USA Gymnastics files for bankruptcy, critics cry foul

USA Gymnastics chairwoman Kathryn Carson cites the Larry Nassar sex-abuse lawsuits in the decision to seek protection from creditors in federal bankruptcy court in Indianapolis.
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USA Gymnastics files for bankruptcy, critics cry foul

Victims and others look on as Rachael Denhollander speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, in this January 24, 2018, photo.

USA Gymnastics said on Wednesday it had filed for bankruptcy protection as the embattled governing body continues to grapple with the aftermath of the Larry Nassar abuse scandal.

In a statement on the organization's website, USA Gymnastics said it had filed for Chapter 11 bankruptcy in Indianapolis in order to settle lawsuits brought by Nassar's victims.

"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," the organization said in a statement.

"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, recently elected as chair of the USA Gymnastics Board of Directors.

However, John Manly, an attorney who represents many survivors of Nassar's crimes, challenged the suggestion that USAG had sought bankruptcy to speed up resolution of cases.

In emailed comments, Manly said the move was an effort to thwart investigators from uncovering the truth about the Nassar scandal.

"Despite what USAG says, bankruptcy is not a method for resolving claims more quickly," Manly said.

"It is a delay tactic designed to stop survivors from getting information through depositions and document requests.

"It is a cynical extension of USAG's campaign to hide their participation in the Nassar scandal from Congress, the media and the public."

USA Gymnastics is fighting for its survival after the United States Olympic Committee last month vowed to disband the organization over its failure to reform following the Nassar abuse case.

Former US team doctor Nassar was jailed for life earlier this year after abusing more than 250 athletes, including several stars of the United States' gold medal-winning teams at the 2012 and 2016 Olympics.

Covering up Nassar's crimes

USA Gymnastics, which had been accused of covering up Nassar's crimes, has been in a state of perpetual crisis ever since the scandal erupted.

In October, newly installed chief executive Mary Bono resigned after just four days following an outcry by Olympic stars Simone Biles and Alexandra Raisman.

Bono had taken over from chief executive Kerry Perry, who had resigned after just nine months following criticism of her performance by USOC.

Manly meanwhile dismissed Carson's assurances that USA Gymnastics was committed to protecting athletes.

"The bankruptcy filing follows more than two years of organizational chaos and attempts to cover up the Larry Nassar scandal by destroying key documents, issuing false statements to the public, obstructing criminal investigations and attempting to silence victims of child sexual abuse," Manly wrote.

"They have never reached out to survivors or attempted to work with us to rebuild the trust of sponsors and the public."

Some analysts said the bankruptcy filing could also disrupt the decertification process triggered by USOC last month.

Manly, however, said replacing USA Gymnastics could not come soon enough.

"The leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt," he said.

"They must be replaced with an organization that will place the health and safety of athletes above money and medals."

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