USA Gymnastics Files for Chapter 11 Bankruptcy Following Sex Scandal

Over 265 young women have come forward with sexual misconduct allegations against Larry Nassar, former USA Gymnastics national team osteopathic physician. Hundreds of lawsuits have been filed by these women, claiming Nassar sexually abused them while under the pretense of providing medical treatment.

When Did The Allegations Begin?

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The first public statements were made back in September of 2016, by household names such as Simone Biles, Mattie Larson, and hundreds of other celebrated U.S. gymnasts & Olympic medalists. Sadly, the scandal remains one of the biggest sexual abuse debacles in worldwide sporting history.

What Was The Court Ruling?

In July of 2017, Nassar pleaded guilty to federal child pornography charges and was sentenced to 60 years in prison. In the following November 2017, he pleaded guilty to eight charges of first-degree sexual assault; he was sentenced to an additional 40-175 years in prison, on top of the 60- year sentence.

A detailed investigation discovered that predatory coaches such as Nassar were allowed to be relocated from gym to gym, rather than having their behaviors corrected – and rather than firing them completely. Just how many individuals were aware of the scandal going on and did nothing to stop it is unknown. We do know that other allegations were made against additional coaches across the country, proving that the issue was not isolated to Nassar alone.

Chapter 11 Bankruptcy For USA Gymnastics

Bankruptcy

USA Gymnastics is now filing for Chapter 11 bankruptcy, desperately searching for ways to remain above water in the wake of the sexual abuse scandal. Defense attorneys and bankruptcy lawyers involved in the cases against the abusive coaches hope that the bankruptcy declaration will stop all legal proceedings in civil court, including the continual depositions of USA Gymnastics officials. The USA Gymnastics organization does not have significant assets to settle all the lawsuits being thrown at them. The organization claims their assets total about $6.5 million dollars, and the lawsuits have totaled between $75 million and $150 million dollars for Nassar alone. To note: Michigan State has already paid out $500 million due to Nassar’s sexual assault.

John Manly, an Attorney representing many of the young women who are currently suing USA Gymnastics, called the bankruptcy filing an “inevitable result of the inability of this organization to meet its core responsibility of protecting its athlete members from abuse. [The] leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt. They have inflicted and continue to inflict unimaginable pain on survivors and their families. They are incapable of meeting their obligations as an Olympic governing body.”

Since the sexual abuse scandal began, the USA Gymnastics organization has cycled through three different CEOs, and the majority of their major sponsors have pulled away their support.


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