Settlement with Survivors approved by court; USA Gymnastics to exit bankruptcy

INDIANAPOLIS, December 13, 2021 – The U.S. bankruptcy court for the Southern District of Indiana on Monday confirmed a joint Plan of Reorganization supported by USA Gymnastics and the Survivors’ Committee that will provide a settlement with sexual abuse Survivors and enable the organization to emerge from bankruptcy by year end.

Judge Robyn Moberly confirmed a plan that provides for significant non-monetary commitments from USA Gymnastics focused on athlete safety and wellness and a $380M financial settlement.

Prominent among the plan’s provisions are commitments by USAG to further strengthen Safe Sport policies, complaint adjudication and member club involvement; and having at least one Survivor on USAG’s Board of Directors, Safe Sport Committee, and Athlete Health and Wellness Council. It also provides for a Restorative Justice process to facilitate historical accountability, reconciliation and continued cultural transformation in the gymnastics community.

“USA Gymnastics is deeply sorry for the trauma and pain that Survivors have endured as a result of this organization’s actions and inactions,” USAG President and CEO Li Li Leung said. “The Plan of Reorganization that we jointly filed reflects our own accountability to the past and our commitment to the future.

“Individually and collectively, Survivors have stepped forward with bravery to advocate for enduring change in this sport. We are committed to working with them, and with the entire gymnastics community, to ensure that we continue to prioritize the safety, health, and wellness of our athletes and community above all else.”

USA Gymnastics filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Indiana on December 5, 2018. The filing was undertaken to pave the way toward a settlement with Survivors. Survivors and other creditors voted overwhelmingly to approve the plan on November 29, with the court formally confirming an updated plan at Monday’s hearing.

Elected on the eve of the bankruptcy filing, Kathryn Carson, Board Chair and independent director, led the organization through CEO succession, pandemic and bankruptcy. “Today is about the Survivors,” Carson said. “They have used their voices to elicit meaningful change and restructuring within USA Gymnastics, and their impact extends far beyond our sport. We are grateful and humbled by their courage and determination to make all sport safer around the world.”

With the plan now approved by the court, a trust for the survivors will be funded by insurers, the USOPC and USA Gymnastics. Compensation will be distributed to Survivors in accordance with the allocation schedule developed and approved by the Survivors’ Committee. USAG will formally exit bankruptcy in the coming weeks, after necessary administrative work and the entry of an order by the Court closing the case. In connection with the confirmation of the plan, the USOPC has resolved its Section 8 complaint against USA Gymnastics, which will continue USOPC’s recognition of USA Gymnastics as the national governing body of the sport.

The full filing can be found at https://omniagentsolutions.com/usagymnastics.

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David Keech
Author: David Keech

David Keech is a math teacher in Wisconsin Rapids and public address announcer for Abbotsord High School. He officiates basketball, baseball, and softball in central Wisconsin. He has reported on amateur sports since 2011, known as 'KeechDaVoice.' David can be reached at [email protected]