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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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MORE: Olympic medalist no longer on USA Gymnastics suspended list

Transgender track and field athletes now face same standard that has kept out Caster Semenya

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Transgender athletes will have to reduce their testosterone level to the same level applied to Caster Semenya and other athletes with Differences of Sex Development (DSD), under a new policy enacted by World Athletics (formerly the IAAF).

As with DSD athletes, the threshold for middle-distance runners has been lowered from 10 nanomoles per liter to 5.

“These Regulations have been drafted to align with the Eligibility Regulations for the Female Classification (Athletes with Differences of Sex Development) and include updates to reflect current medical standards and the legal framework,” World Athletics said in announcing the latest IAAF Council decisions.

The IAAF claimed a similar basis in medical standards last year when it announced its updated policy on DSD athletes: “No female would have serum levels of natural testosterone at 5 nmol/L or above unless they have DSD or a tumour.”

Semenya, a two-time Olympic champion at 800 meters, challenged that limit in the Court of Arbitration for Sport but lost her case in May. Given a brief reprieve by a Swiss court, she ran the fastest 800-meter time of the year (1:54.98), but a higher court overruled her appeal. She did not compete in the recent world championships.

MORE: Semenya laments lack of support

Another athlete affected by the DSD policy, 2016 Olympic bronze medalist Margaret Wambui, told the Olympic Channel she was struggling to find a new direction after the rule was passed.

“It affected me a lot,” Wambui said. “I didn’t want to train or do anything. …

“Caster has fought for us. She has done her level best. She has tried, but we failed.”

VIDEO: Wambui: “No one chose to be born the way they are”

Transgender athletes have not yet been prominent in international track and field, though controversies have arisen at other levels, particularly in a Connecticut case in which high school athletes filed a Title IX complaint after losing to transgender athletes. The athletes who filed the claim said they were potentially at a disadvantage in terms of earning college scholarships.

The new World Athletics policy insists that its stipulations for transgender athletes are actually generous. “The decision limit also takes into consideration that, for clinical purposes, the Endocrine Society Clinical Practice Guideline for Endocrine Treatment of Gender-Dysphoric/Gender-Incongruent Persons recommends that transgender females should have serum testosterone levels of less than 50 ng/dL (i.e. approximately 1.7 nmol/L).”

But while DSD and transgender athletes face different issues, Semenya and other DSD athletes have set a precedent by withdrawing from competition rather than bring their levels down to the 5 nmol/L standard. In CAS proceedings, Semenya said she experienced regular fevers, night sweats, significant weight gain and constant abdominal pain while taking medication to meet the previous standard of 10 nmol/L.

The International Olympic Committee also put a 10 nmol/L limit in place for both transgender and DSD athletes in 2015. Some athletes have complained that transgender athletes still have an unfair advantage under that policy.

The World Athletics policy also addresses transgender men, granting them permission to take regulated testosterone supplements to bring levels within a typical range for men.

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U.S. men’s volleyball extends medal streak with bronze in World Cup

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With its medal-winning streak in jeopardy, the defending champion U.S. men’s volleyball team beat Egypt 22-25, 25-16, 25-14, 25-13 on Tuesday in Hiroshima, Japan. Poland beat Iran later in the day to slip past the U.S. for silver behind unbeaten Brazil.

The experienced U.S. men have claimed a medal in the last four major international tournaments — gold in the 2015 World Cup, bronze in the 2016 Olympics, bronze in the 2018 world championships and bronze in this year’s World Cup. The men also placed second in the 2019 Nations League and third in the first Nations League in 2018, though the team failed to medal in the last two editions of the World League in 2016 and 2017.

Most importantly for next year, the U.S. men swept their Olympic qualification tournament in August.

Micah Christenson was named best setter of the tournament, as he was in the 2015 tournament and in the 2018 world championships. Middle blocker Max Holt was also named to the tournament “Dream Team.

VIDEO: U.S.-Egypt highlights

The U.S. team’s World Cup started with a five-set loss to Argentina, which went on to finish fifth. The U.S. rebounded to beat Italy, world champion Poland, host Japan, Tunisia and Iran before losing to eventual champion Brazil. Border rival Canada took the U.S. to five sets, but sweeps against Australia and Brazil put the team in position to clinch its medal.

Heading into next year’s Olympics, the U.S. team has several internationally accomplished players. In addition to Christenson’s multiple awards, Matt Anderson was named the best opposite hitter in the world championship and Nations League in 2018, and Aaron Russell was named to the Dream Team in the 2016 Olympics. Russell, playing for Italian team Trentino, also was named MVP of the World Club Championship in December.

The U.S. women’s team also won two medals this year gold in the Nations League, silver in the World Cup and swept its own qualification tournament.

This success comes despite the lack of a professional league in the United States. USA volleyball announced last week it has processed paperwork for 257 women and 82 men to play in foreign leagues for the 2019-20, with more players to follow.

The World Cup is contested every four years, the year before the Olympics. The world championship takes place in even non-Olympic years. Qualification for the World Cup is more difficult — only 12 teams reach the tournament, while 24 teams take part in the world championship. 

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