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USA Gymnastics to send plan to resolve sex abuse claims to a vote

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(Reuters) - USA Gymnastics on Monday obtained approval to begin soliciting votes for its proposed reorganization plan that aims to settle litigation with athletes who were sexually abused by former team doctor Larry Nassar.

U.S. Bankruptcy Judge Robyn Moberly in Indianapolis signed off on the organization’s disclosures outlining the key components for creditors and abuse survivors who are entitled to vote on the plan. USA Gymnastics, represented by Jenner & Block, has offered a little more than $400 million to compensate approximately 500 gymnasts.

The organization and the committee representing abuse survivors proposed the plan in late August, nearly three years into the bankruptcy.

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In addition to acceptance from the abuse survivors, the deal must secure support from insurers to move forward. Nearly all insurers involved have said they would back the deal, according to court papers. TIG Insurance Co is the only insurer that has not yet committed to fund the settlement.

The voting deadline is Nov. 29. The organization will release the voting results on Dec. 2. If the plan is accepted by creditors and victims, a hearing for court approval will begin on Dec. 13 and is expected to last two days.

USA Gymnastics filed for bankruptcy protection in 2018 to settle claims stemming from the Nassar abuse. Nassar was sentenced that year to up to 175 years in prison after pleading guilty to multiple sexual assault charges.

The case is In re USA Gymnastics, U.S. Bankruptcy Court, Southern District of Indiana, No. 18-09108.

For USA Gymnastics: Catherine Steege, Dean Panos, Melissa Root and Adam Swingle of Jenner & Block

For the survivors' committee: James Stang and Ilan Scharf of Pachulski Stang Ziehl & Jones; and Deborah Caruso and Meredith Theisen of Rubin & Levin

For TIG Insurance: George Calhoun of Ifrah Law; Heather Simpson of Kennedys Law; and David Temple and Sean Devenney of Drewry Simmons Vornehm

Read more:

U.S. Justice Department renews inquiry into FBI's failures in Larry Nassar probe

USA Gymnastics, reeling from abuse claims, files for bankruptcy

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Maria Chutchian reports on corporate bankruptcies and restructurings. She can be reached at maria.chutchian@thomsonreuters.com.

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