Chapter 11 - USA Gymnastics - Plan 2

[RememberSchiff]

May, 2018  Michigan State University agrees to pay $500 million to more than 300 women and girls who said they were sexually abused by Larry Nassar who worked there.

Dec, 2018 - USA Gymnastics files for Chapter 11.  BSA hires Sidley Austin LLP for assistance with possible chapter 11 bankruptcy filing.

Feb, 2020 - Plan 1  by USA Gymnastics and the United States Olympic and Paralympic Committee , a $215M settlement was rejected as too low. BSA files for Chapter 11.

https://www.latimes.com/sports/story/2020-03-02/simone-biles-aly-raisman-decry-settlement-in-larry-nassar-scandal

Sept 1, 2021 - Plan 2, a $425M settlement, submitted jointly to U.S. Bankruptcy Court for the Southern District of Indiana by U.S.A. Gymnastics and a court appointed Survivors Committee. For approval, "the bankruptcy court would also have to certify the plan, and the individual victims and other creditors will vote on it. A majority of the claimants would have to accept the plan, and that majority must account for at least two-thirds of the monetary settlement.", and insurers would have to agree to fund settlement.

"Votes must be in by November 8, with any written objections to the proposal due by Nov. 19. A confirmation hearing is scheduled for Dec. 8-9."

“I will say that the survivors deserve help with their medical care, and therapy is not cheap, so I do think they deserve compensation,” she said. “But it would also be in the best interest of everyone to see actual change and reform to take place in the organization. That’s what we were hoping for. Change was our goal.”

“The non-monetary provisions of this plan are absolutely key,” Rachel Denhollander said. “It is reform and change for the next generation. If U.S.A.G. does indeed work with survivors to see these provisions through, it would be groundbreaking.”

Note: approximately 500 victims

https://www.nytimes.com/2021/09/01/sports/olympics/usa-gymnastics-payout-sexual-abuse.html

https://abcnews.go.com/Sports/wireStory/usa-gymnastics-eyes-425-million-settlement-survivors-79756955

Edited September 1, 2021 by RememberSchiff
timeline in chronological order. Add BSA filing

[CynicalScouter]

55 minutes ago, RememberSchiff said:

Note: approximately 500 victims

To put into perspective: that makes the math $850,000 per victim in average.

Even JUST looking at the non time barred BSA claims (around 15,000) that would be the equivalent of the BSA plan = $12.75 billion.

Add in the timebarred and the numbers just become astronomical: $70+ billion.

[RememberSchiff]

...maybe if the BSA had equivalent insurers and coverage. A quick search result

https://usagym.org/pages/membership/pages/insurance_update.html

Personally, I am more interested in a comparison of the non-monetary provisions between USA Gymnastics and BSA plans.

[CynicalScouter]

4 minutes ago, RememberSchiff said:

Personally, I am more interested in a comparison of the non-monetary provisions between USA Gymnastics and BSA plans.

2. USAG’s Non-Monetary Commitments And Reforms.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47282/c66b1b09-6d90-4e99-85c9-243103212938_1552.pdf

It goes on for 4 pages. My own synopsis (many of these reforms are listed as already happened/have happened).

1. Points 1-4 dealt with governance of the organization.
2. Point 5-7 are safety. The adoption of "a new Safe Sport Policy, which mandates reporting, defines specific types of misconduct, sets standards to prohibit “grooming” behavior, and establishes greater accountability." https://usagym.org/pages/education/safesport/policy.html The expansion of the Safe Sport Department to train and educate, including a Director of Safe Sport Education and Policy, a Safe Sport Legal Counsel, four Safe Sport Investigators, a Safe Sport dministrative Manager, and paralegal with dedicated Safe Sport responsibilities plus reporting posters indicating how to report abuse everywhere
3. Points 6-7 are about the "gymnastics clubs" in local areas. They must met the same standards as USA Gymnastics regarding Safe Sport Policy, posters, Minor Athlete Abuse Prevention Policy, etc. Each local club must also have a Safety Champion to ensure compliance.
4. Point 8 is that all USAG employees are charged with doing everything the can in their capacities to work on athlete safety.
5. Point 9 is the establishment of a hotline, email, and website for reporting abuse. All reports must go to an independent third party (U.S. Center for Safe Sport)
6. Point 10 is that USAG will work with a Survivors committee and the independent U.S. Center for Safe Sport.
7. Point 11 is that USAG's version of the ineligible volunteer file will be made public with the names of ineliglble and suspended members listed on a website.
8. Point 12 is websites, training, and other education about athlete safety.
9. Point 13 is that National Team Athletes have a spelled out detailed right to a Protest Policy that allows them to speak out about abuses, or anything, and NOT lose their spot on the National team
10. Points 14-17 are about the culture, including positive coaching, audits about the culture, etc.

