Embattled USA Gymnastics files for bankruptcy

Dec 5 (Reuters) - USA Gymnastics, the sport's governing body, filed for bankruptcy on Wednesday, the latest blow for an organization that has struggled to recover from scandal after former national team doctor Larry Nassar sexually abused hundreds of gymnasts.

The organization filed for protection from creditors in U.S. Bankruptcy Court in Indianapolis, according to court records.

"Our organization is a financially solid going concern but for the hundred lawsuits that we do have out there," Kathryn Carson, the chairwoman of the USAG board, said on a conference call with reporters. "That is the primary reason that we made this filing, to use the Chapter 11 process as a vehicle for resolving those claims."

RELATED: Victims of Larry Nassar confront him in court

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Victims of Larry Nassar confront him in court
Victim Rachael Denhollander speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 24, 2018. REUTERS/Brendan McDermid
Abuse victim Jessica Thomashow addresses former Michigan State University and USA Gymnastics doctor Larry Nassar during the sentencing phase in in Eaton, County Circuit Court on January 31, 2018 in Charlotte, Michigan. The number of identified sexual abuse victims of former USA Gymnastics doctor Larry Nassar has grown to 265, a Michigan judge announced Wednesday as a final sentencing hearing commenced. Prosecutors said at least 65 victims were to confront Nassar in court, in the last of three sentencing hearings for the disgraced doctor who molested young girls and women for two decades in the guise of medical treatment. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
Erin Blayer, a victim of former Michigan State University and USA Gymnastics doctor Larry Nassar during the sentencing phase in Eaton, County Circuit Court on January 31, 2018 in Charlotte, Michigan. The number of identified sexual abuse victims of former USA Gymnastics doctor Larry Nassar has grown to 265, a Michigan judge announced Wednesday as a final sentencing hearing commenced. Prosecutors said at least 65 victims were to confront Nassar in court, in the last of three sentencing hearings for the disgraced doctor who molested young girls and women for two decades in the guise of medical treatment. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
Tiffany Dutton, ,a victim of former Michigan State University and USA Gymnastics doctor Larry Nassar stands with her husband Chad, during the sentencing phase in Eaton, County Circuit Court on January 31, 2018 in Charlotte, Michigan. The number of identified sexual abuse victims of former USA Gymnastics doctor Larry Nassar has grown to 265, a Michigan judge announced Wednesday as a final sentencing hearing commenced. Prosecutors said at least 65 victims were to confront Nassar in court, in the last of three sentencing hearings for the disgraced doctor who molested young girls and women for two decades in the guise of medical treatment. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
Victim Kaylee Lorincz wipes tears as she speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 24, 2018. REUTERS/Brendan McDermid
Victims and others look on as Rachael Denhollander speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 24, 2018. REUTERS/Brendan McDermid
Sterling Riethman speaks as former Michigan State University and USA Gymnastics doctor Larry Nassar listens during impact statements during the sentencing phase in Ingham County Circuit Court on January 24, 2018 in Lansing, Michigan. More than 100 women and girls accuse Nassar of a pattern of serial abuse dating back two decades, including the Olympic gold-medal winners Simone Biles, Aly Raisman, Gabby Douglas and McKayla Maroney -- who have lashed out at top sporting officials for failing to stop him. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
Former Michigan State University and USA Gymnastics doctor Larry Nassar gives an impact statement during the sentencing phase in Ingham County Circuit Court on January 24, 2018 in Lansing, Michigan. More than 100 women and girls accuse Nassar of a pattern of serial abuse dating back two decades, including the Olympic gold-medal winners Simone Biles, Aly Raisman, Gabby Douglas and McKayla Maroney -- who have lashed out at top sporting officials for failing to stop him. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
