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News > U.S.

USA Gymnastics Files for Bankruptcy, Halting Justice for Sex-Abuse Victims

  • Larry Nassar, convicted serial child molester who abused his position as the USA Gymnastics national team doctor to carry out his crimes.

    Larry Nassar, convicted serial child molester who abused his position as the USA Gymnastics national team doctor to carry out his crimes. | Photo: Reuters

Published 6 December 2018

Former national team doctor, Larry Nassar, will likely die in prison after he was sentenced up to 300 years last winter for the sexual abuse of at least 350 women.

Reeling and staggering under the gravity of lawsuits filed by hundreds of women who were sexually abused by former national team doctor, Larry Nassar, USA Gymnastics (USAG) filed for bankruptcy Wednesday.

USA Gymnastic Gold-Medalist Reveals Sexual Abuse History

Last February, Nassar pleaded guilty to charges and was sentenced to up to 300 years in prison in two different trials in Michigan after more than 350 women -- Olympic champions Aly Raisman and Jordyn Wieber among them -- testified about sexual abuse during medical examinations.

Kathryn Carson, chairwoman of the national governing body for the sport, said the decision is part of an ongoing process for resolving the sexual abuse claims against Nassar, and to do so quickly

"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," Carson said.

She says the filing does not affect the amount of money available to victims, which would come from  insurance coverage that was previously purchased. Carson added that the insurers “are aware we’re taking this action and our expectation is they will come to the table and pay on our coverage.”

However, to the contrary, the filing could complicate victim’s legal efforts to recover damages, according to an attorney representing over a hundred of the victims.

It is common practice for a bankruptcy petition to halt any litigation ad interim while the bankruptcy process unrolls in court.

Either way, it is questionable if USAG has the resources to afford the impact of the legal cases against Nassar and the organization.

The organization estimates that the lawsuits amount to between US$75 million and US$100 million, according to USAG's chief financial officer, Scott Shollenbarger. In the bankruptcy petition, the organization listed assets of between US$50 million and US$100 million and the same amount in liabilities.

"This bankruptcy filing will suspend all lawsuits by Nassar survivors and their ongoing efforts to discover the truth about who at USA Gymnastics and the U.S. Olympic Committee knew about Nassar's criminal conduct and failed to stop it," attorney John Manly said. His firm represents roughly 150 of Nassar's victims.

In the fallout from the exposure of the crimes, the entire board of directors resigned, along with the president and athletic director at Michigan State University where Nassar also worked. The university agreed to a US$500 million settlement with the victims in 2018.

In the last two years, three chief executives of USAG have also stepped down amidst criticism of how they handled, or failed to handle, Nassar’s sexual abuse of the athletes many of the victims said they have suffered greatly due to his abuse of power.

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