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USA Gymnastics files for bankruptcy

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USA Gymnastics is turning to bankruptcy in an attempt to ensure its survival.

The embattled organization filed a Chapter 11 bankruptcy petition on Wednesday in an effort to reach settlements in the dozens of sex-abuse lawsuits it faces and to avoid its potential demise at the hands of the U.S. Olympic Committee.

USA Gymnastics filed the petition in Indianapolis, where it is based. It faces 100 lawsuits representing over 350 athletes in various courts across the country who blame the group for failing to supervise Larry Nassar, a team doctor accused of molesting them. Nassar, 55, worked at USA Gymnastics and Michigan State University for decades. He is serving effective life sentences for child porn possession and molesting young women and girls under the guise of medical treatment.

Kathryn Carson, the recently elected chairwoman of USA Gymnastics’ board of directors, said the organization’s goal is to speed things up after mediation attempts failed to gain traction.

“Those discussions were not moving at any pace,” Carson said. “We as a board felt this was a critical imperative and decided to take this action.”

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

Carson added: “This is not a liquidation. This is a reorganization.”

John Manly, an attorney representing dozens of women who have pending lawsuits against USA Gymnastics, chastised the organization for continuing to “inflict unimaginable pain on survivors” and encouraged law enforcement officials to “redouble” their investigative efforts.

“Today’s bankruptcy filing by USA Gymnastics was the inevitable result of the inability of this organization to meet its core responsibility of protecting its athlete members from abuse,” Manly said in a statement. “The leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt.”

USA Gymnastics insists that’s not the case, stressing that the filing is based on legal expediency, not fiscal distress.

While Carson acknowledged that sponsorship is down since the first women came forward against Nassar in the fall of 2016, she described the financial condition of USA Gymnastics as “stable.”

USA Gymnastics reported assets in a range of $50 million to $100 million and a similar range of liabilities, with 1,000 to 5,000 creditors. The organization said its largest unsecured creditor is former president and CEO Steve Penny, who is owed $339,999.96. USA Gymnastics is disputing Penny’s claim, though attorney Cathy Steege declined to get into the specific nature of the dispute.

Penny resigned under pressure from the USOC in March 2017. Two other presidents — Kerry Perry and former U.S. Rep. Mary Bono — have followed in what has become a revolving door amid the organization’s hierarchy.

It’s that chaos at the top that led the USOC to initiate the process of removing USA Gymnastics as the sport’s national governing body at the Olympic level — a step that’s taken only under the most extreme circumstances.

In an open letter to the gymnastics community in November, USOC CEO Sarah Hirshland said “you deserve better,” and that the challenges facing USA Gymnastics were more than it was capable of overcoming as currently constructed.

Carson said the legal maneuvering Wednesday delays the USOC’s efforts to strip its designation as a national governing body.

“We always have a dialogue going with them and intend to make it clear with them we have a lot to talk about and we want to keep that going,” she said.

USOC spokesman Patrick Sandusky said the committee is reviewing the filing’s potential effect on decertification. “Financial stability and viability are essential for a national governing body to operate in the best interests of the athletes,” Sandusky said.

USA Gymnastics believes bankruptcy protects it from having opportunities or assets taken away by a debtor. Carson acknowledged that being a national governing body “is a big part of how we raise our revenue.”

Carson, who replaced Karen Golz as chairwoman last week, said she accepted the position because she believes in the direction of USA Gymnastics, which she said doesn’t need money but rather time.

“We think we’re changing the dynamic and we certainly believe that we will try to remain the NGB,” Carson said. “To be clear, it is our lawyers’ firm belief that the bankruptcy will automatically stay (decertification) … and we will work with the USOC to regain credibility.”

Nicholas Georgakopoulos, a bankruptcy expert and law professor at the Indiana University’s Indianapolis campus, said USA Gymnastics is “hoping for a miracle” with its legal maneuvering.

“The USOC says you violated this relationship, here are the consequences and USA Gymnastics is saying it filed for bankruptcy, there are no consequences,” Georgakopoulos said. “This is like a gambling addict who goes to the casino and gambles every day and one day the casino says you can’t come anymore, you’ve lost too much, and addict says, I filed for bankruptcy, you can’t stop me from coming to the casino.”

If the USOC wants to go forward with decertification, it must now go to court.

