Lawsuits force USA Gymnastics to file for Bankruptcy

Money troubles for Gymnastics in the USA

One of the big news stories in the last few years has been an investigation into Larry Nassar, a doctor that was part of the United States Gymnastic organization (USAG). It was accused that he had committed sexual abuse for years against members of the US Gymnastics team, mostly against young women and girls training to one-day win medals at the biggest sporting stage in the world, the Olympics.

The USAG Logo

Soon after the word had gone public of what Nasser was doing, it became a legal issue. He was taken to court and in February of 2018 was convicted to between 40 and 125 years in prison for the abuse of nearly 256 women and girls.

Larry Nasser

Putting him in prison for the rest of his life solved the problem right? No. It didn’t

More legal action was taken, this time taken against US Gymnastics themselves, as many of the victims of Nassar’s crimes filed lawsuits saying that US Gymnastic knew the abuse was going on for many years and let it happen, putting numerous young women at risk and did nothing about it. There are a lot of victims so there is a lot of lawsuits. somewhere over 100 lawsuits.

The Olympics were following the events of the Nassar story and all that came up in the wake of his conviction. In November of 2018, the Olympics stated that they were starting to decertify USA Gymnastics as a governing body of gymnastics in the county. Meaning that the Olympics themselves would revoke USAGs say in what happens in the Gymnastics events for the Olympic games.

A male gymnast

And in turn, USA Gymnastics (USAG) filed for bankruptcy in early December.

“The leadership of USA Gymnastics has proven itself tobe both morally and financially bankrupt. They have inflicted and continue to inflict unimaginable pain on survivors and their families,” said John Manly, an attorney who represents many of the survivors of the abuses.

The financial cost in settling the lawsuits filed against hem is somewhere between $75 million and $100 million. It is being said by people representing USAG that the money is being handled by USAG insurers since the organization does not have those kinds of funds directly.

USAG filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of Indiana. Chapter 11 allows USAG to stay in business but that it will be overseen by another party to handle paying out of the debts. Unlike Chapter 7 Bankruptcy which would see USAG close immediately and their assets be sold off.

However, with the Olympics looking to remove Governing Body status, it is thought that the USAG will close anyway.

With the possible removal as a Governing Body from the Olympic Games themselves, a replacement would have to fill in eventually. If a new group comes along to fill the void and lead gymnastics in the Olympic Games and other events that are held, it is thought that members of USAG would just migrate over to the new organization and USAG would wither out of existence anyway. possibly filing for Chapter 7 Bankruptcy in that case.

Women Gymnastics team,

With the number of lawsuits and the abuses they have been convicted of, many say that outcome is for the best.

No word as of yet has been said how this will affect the next Olympics Games held in Tokyo in 2020 or any gymnastics event held by the United States until then.

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