Why USA Gymnastics’ Bankruptcy Will Delay Abuse Survivors’ Search for the Truth

USA Gymnastics’ announcement Wednesday that it was filing for Chapter 11 bankruptcy protection was in some ways expected. The embattled organization is currently under investigation by Congress and under threat of losing its status as the national governing body for gymnastics by the US Olympic Committee (USOC). It faces more than 100 lawsuits by gymnasts who claim that the organization failed to act to protect them against sexual abuse by Larry Nassar, who for many years was the national team doctor, even after reports of his abuse were made to USA Gymnastics officials.

Board chair Kathryn Carson said in a statement that the move is meant to “expedite resolution of claims by the Nassar survivors.” However, John Manly, the attorney who represents more than 100 of those survivors – including Olympians McKayla Maroney, Aly Raisman, Kyla Ross and Jordyn Wieber – says the bankruptcy filing will delay, not speed up resolution of those lawsuits. Manly is currently taking depositions and discovery in some of those suits, which are now on hold because of the bankruptcy filing.

“If the goal is to delay, this is what you do,” he tells TIME. “We have depositions and request for other discovery and subpoenas lined up to get at the meat of what they knew and when they knew it [about the sexual abuse]. Bankruptcy stops that because there is an automatic stay on litigation.”

In its filing, USA Gymnastics lists former CEO Steve Penny, who led the organization during much of the time Nassar abused gymnasts, as the largest creditor, with a nearly $ 340,000 claim. Penny resigned in 2017 as the sexual abuse allegations mounted, and he and the organization were criticized for how they handled the abuse reports. He left USA Gymnastics with a reported $ 1 million severance, approved by the board. And in October, Penny was arrested after he was indicted on charges of tampering with evidence in the Nassar case. Texas law enforcement officials charged Penny with ordering removal of documents from USA Gymnastics’ national training center, the Karolyi Ranch, in 2016.

In her statement, Carson said that any money USA Gymnastics may owe as a result of the lawsuits — when they resume — would be covered by the organization’s insurance policies.

But those athletes with pending lawsuits will have to take yet another legal step because of USA Gymnastics’ decision to file for Chapter 11 protection. The federal bankruptcy court in Indianapolis, where the organization is based, will set a time during which all creditors must step forward and file a claim for any funds they are owed by USA Gymnastics. Creditors usually have four to six months to file these claims, and the gymnasts currently suing USA Gymnastics must also file this separate claim for any damages or recompense they feel they are owed.

From the survivors’ perspective, the delay in the litigation means they will continue to search for answers about why the organization they believed was protecting their best interests allowed Nassar to continue to treat them — at competitions, including in hotel rooms, and at training camps — even after many of them had reported his abuse to USA Gymnastics officials.

“I think USA Gymnastics thinks this is now just about money,” says Manly. “My direction from my clients is that we are not discussing money until we get the truth. The bankruptcy definitely makes it difficult; it delays things and is definitely not a win for us. But we have trial dates set, and we are moving toward trial.”

Sports – TIME

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USA Gymnastics Files For Bankruptcy in Wake of Sex Abuse Scandal

USA Gymnastics is turning to bankruptcy in an effort to ensure its survival.

The embattled organization filed a Chapter 11 bankruptcy petition on Wednesday as it attempts to reach settlements in the dozens of sex-abuse lawsuits it faces and to forestall 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 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.

Kathryn Carson, who was recently elected chairwoman of the board of directors, said the organization is turning to bankruptcy 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.”

One that USA Gymnastics hopes will buy it enough time to fend off the USOC’s intent to decertify it.

The USOC on Nov. 5 took steps to remove USAG as the sport’s 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, 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,” Carson said.

USOC spokesman Patrick Sandusky disagreed.

“While we fully understand that USAG believes this restructuring will begin to solve deficiencies we’ve identified, the filing does not impact our Section 8 complaint and that process will move forward,” Sandusky said.

Sports – TIME

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USA Gymnastics files for bankruptcy as it seeks to resolve sexual abuse claims

USA Gymnastics filed for reorganization under Chapter 11 of the Bankruptcy Code, which will allow it to continue operating while also resolving the sexual abuse claims made by several athletes against former USA Gymnastics national team doctor Larry Nassar. 
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Tisha Campbell-Martin Pays Over $100k To Buy Back Royalties In Bankruptcy Case

(Photo Credit: PR Photos)

Tisha Campbell-Martin has reportedly reached a deal to buy back the rights to collect her royalties that she relinquished as part of her bankruptcy case.

According to court documents obtained by The Blast, Tisha and her estranged husband Duane Martin have reached a settlement with the trustee. She will reportedly pay $ 115,000 in two installments in order to obtain her residual rights. Martin will pay $ 60,000 in one installment and $ 55,000 in another within 90 days of a court’s approval of the settlement.

The former couple have been battling over the residuals for months and, as noted in the report, since the bankruptcy was filed, the trustee has collected $ 300,000 in royalties.

The docs state, “Since December 2017, the debtors have been in the process of ending their marriage and in February 2018, Ms. Campbell filed for divorce from Mr. Martin … In connection with that process and Ms. Campbell’s stated attempt to unravel a long history of Mr. Martin’s control over their joint finances, Ms. Campbell engaged new representation with regard to the dispute described in the Agreement.”

The actress previously accused her ex of hiding money from her during their marriage. She also told the trustee that during their marriage, Duane was responsible for managing all their financials, including collecting her residuals.

Campbell-Martin filed for divorce earlier this year after 20 years of marriage. She and Duane were reportedly legally separated in December 2016.

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