USA Gymnastics has no timetable on how long the bankruptcy process will take and did not offer a ballpark on how much it expects to pay in settlements. Its doors, however, remain open for business.

“We are continuing to pursue all aspects of our current operating model,” Carson said. “This affords us an opportunity to reorganize as well as resolve the claims with the survivors.”

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April Ross, Alix Klineman back atop Olympic beach volleyball qualifying

April Ross, Alix Klineman
FIVB World Tour
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Two-time Olympic medalist April Ross and new partner Alix Klineman moved back on top of the U.S. Olympic beach volleyball qualifying standings by winning an event in Itapema, Brazil this week.

Ross, who split from Kerri Walsh Jennings in 2017, and Klineman beat Canadians Sarah Pavan and Melissa Humana-Paredes 25-23, 18-21, 15-10 in Sunday’s final for their third title in 11 FIVB World Tour tournaments together.

“Every victory is important, but this counts for more,” Klineman said, according to the FIVB. “We want to send a message and we want to be consistently the best.

Ross and Klineman supplanted Walsh Jennings and her new partner, Brooke Sweat, for the lead in the early U.S. Olympic qualifying rankings with still more than a year of events ahead.

1. Ross/Klineman – 3,240 (5 events played)
2. Walsh Jennings/Sweat – 3,100 (7 events)
3. Day/Flint – 2,180 (5 events)
4. Hughes/Ross — 2,000 (4 events)
5. Larsen/Stockman — 1,840 (5 events)
6. Sponcil/Claes — 1,600 (3 events)

Each team’s 12 best results from Sept. 1, 2018, to June 14, 2020, go into the Olympic qualifying rankings. That means Ross and Klineman are comfortably in front, having played two fewer events than Walsh Jennings and Sweat, who lost in the quarterfinals in Itapema.

The top two U.S. pairs come June 15, 2020, provided they’re ranked high enough internationally, will qualify for Tokyo. Most of the qualifying events, including the ones with the most points available, are still to come this summer.

Ross, 36, picked up Klineman, 29, after Walsh Jennings didn’t join her in signing a domestic AVP contract in 2017. The 6-foot-5 Klineman primarily played indoor the previous decade, including at Stanford from 2007-10 after being the Gatorade National Player of the Year coming out of high school.

MORE: Brazil volleyball star faints during courtside interview

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Katie Ledecky extends 5-year win streak

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Katie Ledecky extended a five-year domestic win streak by taking the 200m freestyle at the Tyr Pro Swim Series at Bloomington on Saturday.

In her last full meet before July’s world championships, Ledecky clocked 1:55.80 to beat training partner Simone Manuel by 1.44 seconds for her second win in as many days. Ledecky is also entered in Sunday’s 800m free on the last day of the meet.

Ledecky, who also cruised to a 400m free victory on Friday, ranks third in the world in the 200m free this year, behind Australian Ariarne Titmus and Swede Sarah Sjöström (the Olympic silver medalist who is not expected to race the 200m free at worlds).

Ledecky, a five-time Olympic champion, hasn’t lost a 200m, 400m, 800m or 1500m free final at a domestic meet since Allison Schmitt beat her in a 200m free on Jan. 18, 2014 when Ledecky was 16 years old.

BLOOMINGTON: Full Results

But Ledecky lost the two biggest 200m frees of this Olympic cycle so far, at the 2017 World Championships and the 2018 Pan Pacific Championships. Italian veteran Federica Pellegrini handed Ledecky her first individual final defeat at a major international meet at 2017 Worlds.

Ledecky dropped to third in the 200m free at Pan Pacs in Tokyo last year, beaten by younger swimmers Taylor Ruck of Canada and Rikako Ikee of Japan.

Ruck, who like Ledecky trains at Stanford, is in Bloomington, but she chose not to swim the 200m free on Saturday. She instead swam the 200m backstroke about 45 minutes after the 200m free and was upset by 17-year-old Regan Smith. Smith won in 2:06.47, moving to No. 3 in the world this year.

In other events Saturday, Ella Eastin captured the 400m individual medley in 4:37.18, taking 1.25 seconds off her personal best and moving to fifth in the world this year. Eastin is not on the world championships team after an untimely bout with mono before qualifying meets last summer.

Blake Pieroni won the men’s 200m free in 1:47.25. No American ranks in the top 20 in the world this year. World silver medalist Townley Haas did not enter Bloomington.

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