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USA Gymnastics’ $380 million bankruptcy plan is approved (1)

USA Gymnastics’ Chapter 11 plan to settle hundreds of sexual abuse claims by paying victims $380 million, largely from insurance proceeds, has received bankruptcy court approval.

the plan, backed by the 476 abuse survivors who voted, allows the sports organization to complete a bankruptcy filing following revelations that team doctor Larry Nassar sexually abused hundreds of female gymnasts over several years . Some of the organization’s biggest stars, like Simone Biles and Aly Raisman, have joined other gymnasts in seeking compensation for the abuse they have faced.

All USAG insurers, including National Casualty Co. and Virginia Surety Co., have agreed to contribute to a bankruptcy plan trust for victims with legal claims against the organization. TIG Insurance Co. became the latest insurer to settle with USAG and abuse survivors, agreeing to a settlement ahead of Monday’s hearing in U.S. Bankruptcy Court for the Southern District of Indiana.

The United States Olympic and Paralympic Committee is directly contributing $34 million as part of the settlement.

The plan “is certainly in the best interests of creditors,” Judge Robyn L. Moberly said in the hearing before approving the plan.

“This historic settlement brings to an end another chapter in the Larry Nassar scandal,” victims’ attorney John Manly of Manly, Stewart & Finaldi said in a statement Monday. “We triumphed for one simple reason, the courage and tenacity of the survivors. These brave women have relived their abuse publicly, in countless media interviews, so that no more children will be forced to endure physical, emotional or sexual abuse in pursuit of their dreams.

“USA Gymnastics is deeply sorry for the trauma and pain survivors have endured as a result of the actions and inactions of this organization,” USAG President and CEO Li Li Leung said in a statement. communicated. “The reorganization plan we have jointly filed reflects our own responsibility for the past and our commitment to the future.”

USA Gymnastics filed for bankruptcy in December 2018 over the fallout from Nassar’s abuse. The former team doctor is serving prison sentences for sexual assault and possession of child pornography.

The organization earlier this year reached a workable abuse resolution framework that relies on payments from insurers. The Chapter 11 plan, approved for a vote by creditors in October, calls for distributing funds to abused gymnasts and maintaining programs to report abuse and support athletes. USAG originally projected the settlement fund to total approximately $425 million, but that figure was reduced following further negotiations with insurers.

“For years we have demanded change from these organizations that let us down, and the institutional reforms that are part of this settlement will help ensure that this abuse does not happen again to young athletes in the future.” , former Olympic gymnast Tasha Schwikert Moser said in a statement. declaration.

The case is In re USA Gymnastics, Banker. SD Ind., No. 18-09108, hearing of 12/13/21.