Gymnastics enthusiasts in Louisiana and throughout the nation are likely familiar with USA Gymnastics, the national governing body for the sport. Chairwoman for the board of directors in the organization recently announced that board members have made a collective decision to file for Chapter 11 bankruptcy as a means of immediate debt relief. Chapter 11 is one of numerous types of bankruptcy that often help struggling businesses stay afloat.
In the case of USA Gymnastics, extenuating circumstances have placed the organization in a position where its certification is at risk for being revoked. The situation involves a medical doctor who, for years, tended to the health needs of the organization’s athletes. Sadly, more than 300 of those athletes have filed 100 lawsuits against USA Gymnastics because of the doctor’s alleged inappropriate conduct while carrying out his medical duties toward the gymnasts.
The lawsuits state that USA Gymnastics should be held legally accountable for failing to supervise the team doctor. The chairwoman who recently spoke about the organization’s bankruptcy filing said that the type of bankruptcy chosen is not a liquidation but a financial restructuring program. She also stated that the board believes the action was imperative toward helping the organization avoid decertification while also providing funds (through insurance) to settle the current lawsuits.
Chapter 11 debt relief is not the only type of bankruptcy that often activate a stay against litigation. For instance, if a Louisiana homeowner is facing threat of foreclosure, there may be bankruptcy options available to save his or her home. One can seek more information about such programs by reaching out for support from an experienced bankruptcy law attorney.