USA Gymnastics, survivors reach agreement on proposed $425 million settlement

USA Gymnastics has reached an agreement on a proposed $425 million settlement with more than 500 women who said they were sexually abused by Larry Nassar, their coach or someone else affiliated with the sport.

The offer, filed late Tuesday in U.S. Bankruptcy Court for the Southern District of Indiana, is part of a reorganization plan that would allow USA Gymnastics to emerge from bankruptcy.

But there aren't enough funds for the settlement yet, with agreements still needing to be reached with several insurance carriers. Until, and unless, that happens, it won't go through.

"What this isn’t is a settlement. This is a proposed resolution that the Survivors Committee supports," said John Manly, an attorney who represents many of the survivors, including Olympic champions Aly Raisman and Simone Biles.

"Let me be clear, it’s not funded. There’s a lot of work left to be done before this is over."

In expressing its support for the plan, the U.S. Olympic and Paralympic Committee made a direct appeal to the insurers that still haven't committed to funding the settlement.

"Under the new plan, the USOPC will contribute substantially to the compensation of the survivors," the USOPC said in a statement. "There are, unfortunately, some insurance carriers that continue to withhold support for this plan, and we urge these carriers – in the strongest terms – to join the rest of the parties in supporting the plan’s fair resolution for the victims and survivors of abuse."

Still, USA Gymnastics said in a statement it is optimistic a resolution to the three-year-old case is close.

“After extensive discussions, this plan has been jointly proposed by USA Gymnastics and the Committee, and it is supported by many of the involved insurers,” USA Gymnastics said in a statement. “We anticipate that this plan will be confirmed later this year and greatly appreciate all parties’ efforts to get to this point.”

In exchange for accepting the settlement, the survivors would agree to end claims against USA Gymnastics, the USOPC and Bela and Martha Karolyi.

The proposal is nearly double the $215 million that USA Gymnastics proposed in January 2020, an offer that was roundly criticized. It's not clear exactly how much each survivor would get, because the plan also covers other debts USA Gymnastics had when it filed for bankruptcy in December 2018, and the plan does not include recommendations for how the money should be allocated.

That, along with making sure the settlement is fully funded, need to be resolved, said Jon Little, another attorney who represents survivors.

"The settlement is silent right now on conduct," Little said. "Is the matrix of distribution going to be based on conduct?"

The plan also includes steps USA Gymnastics would take to prevent abuse in the future. That includes requiring local clubs, as a condition of their membership, to put up posters with information on how to report sexual abuse; acknowledge that they understand and will follow their reporting responsibilities when abuse is suspected; have anyone who is in regular contact with or has authority over minors to complete Safe Sport training.

Every club also would be required to have a "Safety Champion," who would inform USA Gymnastics of the club's compliance with the rules.

While Manly said some of those steps are promising, the survivors are looking for some other, concrete actions. They also want the USOPC to acknowledge its responsibility in allowing Nassar to operate unchecked.

As the longtime team physician for USA Gymnastics, Nassar also worked at several Olympic Games.

"One of the things I think that distresses me and many of my clients is the continued aloofness of the USOPC in accepting responsibility in these cases," Manly said. "In my view for this to happen, the USOPC has to acknowledge its responsibility here to people like Simone Biles, Aly Raisman and many other Olympians they let this happen to and deceived.

"That’s a piece that hasn’t happened yet."

The settlement comes three years after Michigan State, where Nassar was a team physician, agreed to pay $500 million to settle lawsuits with hundreds of his victims.

USA Gymnastics CEO Li Li Leung had said in February that she hoped the organization could exit bankruptcy “sometime this summer.” But that required it to reach a settlement with the survivors, including Biles and Raisman.

The survivors’ lawsuits had been put on hold after USA Gymnastics filed for bankruptcy in December 2018, though negotiations between the federation and survivors continued. USA Gymnastics made a $215 million settlement offer in January 2020, but it was rejected because it allowed third parties like the USOPC to be released from the lawsuit without making a substantial contribution – financially or otherwise.

The judge in the case, U.S. Bankruptcy Judge Robyn Moberly, agreed, saying in February 2020 that the USOPC needed to be “actively participating, particularly with their pocketbook.”

Getting insurers to increase their contributions also slowed the process, and Leung said in February that COVID-19 had not helped. Rather than face-to-face meetings involving all parties, there had to be “side conversations” involving individual parties, with the results then brought back to the larger group.

This article originally appeared on USA TODAY: USA Gymnastics, abuse survivors agree on $425 settlement offer