USA Gymnastics files for bankruptcy in wake of sexual abuse scandal

Brendan McDermid | Reuters

Victim and Olympic gold medalist Aly Raisman speaks at the sentencing hearing for Larry Nassar, (R) a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, January 19, 2018.

USA Gymnastics filed for reorganization under Chapter 11 of the Bankruptcy Code, which will allow it to continue operating while also resolving the sexual abuse claims made by several athletes against former USA Gymnastics national team doctor Larry Nassar.

“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,” the organization said in a statement.

The athletes’ claims against USA Gymnastics are covered by insurance and the amount of available insurance proceeds is not affected by the bankruptcy filing.

“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, chair of the USA Gymnastics Board of Directors. “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.”