There are other points, but it wraps up with this

Quote

The  Debtor  and  the  Survivors’  Committee  are  discussing  a  process  to provide for historical accountability, healing for all stakeholders, with focus on the survivors, and future supervision, monitoring, auditing and implementation of the Plans’ Non-Monetary Commitments.  The  Survivor’s  Committee  and  the  Debtor  commit  to  continued  discussions regarding  the  hiring  of  an  independent,  trauma-informed  Expert,  with  experience  in  childhood sexual abuse involving betrayal trauma/institutional betrayal. The Survivors’ Committee and the Debtor  commit  to  continued  discussions  about  the  work  and  make-up  of    a  Restorative  Justice Task Force.

 

[RememberSchiff]

46 minutes ago, CynicalScouter said:

2. USAG’s Non-Monetary Commitments And Reforms.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47282/c66b1b09-6d90-4e99-85c9-243103212938_1552.pdf

It goes on for 4 pages. My own synopsis (many of these reforms are listed as already happened/have happened).

1. Points 1-4 dealt with governance of the organization.
2. Point 5-7 are safety. The adoption of "a new Safe Sport Policy, which mandates reporting, defines specific types of misconduct, sets standards to prohibit “grooming” behavior, and establishes greater accountability." https://usagym.org/pages/education/safesport/policy.html The expansion of the Safe Sport Department to train and educate, including a Director of Safe Sport Education and Policy, a Safe Sport Legal Counsel, four Safe Sport Investigators, a Safe Sport dministrative Manager, and paralegal with dedicated Safe Sport responsibilities plus reporting posters indicating how to report abuse everywhere
3. Points 6-7 are about the "gymnastics clubs" in local areas. They must met the same standards as USA Gymnastics regarding Safe Sport Policy, posters, Minor Athlete Abuse Prevention Policy, etc. Each local club must also have a Safety Champion to ensure compliance.
4. Point 8 is that all USAG employees are charged with doing everything the can in their capacities to work on athlete safety.
5. Point 9 is the establishment of a hotline, email, and website for reporting abuse. All reports must go to an independent third party (U.S. Center for Safe Sport)
6. Point 10 is that USAG will work with a Survivors committee and the independent U.S. Center for Safe Sport.
7. Point 11 is that USAG's version of the ineligible volunteer file will be made public with the names of ineliglble and suspended members listed on a website.
8. Point 12 is websites, training, and other education about athlete safety.
9. Point 13 is that National Team Athletes have a spelled out detailed right to a Protest Policy that allows them to speak out about abuses, or anything, and NOT lose their spot on the National team
10. Points 14-17 are about the culture, including positive coaching, audits about the culture, etc.

There are other points, but it wraps up with this

 

Thanks! I like the size and composition of their restructured Board

2. USAG’s Non-Monetary Commitments And Reforms.  (page 22 of 100 in pdf above)

Before the Petition Date, the Debtor implemented a streamlined Board structure, reducing the number of directors from 21 to 15 and requiring a majority of the Board to be independent directors. In November 2020, the Debtor adopted Amended and Restated Bylaws, which further changed the Board structure. The Board continues to have 15 members, now comprised of 8 independent directors, 5 athlete representatives, 1 national membership director, and 1 affiliated organizations Director. At least 1 of USAG’s directors will be a survivor. At least 1 member of USAG’s Safe Sport Committee and at least 1 member of USAG’s Athlete Health and Wellness Council will be a survivor. The Survivors’ Committee is working on a proposed process to nominate and/or select the survivors to fill these positions.

Any complaints about individuals holding positions on the USAG board or standing committee member over whom the USAG board has oversight or removal capabilities will be addressed by the USAG board at the next board meeting following the complaint, or within 30 days, whichever is earlier.

The Debtor hired a new President and CEO, who has met nearly one thousand stakeholders, including survivors, to hear their perspectives on how to improve athlete safety and the organization overall.

