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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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Cyclist in induced coma after Tour of Poland crash

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Dutch cyclist Fabio Jakobsen was put into an induced coma Wednesday after suffering injuries in a crash on the final stretch of the Tour of Poland, organizers said.

A massive crash at the finish of the first stage resulted in Dylan Groenewegen‘s disqualification from the race.

Leading a bunch sprint, Groenewegen veered toward the right barrier, pinching countryman Jakobsen, who barreled into the barrier meters from the finish line.

Jakobsen went head over heels, his bike went airborne and the barriers exploded onto the road, causing more cyclists to crash.

Jakobsen was airlifted to a hospital in serious condition and was put into an induced coma, the Tour de Pologne press office said.

Doctor Pawel Gruenpeter of the hospital in Sosnowiec said Jakobsen suffered injuries to the head and chest but that his condition was stable at the intensive care unit. Jakobsen will need surgery to his face and skull, Gruenpeter told state broadcaster TVP Sport.

Groenewegen crossed the finish line first but was disqualified, giving Jakobsen the stage win, according to the stage race website.

Groenewegen, a 27-year-old Jumbo-Visma rider, owns four Tour de France stage wins among the last three years.

The International Cycling Union (UCI) “strongly condemned” Groenewegen’s “dangerous” and “unacceptable” behavior. It referred Groenewegen’s actions to a disciplinary commission for possible sanctions.

The Associated Press contributed to this report.

Figure skating Grand Prix Series will be held as ‘domestic’ competitions

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Figure skating’s Grand Prix Series will go ahead as scheduled this fall, with modifications due to the coronavirus pandemic, the International Skating Union decided Monday.

Each of the series’ six tops around the globe will be “a domestic run event,” limited to skaters of the event’s host country, who regularly train in the host country and from a respective geographical area. The number of disciplines and skaters at each event are to be worked out.

The Grand Prix Series, held annually since 1995, is a six-event fall season, qualifying the top six skaters and teams per discipline to December’s Grand Prix Final. The annual stops are in the U.S., Canada, China, France, Russia and Japan, leading up to the Final, which is held at a different site each year.

The Final is the second-biggest annual competition after the world championships, which are typically in late March. The Final is still scheduled for Beijing, though whether or when it can be held will be discussed.

The series begins in late October with Skate America, which debuted in 1979 and has been held every year since 1988 as the biggest annual international competition in the U.S. Skate America’s site is Las Vegas, just as it was in 2019.

Skaters typically compete twice on the Grand Prix Series (three times if they qualify for the Final). ISU vice president Alexander Lakernik said skaters will be limited to one start in the six-event series before the Final, according to a Russian media quote confirmed by Phil Hersh.

The ISU has not confirmed or denied Lakernik’s assertion.

Most, if not all, top-level U.S. skaters train in the U.S. or Canada. That makes the first two Grand Prix stops — Skate America and Skate Canada — likely destinations. Grand Prix assignments have not been published.

“I appreciate the ISU is open to adapting competitive formats and is working to give athletes opportunities to compete,” Evan Bates, a U.S. ice dance champion with Madison Chock who trains in Montreal, wrote in a text message to Hersh. “This announcement gives reassurance that the ISU is doing their best to ensure a season will still take place. Of course, it’s hard to predict what will happen, and we’re not sure about what country we would compete in. It would probably depend on what the quarantine rules are at that time.”

The January 2021 U.S. Championships are scheduled for San Jose, Calif. The March 2021 World Championships are set for Stockholm.

In July, the ISU canceled the Junior Grand Prix Series for skaters mostly ages 13 to 18, including two-time U.S. champion Alysa Liu, who cannot enter the senior Grand Prix until 2021.

Other early season senior international competitions scheduled for September were also canceled or postponed.

U.S. Figure Skating said in a statement that it will have more details on the Grand Prix Series in the coming weeks after collaborating with an ISU-appointed group.

“This is a great example of the figure skating community coming together to ensure that the world’s premier figure skating series will continue during these challenging times,” the statement read. “Figure skaters want to compete and figure skating fans from all around the world want to see their favorite athletes skate, and this format will ensure just that.”

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