USA Gymnastics: Indianapolis Bankruptcy News
As you may have heard, USA gymnastics has filed for Chapter 11 bankruptcy relief in the Indiana Southern District for bankruptcy. This filing which occurred in early December 2018 is certainly high-profile Indianapolis bankruptcy news. Recently a deadline of April 26, 2019 has been solidified so far for filing claims in the case.
USA Gymnastics: Why File Bankruptcy?
USA Gymnastics has filed for Chapter 11 relief in an attempt to properly address the large magnitude of the civil claims related to the victims of Dr. Larry Nasser. USA gymnastics filed in Indianapolis for relief under bankruptcy due to it being the proper geographical jurisdiction.
A large magnitude of the settlement money will likely be required to properly address the claims. The claims potentially far exceed the value of USA gymnastic’s total assets. Therefore, the entity opted for Chapter 11 protection, which will also cause additional third party and governmental oversight to be brought into this delicate situation.
What is the End-Game?
USA Gymnastics is likely hoping to reach a court-approved settlement of the claims through a plan of reorganization or other settlement method during the case. The settlement will likely ultimately include a contribution from USA Gymnastics’ insurance providers and possibly from the assets of the entity itself. Whatever the outcome, having the court supervision and open-style nature of a Chapter 11 could potentially afford a higher level of capacity for justice and full disclosure, at least from certain estimations. Even if the situation transitions into a total liquidation, the court will still provide a venue for allocation of funds to settle claims.
The Local Scoop
Respected local Judge Robin Lynn Moberly has been assigned to the bankruptcy case. The United States Trustee’s Office, a branch of the Department of Justice, will provide direct oversight in the situation. Media coverage has also been on the scene for the filings.
