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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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Adam Jones, five-time MLB All-Star, becomes Olympic eligible

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Should the U.S. qualify for baseball’s Olympic return, a five-time MLB All-Star could be eligible for its roster in Tokyo. And he has interest.

Outfielder Adam Jones signed with the Orix Buffaloes of Japan’s domestic league, which, unlike MLB, will take an Olympic break next summer to allow players to take part in the first Olympic baseball tournament in 12 years.

Jones, 34, made no mention of Olympic eligibility in a social media post announcing the signing. His Instagram avatar is a photo of him in a Team USA jersey from the World Baseball Classic.

Jones’ agent later said that Jones does have interest in playing for the U.S. in Tokyo, should an American team qualify in the spring.

“To play over in Japan has always been a desire of Adam’s, and the timing worked out that the Olympics happens to be played in Tokyo the first year of his contract,” Jones’ agent wrote in an email. “It wasn’t one of the factors on his decision BUT more of a [sic] addition to the overall package to decide to go.”

Jones called being part of the U.S.’ 2017 WBC title, “probably the best experience of my life so far, especially with sports,” according to The Associated Press. He was one of five players to be on the U.S. team at each of the last two World Baseball Classics.

The U.S. still faces a difficult task to qualify for the Tokyo Games. It lost to Mexico last month in its first of up to three chances at qualifying tournaments, using a roster of mostly double-A and triple-A caliber players.

Major Leaguers are not expected to be made available for qualifying or for the Tokyo Games.

The next two qualifying tournaments will be in late March (an Americas qualifier in Arizona) and early April (a final, global qualifying event in Chinese Taipei). It remains to be seen how MLB clubs will go about releasing minor leaguers for a tournament that will take place during spring training.

Jones could become the third player with prior MLB All-Star experience to compete at the Olympics from any nation, joining Australian catcher Dave Nilsson and Canadian pitcher Jason Dickson.

Jones made five All-Star teams during an 11-year stint with the Baltimore Orioles from 2008-18 before playing for the Arizona Diamondbacks last season.

Many players competed at the Olympics before making an MLB All-Star team, including Stephen Strasburg and Jason Giambi.

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Russia boxers to boycott Olympics if sanctions not lifted

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Russian boxers will only take part in the Tokyo Olympics if doping sanctions forcing them to compete as neutral athletes are overturned, the general secretary of the Russian Boxing Federation told The Associated Press on Wednesday.

Umar Kremlev said he has spoken with the Olympic boxing team and they “unanimously” rejected the conditions laid out by the World Anti-Doping Agency as punishment for manipulating doping data.

The WADA sanctions, announced on Monday, ban the use of the Russian team name, flag or anthem at a range of major sports competitions over the next four years, including next year’s Olympics.

“They said we won’t go without our flag and anthem,” Kremlev said. “We aren’t going for medals, but for that feeling that I brought the highest honor home for my country.”

Separately, the speaker of Russia’s upper house of parliament said Russia could create an alternative to the Olympics.

“This ruling show the clear crisis in international sports institutions. I believe that Russia could host its own games at home,” Valentina Matvienko said in comments reported by the Interfax news agency.

There is a precedent. After the Russian Revolution of 1917, the Soviet Union refused to compete in the Olympics and hosted its own Spartakiads — named after the ancient rebel slave Spartacus — with a strong socialist slant. However, the Soviet Union began competing at the Olympics in 1952 and Russians generally take great pride in the country’s Olympic achievements since then.

If the sanctions aren’t overturned, Kremlev said Russian boxers would prefer to turn pro rather than compete at the Olympics.

“A world champion (in professional boxing) is better known than an Olympic champion,” Kremlev said, adding the Russian anthem would be played before pro title fights.

Kremlev said boxers are being asked to shoulder the blame for offenses committed in other sports. He said they would still stay at home even if Russia’s athletes in other sports decided to take part.

“If other sports are guilty and people have breached the WADA code, why are we punished?” he said. “We are for honest sport and against doping. We want our sport to be clean … If someone breaks the rules, we push them out.”

Russia is a major power in amateur and Olympic boxing. It hosted both men’s and women’s world championships this year, finishing at the top of the medals table at the women’s event and second in the men’s championships. The International Olympic Committee has taken direct charge of boxing at the Tokyo Olympics after criticizing chronic financial problems and infighting at the International Boxing Association.

Russian Sports Minister Pavel Kolobkov talked up Russia’s chances of overturning the WADA sanctions.

“I think that there is every basis to appeal the decision, because our experts have presented their position, and they have the same database as WADA does,” Kolobkov said in comments reported by state news agency TASS. “There is an answer to every question and the whole process is ahead of us.”

The official decision on whether to dispute the sanctions will be made on Dec. 19 by the Russian anti-doping agency’s supervisory board, but senior figures, including Russian President Vladimir Putin, have signaled their preference for taking the matter to the Court of Arbitration for Sport.

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