The Debtor updated its bylaws and policies to strengthen Safe Sport provisions and complaint processing. These updates include: creating a permanent Safe Sport Committee; increasing the number of independent directors to eight; removing the President from a role in the processing of complaints; easing complaint filing requirements; delineating responsibilities of the Board and president more clearly; and providing for the publication of the names of members who have been suspended or placed on the permanently ineligible list as part of the disciplinary process.

...

 

Edited September 2, 2021 by RememberSchiff

[CynicalScouter]

1 minute ago, RememberSchiff said:

Thanks! I like the size and composition of their restructured Board

It was noted several times during the bankruptcy hearings for BSA that the BSA Board was 70+ people which in the private sector is just insane.

The problem is everybody wants seats at the table.

[RememberSchiff]

Supposedly the BSA Executive Board will downsize to 40. IMHO, 40 is still too large. Compare to 4-H and Y.  Again IMHO, no members of the Executive Committee should chair, serve, or vote on the Board.  Simplify.

 

https://www.scouting.org/wp-content/uploads/2020/10/Charter_Bylaws_Sept20.pdf

The Executive Board of the Corporation shall consist of:

Regular Members
Clause 1. Not to exceed 64 regular members who shall be elected at the annual meeting of the Corporation
for 1-year terms. The number of board members comprising the Executive Committee shall not be included
in the regular member total.

Effective the later of May 2021, or the first National Annual Meeting following the Corporation’s emergence
from Chapter 11, the Executive Board shall be comprised of not more than 40 regular members, including
members of the Executive Committee, who shall be elected at the annual meeting of the Corporation for 1-
year terms. Ex officio members shall not be included in the regular member total.

 

Edited September 2, 2021 by RememberSchiff

[RememberSchiff]

From the 118 page USA Gymnastics Board of Directors Handbook which by the way, not only lists members names but provides their bios and photos.

USA Gymnastics is a mission-driven organization that exists to build a community and culture of health, safety, and excellence, where athletes can thrive in sport and in life. We put what is best for our community at the heart of everything we do and every decision we make. With all of our actions, we are guided by a collective and unwavering commitment to ethical conduct and our core values of:

SAFETY – We promote a safe and inclusive environment for our athletes and our community.
ACCOUNTABILITY – We hold ourselves responsible and accountable for all of our actions.
INTEGRITY – We act with absolute integrity through values-based actions.
TRANSPARENCY – We operate and communicate with transparency.
LISTENING – We treat our community with the utmost respect, and listen to their challenges and perspectives.

These principles guide our engagement with our community, and our engagement within our broader USA Gymnastics team. Together, grounded in our values, we know we can thoughtfully approach rebuilding our organization, while setting and leading a sustainable strategic vision for the future.

Their Board Minutes are posted online.

Edited September 2, 2021 by RememberSchiff

[RememberSchiff]

19 hours ago, RememberSchiff said:

“The non-monetary provisions of this plan are absolutely key,” Rachel Denhollander said. “It is reform and change for the next generation. If U.S.A.G. does indeed work with survivors to see these provisions through, it would be groundbreaking.”

 

From Rachel Denhollander's  full victim impact statement to Judge Aquiliana.

...Look around the courtroom, remember what you have witnessed these past seven days. This is what it looks like when someone chooses to put their selfish desires above the safety and love for those around them and let it be a warning to us all and moving forward as a society, This is what it looks like when the adults in authority do not respond properly to disclosures of sexual assault.

This is what it looks like when institutions create a culture where a predator can flourish unafraid and unabated and this is what it looks like when people in authority refuse to listen, put friendships in front of the truth, fail to create or enforce proper policy and fail to hold enablers accountable. ...

Other comments in a recent Michigan Public Radio interview from Rachel Denhollander, an attorney and former gymnast. 

https://www.npr.org/2021/08/09/1026114066/gymnastics-larry-nassar-survivor-rachael-denhollander

On whether Nassar's conviction meant the end of widespread abuse in U.S. gymnastics:

"Oh, absolutely not. You know, actually, yesterday was five years to the day from the first Indy Star article coming out about the corruption in [USA Gymnastics], and it had nothing to do with Larry. Because what's been going on in [USA Gymnastics] is an entire system of abuse, a system of covering up sexual abuse, not just by Larry, but by its member coaches, a system of covering up physical abuse and abusive framework that allowed our athletes to be systematically and routinely starved and isolated from their parents. Larry was not the problem. Larry was a symptom of the problem."