LANSING, MI - JANUARY 17: Kayla Spicher delivers a victim impact statement at the sentencing hearing for Larry Nassar who has been accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: With her mother by her side, Kayla Spicher (R) delivers a victim impact statement at the sentencing hearing for Larry Nassar who has been accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: With her mother by her side, Helena Weick delivers a victim impact statement at the sentencing hearing for Larry Nassar who has been accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: Larry Nassar (R) listens to a victim impact statement from Tiffany Lopez during his sentencing hearing after being accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: Larry Nassar listens to victim impact statements during his sentencing hearing after being accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: Larry Nassar (R) listens to a victim impact statement from Jeanette Antolin during his sentencing hearing after being accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
LANSING, MI - JANUARY 17: Gwen Anderson, standing with her former gymnastics coach Tom Brennen, reads a victim impact statement during Larry Nassar's sentencing hearing on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. More than 100 women and girls have accused Nassar of molesting them. (Photo by Scott Olson/Getty Images)
Victim Emma Ann Miller (C) speaks along side her mother Leslie Miller (R) at the sentencing hearing for Larry Nassar, (L) a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
LANSING, MI - JANUARY 17: With her husband by her side, Chelsea Williams delivers a victim impact statement at the sentencing hearing for Larry Nassar who has been accused of molesting more than 100 girls while he was a physician for USA Gymnastics and Michigan State University, where he had his sports-medicine practice on January 17, 2018 in Lansing, Michigan. Nassar has pleaded guilty in Ingham County, Michigan, to sexually assaulting seven girls, but the judge is allowing all his accusers to speak. Nassar is currently serving a 60-year sentence in federal prison for possession of child pornography. (Photo by Scott Olson/Getty Images)
Abuse victim Jessica Thomashow addresses former Michigan State University and USA Gymnastics doctor Larry Nassar during the sentencing phase in Eaton, County Circuit Court on January 31, 2018 in Charlotte, Michigan. The number of identified sexual abuse victims of former USA Gymnastics doctor Larry Nassar has grown to 265, a Michigan judge announced Wednesday as a final sentencing hearing commenced. Prosecutors said at least 65 victims were to confront Nassar in court, in the last of three sentencing hearings for the disgraced doctor who molested young girls and women for two decades in the guise of medical treatment. / AFP PHOTO / JEFF KOWALSKY (Photo credit should read JEFF KOWALSKY/AFP/Getty Images)
Victim Hannah Morrow speaks at the sentencing hearing for Larry Nassar, (L) a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 19, 2018. REUTERS/Brendan McDermid
Victim Kaylee McDowell speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 19, 2018. REUTERS/Brendan McDermid
Victim and former gymnast Aly Raisman appears before speaking at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 19, 2018. REUTERS/Brendan McDermid
Victim and former gymnast Aly Raisman appears before speaking at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 19, 2018. REUTERS/Brendan McDermid
Victim and former gymnast Bailey Lorencen speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
Victim Clasina Syrovy speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, sits in the courtroom during his sentencing hearing in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
Circuit Court Judge Rosemarie Aquilina presides over the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
Victim Clasina Syrovy speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 22, 2018. REUTERS/Brendan McDermid
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Nassar was sentenced to up to 300 years in prison in two different trials in Michigan last February after more than 350 women testified about abuse at his hands.

The scandal prompted the entire board of directors at USA Gymnastics to resign, along with the president and athletic director at Michigan State University, where Nassar also worked.

The filing could complicate efforts by Nassar’s victims to recover damages from the organization through lawsuits. Typically, a bankruptcy petition will temporarily halt any litigation while the process unfolds in bankruptcy court.

In its bankruptcy petition, the organization listed between $50 million and $100 million in assets and the same amount in liabilities.

Among the biggest unsecured claims listed in the filing is a $340,000 severance payment for former Chief Executive Steve Penny, who resigned in March 2017 amid criticism of the way USAG handled the Nassar abuse scandal. The payment is “disputed,” according to the filing.

(Reporting by Joseph Ax, Brendan O'Brien and Frank Pingue; editing by Leslie Adler and Jonathan Oatis)

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