organization to further support the work of our members and gymnasts,” said Carson. “We have made significant progress in implementing safety initiatives and are in the process of searching for a new CEO who has the experience to build a leadership team that will restore confidence in USA Gymnastics, and set and execute a clear vision for a successful future.”
The survivors’ claims against USA Gymnastics are covered by insurance previously purchased by USA Gymnastics, and the amount of available insurance proceeds available is not affected by the Chapter 11 filing. Apart from these insurance proceeds, USA Gymnastics has no other significant assets that could be used to pay claims. USA Gymnastics believes that the Bankruptcy Court is the best forum in which to implement appropriate procedures to equitably determine and allocate the insurance proceeds among claimants, allowing compensation to survivors to proceed more quickly than litigation filed in multiple courts around the country.
By staying all pending actions against USA Gymnastics, the Chapter 11 filing also allows USA Gymnastics to work with the United States Olympic Committee to determine the best path forward for the sport of gymnastics. “We look forward to future conversations with the USOC to demonstrate our commitment at all levels to strengthening the organization and making gymnastics the best it can be for athletes at all levels,” said Carson. “USA Gymnastics will continue with its day-to-day operations of directing and managing the sport’s business and implementing initiatives that put the safety and well-being of the athletes at the forefront.”
“All of us have the same goal of making meaningful changes for the benefit of our athletes and all members,” said Carson. “While considerable change has been made, substantial work still remains. We will continue to prioritize athletes’ safety and well-being and acting in the best interests of the greater gymnastics community.
Carson is one of eight independent and seven membership directors who were elected to a newly created Board of Directors in June 2018. The membership directors include representation for the competitive gymnastics disciplines, athletes and affiliated organizations.