On whether there are still sexual abusers within the gymnastics industry who haven't been brought to justice yet:

"I know for a fact that there are, because I know the victims. Added to that, we've been in bankruptcy proceedings with [USA Gymnastics] for the last three years. Two years ago, we had a hearing where I had the opportunity to ask the chief financial officer of [USA Gymnastics] some specific questions. And I asked him, has anybody taken those 50 files that the Indy Star reported on? Has anybody taken those files and looked to see if any of those coaches are still coaching? Not only had they not done that, they didn't even know what I meant."

[RememberSchiff]

US Gymnastics President and CEO Position Specification

https://www.usagym.org/PDFs/About USA Gymnastics/ceospecs.pdf   (5 pages)

[RememberSchiff]

Feb, 2019 ...Li Li Leung has been appointed president and chief executive officer following an extensive search conducted by the Board of Directors, which included surveying a wide range of members in the gymnastics community on the best qualifications and attributes for a candidate to be successful.

“Li Li’s unique combination of business skills, management experience and passion for gymnastics make her perfectly suited to lead our organization at this important time in our history,” said Kathryn Carson, USA Gymnastics Board chair. “She brings strong leadership, organizational and communication skills from her over two-decade professional career in sports business and management. She also has deep roots in gymnastics, having competed at a high level before moving to collegiate gymnastics. We are thrilled to have Li Li as our next president and CEO, and the Board looks forward to supporting Li Li as she delivers her vision to transform and strengthen our organization and culture.”

Leung most recently served as a vice president at the National Basketball Association (NBA), where ...

more at

https://www.usagym.org/pages/post.html?PostID=23308

Edited September 2, 2021 by RememberSchiff

[RememberSchiff]

For 2019, Li Li Leung's salary was reported as  $376,724 with $11,125 as other compensation.

https://usagym.org/PDFs/Forms/Special forms/IRS990-2019.pdf

Edited September 2, 2021 by RememberSchiff

[RememberSchiff]

Update: USA Gymnastics Plan 2

Oct 25, 2021: U.S. Bankruptcy Judge Robyn Moberly signed off disclosure statement for vote.

"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 proposal is nearly double the one which was rejected and criticized by many of Nassar’s victims last year, totaling $215 million/"

Nov 29, voting deadline

Dec 2,  voting results released

Dec 13, if accepted, hearing for court approval begins

https://www.reuters.com/legal/transactional/usa-gymnastics-send-plan-resolve-sex-abuse-claims-vote-2021-10-25/

https://www.insidethegames.biz/articles/1114641/usa-gymnastics-settlement-plan-vote

Edited November 5, 2021 by RememberSchiff

[RememberSchiff]

12/02/2021: Certification of Ballot Report

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47282/7a169928-8e6d-4ee4-8fd3-394f0ff17b5d_1732.pdf

page 11, Class 6 Claims (partial screenshot).  I had thought there were 525 claimants but Professor Jacoby has the number at 510. Votes received 505 of which 476 were determined valid, 29 invalid.

Edited December 3, 2021 by RememberSchiff

[RememberSchiff]

12/03/2021:  However... U.S. Trustee Objection to Third Amended Chapter 11 Plan of Reorganization proposed by USA Gymnastics and Additional TCC of Sexual Abuse Survivors

The Plan should not be confirmed as the non-consensual third-party releases violate the Bankruptcy Code and Seventh Circuit law, and the Bankruptcy Court lacks constitutional authority to adjudicate, and thus impose releases of, the state law Abuse Claims at issue. Moreover, the Debtor’s release of many of the estate’s claims for little to no financial contribution does not satisfy the applicable standards under section 1123(b)(3)(A) and directly harms the Abuse Claimants and other creditors. The U.S. Trustee requests that this Court deny confirmation of the Plan.

https://casedocs.omniagentsolutions.com/cmsvol2/pub_47282/0040a202-5e2a-48b7-99a5-f6df629ea023_1734.pdf

Case 18-09108-RLM-11 Dockets:

https://cases.omniagentsolutions.com/documents?clientid=CsgAAncz%2b6bcQ9xJsUS6kVRkbXTeWvylnPGR%2fbOwF7Mdnp%2bg4lFF6ZDffFn1%2bVXZdb3DCv1%2f7g0%3d&tagid=1034&noFrom=18-09108-RLM-11

Edited December 3, 2021 by RememberSchiff