USA Gymnastics has filed a bankruptcy plan that includes an offer of $215m for sexual abuse survivors to settle their claims against the embattled organization.
The $215m total is the amount USA Gymnastics’ insurance carriers are willing to provide the sport’s national governing body to end years of legal battles with athletes who were abused by former national team doctor Larry Nassar. The two sides have been in mediation since USA Gymnastics filed for bankruptcy in December 2018.
Nassar is serving decades in prison for sexual assault and possession of child pornography in Michigan. Hundreds of athletes have come forward over the last three years saying Nassar abused them under the guise of treatment, including reigning Olympic champion Simone Biles and six-time Olympic medalist Aly Raisman.
Bankruptcy law requires businesses to provide an exit plan within 18 months, and the exit plan is another step in a still lengthy process. USA Gymnastics president Li Li Leung told the Associated Press on Thursday that the organization wants to work toward a true consensual settlement” with survivors.
Leung described the $215m as the amount the insurance carriers have agreed to provide at this point.
Our hope is that discussions will continue and more money will be (available), said Leung, who took over in March 2019, several months after Indianapolis-based USA Gymnastics filed for bankruptcy protection. It’s not capped at $215 (million).”
There is a two-step voting process for claimants to determine whether to accept the offer. At least half the claimants who vote have to approve the agreement, and the majority needs to represent at least two-thirds of the monetary value of the settlement. The claimants could also vote down the measure and continue to pursue their lawsuits to collect any judgments from insurance policies available to USA Gymnastics or they could not vote on it at all and discuss how to go forward.
The proposed settlement does not include any money from the US Olympic and Paralympic Committee, which has been named as a co-defendant in some of the lawsuits.
John Manly, an attorney representing 200 Nassar survivors, chastised both USA Gymnastics and the USOPC for blatant disregard of the victims.
This proposed plan does not include the critical structural changes necessary to ensure the safety of girls moving forward, nor does it appropriately address the myriad physical and emotional challenges the victims face as a result of these crimes, Manly said in a statement. Most disturbingly, this proposed plan attempts to absolve USOPC of any responsibility for these crimes which were committed under its watch. This plan from USAG is not just unworkable, it is unconscionable.
Michigan State University, where Nassar worked for decades, agreed in May 2018 to pay $500m to more than 300 women and girls who said they were assaulted by Nassar.
At the time it filed for bankruptcy, USA Gymnastics was facing 100 lawsuits representing more than 350 athletes in various courts across the country who blame the group for failing to supervise Nassar. If claimants agree to accept the offer, the $215m will be placed into a trust, with the money then distributed by a trustee. A judge would decide how the $215m is allocated.
The plan put forth by the organization also requires it to continue to strengthen its athlete safety policies. USA Gymnastics revamped its Safe Sport policy last summer and hired its first vice president of athlete health and wellness last December.
The organization hopes to have a bankruptcy exit plan of some kind approved ahead of the Toyko Olympics, which begin in July.
