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Hundreds of young gymnasts and their families trusted Dr. Larry Nassar, the longtime USA Gymnastics and Michigan State University team physician. Their trust was unfounded, as Nassar was arrested in 2016 for sexual abuse of young girls and women, conducted under the guise of examination. Some of the top female gymnasts in the country, including Olympic gold medalists Aly Raisman, Simone Biles, Gabby Douglas, and Kyla Ross, were among his victims.
In January 2018, Nassar was sentenced to 40 to 175 years in prison, but he was already sentenced to 60 years in prison on a federal child pornography charge. USA Gymnastics filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court in the Southern District of Indiana. With Chapter 11 bankruptcy, assets are not taken away from a debtor.
To date, more than 100 lawsuits were filed by 350 survivors, as well as a Section 8 complaint filed by the U.S. Olympic Committee (USOC) against USA Gymnastics to remove it as the national governing body for gymnastics. Michigan State University agreed earlier this year to pay $500 million to settle many of the lawsuits filed against the school, while USA Gymnastics estimated it would cost the organization up to $100 million to settle its lawsuits. Although USA Gymnastics went through months of mediation, no settlement was reached, and the USA Gymnastics board determined that the best way forward was having a bankruptcy court make the decision regarding claims.
When a settlement is reached, it is the insurance company that will pay the claims. A board chairman said USA Gymnastics does not have the assets needed to pay claims. She adds that she hopes the USOC will prove as cooperative as the insurance companies. However, if the USOC is successful in revoking USA Gymnastics as the governing body of its sport, the organization will likely cease to exist. While representatives from USA Gymnastics are under the impression that the bankruptcy filing puts the USOC’s decision of its status on hold, representatives from the USOC say that is not accurate.
According to USOC representatives, the bankruptcy filing does not affect its Section 8 claim. What the bankruptcy filing will do, however, is put a stop to any discovery and depositions relating to victims’ lawsuits. Whether that stoppage is temporary or permanent is yet to be determined. During the bankruptcy proceedings, USA Gymnastics will continue to operate normally. She adds the organization is not encountering issues in paying its bills.
If you or a loved one was the victim of sexual abuse, you need the services of the experienced Georgetown sexual abuse lawyers at Jacobs & Crumplar, P.A. Call our office today at 302-656-5445 or contact us online for a free initial consultation. From our offices in Georgetown and Wilmington, Delaware, we represent clients throughout the state, including Dover, New Castle County, and Sussex County.