Artistic Gymnastics

USA Gymnastics outlines plans to emerge from bankruptcy, settle with survivors

The plan will need approval from committee representing sexual abuse survivors

More than a year after USA Gymnastics declared bankruptcy in the wake of the Larry Nassar sex abuse scandal, the embattled organization today released a plan to emerge from that bankruptcy and settle with survivors for $215 million.

Hundreds of athletes were abused by Nassar, the former U.S. team doctor.

The plan, which will have to be voted on by survivors as a group, includes two options as it pertains to the sex abuse claims facing the organization. Either survivors accept the $215 million or they can vote to pursue the lawsuits further.

If the survivors agree to the settlement, insurers for Twistars Gymnastics, which was formerly owned by John Geddert, will add a little over $2 million to the funds. The settlement plan also includes benchmarks that obligate USA Gymnastics to continue to enhance athlete safety.

“It has always been our goal to reach a consensual settlement agreement with all of our creditors through the bankruptcy process.” said Li Li Leung, president and CEO of USA Gymnastics. “While we do not yet have an agreement with the Committee representing the survivors, we still hope to reach an agreement."

Lawyers representing Nassar survivors asked a U.S. bankruptcy court to dismiss the governing body's Chapter 11 bankruptcy protections just nine days ago on January 21. Those bankruptcy protections included suspending legal proceedings and halting the U.S. Olympic Committee's decertification efforts.

Nassar's abuse, which became public shortly after the 2016 Olympic Games in Rio, gained national and international attention in January 2018, as hundreds of women, including Olympic champions Aly Raisman and Jordyn Wieber, testified in a Michigan courtroom. 2012 Olympic gold medallists Kyla Ross, Gabby Douglas and McKayla Maroney have also came forward as survivors, along with 2016 gold medallists Simone Biles and Madison Kocian.

The revelations created upheaval within USA Gymnastics. Chief among the changes were leadership, with long-time president and CEO Steve Penny stepping down in March 2017. The organization hired Kerry Perry in December of that year, only for her to step down nine months later. Former congresswoman Mary Bono was appointed interim CEO but resigned four days later.

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Leung, a former U.S. national team member and collegiate gymnast, took the helm of the organization in February of 2019.

"Gymnastics has been a huge part of my life and, to this day, I’m still embedded in this sport,” Leung said on a conference call announcing her hiring. “It really broke my heart to see where the sport was. It compelled me to step forward. We can do better for the community and the sport."

Stars of that community have been vocal about USA Gymnastics. Raisman recently wrote a letter to her younger self, saying "I wonder if I would tell her that life will be filled with ups and downs, and that there are people in the sport who will fail to protect her and her teammates."

Biles, who won five of a possible six gold medals at the recent 2019 World Championships, was critical at last August's U.S. Championships.

"You had one job. You literally had one job and you couldn’t protect us," the 25-time World champion said. "'It’s hard coming here for an organisation, having had them fail us so many times, we had one goal, we have done everything that they asked us for, even when we didn’t want to and they couldn’t do one damn job.''