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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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Chloe Kim makes it five straight wins with Dew Tour title

Chloe Kim
Dew Tour
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Chloe Kim capped one of the greatest years in snowboarding history by repeating as Dew Tour champion in Breckenridge, Colo., on Sunday.

The 18-year-old PyeongChang gold medalist won a modified halfpipe contest with a 94.67-point first run on a course that combines slopestyle features with a halfpipe. She beat a field that included Olympic silver and bronze medalists Liu Jiayu and Arielle Gold.

Kim has won five straight contests — the X Games in January, the Olympics in February, the U.S. Open in March and, to open this season, victories the last two weekends. No other rider won the X Games, Olympics and U.S. Open in one year.

Kim decided to compete this season rather than enroll in college. She tweeted in March that she was accepted to Princeton.

She is expected to go for a fourth X Games Aspen title in five years next month, which would tie her for second all-time among women behind Kelly Clark, who has six halfpipe crowns.

The retired Gretchen Bleiler also won four X Games golds. Clark, a 35-year-old, five-time Olympian, said last month that she was undecided if she will compete again.

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Brittany Bowe grabs 20th World Cup win, ascends U.S. all-time list

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Olympic bronze medalist Brittany Bowe grabbed her third World Cup win this season and the 20th of her career, moving into solo fifth place on the U.S. all-time list on Sunday.

Bowe, whose PyeongChang medal came in the team pursuit, won a 1000m in Heerenveen, Netherlands, in 1:13.24, beating a field including Olympic silver and bronze medalists Nao Kodaira and Miho Takagi of Japan. She broke her own track record by .66 at the sport’s hallowed Thialf.

“That was one of the most perfect races I’ve skated this far, and I couldn’t be happier to do it here in Thialf,” Bowe said, according to the International Skating Union. “Every stroke was right, no missteps. This was definitely one of the best races in my career.”

Bowe earned a medal of every color in two days of racing in Heerenveen, adding to her 500m bronze and 1500m silver on Saturday. Bowe leads the season standings in the 1000m and is third in the 500m and 1500m.

There are two stops left this season — Hamar, Norway, in February and Salt Lake City in March, with the world championships in between.

“The real show is in February [at words],” Bowe said.

Bowe is returning from a July 2016 concussion that affected her for the entire 2016-17 season, including blood-pressure issues and fainting spells.

She returned in full for the 2017-18 Olympic season but did not make an individual podium between the World Cups and the Olympics, missing a 1000m medal in PyeongChang by .38 and in the 1500m by .28.

Before the concussion, Bowe in 2015 earned world titles and broke world records in the 1000m and 1500m.

On Sunday, the former Florida Atlantic basketball player passed three-time Olympic medalist Chris Witty for fifth on the U.S. World Cup wins list behind Bonnie Blair (69), Shani Davis (58), Dan Jansen (46) and Heather Bergsma (34), according to schaatsstatistieken.nl.

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