USA Gymnastics Files for Bankruptcy Amid Hundreds of Sexual Assault Lawsuits

December 6, 2018, 12:20 AM UTC

USA Gymnastics filed for bankruptcy protection Wednesday, a move the sports organization said will allow it to continue to operate while also resolving lawsuits filed by victims of Larry Nassar.

Nassar, the former doctor for the gymnastics team, was sentenced in January to 175 years in prison after allegations of widespread sexual assault reportedly spanned more than 265 victims. In the wake of the years-long abuse, hundreds have filed lawsuits.

Attorney Stu Mollrich told CNN that his firm Manly, Stewart & Finaldi represents 215 clients with claims against the gymnastics organization and that a recent filing in Michigan represents 345 lawsuit plaintiffs.

The claims made by Nassar’s sexual assault victims are covered by the organization’s insurance policy, though aside from the insurance proceeds, USA Gymnastics said it has no other assets to pay the claims, the organization said in a statement.

Recently elected chair of the organization’s board of directors Kathryn Carson said in a statement that the Chapter 11 filing is an important step forward in order to ensure that the sexual assault victims have their cases resolved fully and quickly than through litigation.

“Our sport is safer and stronger thanks to the bravery of these women,” Carson said in the statement. “The Chapter 11 filing and the expedited resolution of these claims are critical first steps in rebuilding the community’s trust.”

Last month, the U.S. Olympic Committee took the first steps to revoke the gymnastics’ organization’s status as a national governing body. However, Carson, who told the Associated Press that the governing body status is a big part of their revenue model, said that the court filing delays the decertification process.