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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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No medal for David Boudia as China extends perfect run at diving worlds

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David Boudia is very much a work in progress in his first year as a springboard diver. That much was evident in his dive list for Thursday’s final at the world championships, where Boudia had the lowest total degree of difficulty.

Boudia, a four-time Olympic platform medalist who earned individual platform silver at his last three world championships, took fifth in the springboard final in Gwangju, South Korea while performing easier dives than the other 11 men.

It marked Boudia’s first major international meet since Rio. He took 2017 off from diving to sell homes. In February 2018, he suffered a concussion on a badly missed dive in training off the 10-meter platform, sparking the switch to springboard, a common move for divers late in their careers.

Boudia will spend the next year — the next six months in particular — trying to close the gap on the medalists. China’s Xie Siyi and Cao Yuan went one-two.

Great Britain’s Jack Laugher was in position to become the first non-Chinese diver to take gold in 10 events this week before failing his last dive for 30.6 points, the lowest-scoring dive of the 72 in the final. Laugher scored at least 9.0s on his first five dives, including a 10, before recording between 2s and 3s from the seven judges in the last round and squandering a 31.1-point lead.

Laugher had 21.6 points in difficulty in Thursday’s final. Xie had 21.3 and Cao 21.2. Boudia had 19.9, arguably putting him out of the running for the podium before he stepped on the springboard.

Boudia, a 30-year-old father of three, accomplished his goal for worlds simply by making the final.

Boudia and Rio Olympian Michael Hixon reached the top 12 to ensure the U.S. gets two men’s springboard spots at Tokyo 2020, to be filled at June’s Olympic trials in Indianapolis. Hixon, who was 10th in Rio and 20th at the 2017 Worlds, finished seventh in Gwangju.

Diving worlds continue with the women’s springboard final, featuring Chinese Olympic champion Shi Tingmao but no Americans, on Friday. The men’s platform final is Saturday.

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Chris Froome wins 2011 Vuelta a Espana

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AIGLE, Switzerland (AP) — Chris Froome has become the 2011 Spanish Vuelta winner because of Juan Jose Cobo’s disqualification for blood doping.

The International Cycling Union says Cobo did not meet a deadline to challenge his three-year ban at the Court of Arbitration for Sport.

The UCI says Cobo’s suspension announced last month is confirmed, and he is stripped of results at the 2009 world championships and Vuelta, and the 2011 Vuelta which he won.

Froome was runner-up eight years ago and becomes the winner of his first Grand Tour title, and seventh overall.

Froome also becomes the first British winner of any of the major stage races — the Giro d’Italia, Tour de France, or Vuelta.

That honor was held by Bradley Wiggins, the 2012 Tour winner who rises from third to be runner-up at the 2011 Vuelta.

The 38-year-old Cobo is retired from racing. His doping ban was announced days after Froome suffered season-ending injuries crashing at the Dauphine race in France.

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