The wheels of the U.S. Bankruptcy Court are now spinning on the USA Gymnastics filing for Chapter 11 Bankruptcy protection, with the posting of an order opening a two-month time period for sexual-abuse claims to be filed against USA Gymnastics.
The order states that “on February 25, 2019, the Court entered an order (the “Bar Date Order”) establishing certain claims bar dates in the Debtor’s chapter 11 case. By the Bar Date Order, the Court established April 29, 2019 at 4:00 p.m. (prevailing Eastern Time), as the date by which Sexual Abuse Claims must be filed the (“Sexual Abuse Claims Bar Date”).
“The Bar Date Order requires that Survivors holding pre-petition claims arising from sexual abuse for which they believe the Debtor may be liable must file proofs of claim with Omni Management Group, the Court-appointed claims and noticing agent in this case (the “Claims Agent”), so that their proofs of claim are received by the Claims Agent on or before the Sexual Abuse Claims Bar Date.”
The California-based Omni Management Group has set up a separate Web site to process the claims, but the clock is now ticking. And the Court’s order is very specific about the stakes for those abused:
ANY SURVIVOR THAT IS REQUIRED BUT FAILS, TO SUBMIT A PROOF OF CLAIM IN ACCORDANCE WITH THE BAR DATE ORDER ON OR BEFORE THE SEXUAL ABUSE CLAIMS BAR DATE WILL BE FOREVER BARRED, ESTOPPED, AND ENJOINED FROM ASSERTING SUCH SEXUAL ABUSE CLAIM AGAINST THE DEBTOR, AND THE DEBTOR AND ITS PROPERTY WILL BE FOREVER DISCHARGED FROM ANY AND ALL INDEBTEDNESS OR LIABILITY WITH RESPECT TO OR ARISING FROM THAT SEXUAL ABUSE CLAIM.
MOREOVER, SUCH SURVIVOR WILL BE PROHIBITED FROM (A) VOTING ON ANY CHAPTER 11 PLAN FILED IN THIS CHAPTER 11 CASE ON ACCOUNT OF SUCH SEXUAL ABUSE CLAIM, AND (B) PARTICIPATING IN ANY DISTRIBUTION IN THIS CHAPTER 11 CASE ON ACCOUNT OF SUCH SEXUAL ABUSE CLAIM.
The filing of a claim is not simple. There is a three-page claim form to be filled out with general information about the claim, including a specific dollar amount requested as damages claimed. Then there is a highly-detailed, eight-page questionnaire asking if the claimant has been “sexually abused by Larry Nassar?,” how many times, where, what was done and whether anyone else was involved.
The claims for damages are addressed through questions about whether the claimant has had medical expenses or mental health expenses related to the abuse, whether the claimant has filed a lawsuit or received a settlement.
These responses are confidential unless the claimant allows them to be public.
A claim can also be made for non-sexual abuse, referred as a “general claim” but with the same due date in April.
This is the start of a long process of validating the many filings from survivors and then determining what funds are available to USA Gymnastics to pay – remember, the federation is already suing seven of its insurers for coverage – and then splitting up whatever is available among the claimants.
Whatever the result, you may rest assured that whatever funds are distributed will be assailed as insufficient. But the process will also bring some clarity to who was abused by Nassar and others that USA Gymnastics had control over, and getting to the truth is always a good outcome.