USA Gymnastics
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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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Gregorio Paltrinieri swims second-fastest 1500m freestyle in history

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Olympic champion Gregorio Paltrinieri swam the second-fastest 1500m freestyle in history, clocking 14:33.10 in his native Italy on Thursday.

Paltrinieri, 25, missed Chinese Sun Yang‘s world record from the 2012 Olympics by 2.08 seconds.

The Italian now owns the second- and third-fastest times in history, including his 14:34.10 from the 2016 European Championships, also held at the 2012 Olympic pool in London.

Paltrinieri is a versatile distance swimmer. At last year’s world championships, he finished sixth in the open-water 10km to qualify for the Olympics, then won the 800m free in the pool in a European record time and finished with 1500m bronze, just missing a third straight world title in that event.

German Florian Wellbrock won the 1500m in 14:36.54 at worlds, with Paltrinieri finishing 2.21 seconds back.

Sun, 28, was in February banned eight years stemming from destroying a drug-test sample with a hammer in September 2018. Sun, who focused more on the 200m and 400m frees in recent years, did not race the 1500m at the 2017 or 2019 Worlds.

Top-level swim meets in the U.S. are scheduled to resume in November with the Tyr Pro Series.

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Bianca Andreescu to miss U.S. Open

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Bianca Andreescu withdrew from the U.S. Open, citing “unforeseen challenges, including the Covid pandemic” compromising her ability to prepare to defend her Grand Slam title.

“I have taken this step in order to focus on my match fitness and ensure that I return ready to play at my highest level,” Andreescu, a 20-year-old Canadian, posted on social media. “The US Open victory last year has been the high point of my career thus far and I will miss not being there. However, I realize that the unforeseen challenges, including the Covid pandemic, have compromised my ability to prepare and compete to the degree necessary to play at my highest level.”

Andreescu’s absence means the U.S. Open, the first Grand Slam tournament since tennis resumed amid the coronavirus pandemic, will be without both 2019 male and female singles champions.

Rafael Nadal previously announced he would not defend his title, saying he would rather not travel given the global situation. Roger Federer is also out after knee surgery. Women’s No. 1 Ash Barty didn’t enter, either, citing travel concerns.

Last year, Andreescu made her U.S. Open title run as the 15th seed, sweeping Serena Williams in the final. Ranked 208th a year earlier, she became the first player born in the 2000s to win a Slam and the first teen Slam winner since Maria Sharapova at the 2006 U.S. Open.

Andreescu then missed the Australian Open in January due to rehab from a knee injury that forced her to retire during a match at the WTA Finals on Oct. 30. She also missed the French Open and Wimbledon in 2019 following a rotator cuff tear.

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