USA Gymnastics apparently struggled financially after a web of corruption and abuse hit California headlines in 2016. The sports organization recently filed for Chapter 11 bankruptcy, which will allow it to restructure. It has recently been hit with many lawsuits from former gymnasts, but it claims that this filing will not affect any of the women's claims.
With the 2020 Summer Olympics feeling as if they are just around the corner, USA Gymnastics seems eager to resolve its debt issues. The organization did not disclose how much debt it is currently dealing with, but the financial issues are likely related to the rocky past two years. Not only was the company hit with claims of abuse, but it has since changed CEOs three times in under two years. One of those CEOs was even arrested for allegedly tampering with evidence related to those abuse claims.
However, women who have sued USA Gymnastics because of abuse claims are worried that they might not achieve any legal recourse. The organization has assured these women that any related compensation will not be affected, and that the suits will likely move forward as expected. This is because USA Gymnastics had previously purchased insurance policies that cover such claims.
As USA Gymnastics works through Chapter 11 bankruptcy, the decertification process from the U.S. Olympic Committee will be placed on hold. This will likely give the organization the time and space in which to not only restructure the company and debt, but to also address any lingering issues from the last several years. Chapter 11 is not only for big companies, and small California businesses might also benefit from the useful restructuring process that this bankruptcy offers.