Olympics’ $380M Nassar Settlement: Reforms, Payouts, Trust Claims

The Nassar $380 million settlement is the agreement, confirmed by U.S. Bankruptcy Judge Robyn Moberly on December 13, 2021, in which USA Gymnastics, the U.S. Olympic and Paralympic Committee, and their insurance carriers funded a trust to compensate more than 300 survivors of Larry Nassar’s sexual abuse and let USA Gymnastics exit Chapter 11 bankruptcy.¹ The deal resolved hundreds of civil claims against the sport’s national governing body and its Olympic parent, and it required USA Gymnastics to overhaul its board, its athlete-safety program, and its member-club oversight. Combined with a separate $500 million Michigan State University settlement and a later $138.7 million payment from the U.S. Justice Department over the FBI’s handling of the case, total compensation to Nassar survivors has exceeded $1 billion.²

How the Deal Came Together

Larry Nassar was the team physician for USA Gymnastics and also worked at Michigan State’s sports medicine clinic. Over roughly two decades he sexually abused athletes under the pretext of medical treatment. He was arrested in 2016, pleaded guilty, and was sentenced to what amounted to decades in prison.³

By the time he was sentenced, survivors had filed more than 100 lawsuits against USA Gymnastics, alleging the organization had failed to investigate abuse complaints.⁴ On December 5, 2018, USA Gymnastics filed a voluntary Chapter 11 petition in the Southern District of Indiana, Case No. 18-09108-RLM-11.¹ That filing triggered an automatic stay that halted the pending civil suits, a move survivors said blocked them from pressing discovery against the organization and its officers.

The plan of reorganization was drafted jointly by USA Gymnastics and the Additional Tort Claimants Committee of Sexual Abuse Survivors, the creditors’ committee representing claimants, with counsel from Pachulski Stang Ziehl & Jones and Rubin & Levin.⁵ More than three years of mediation preceded a vote. Survivors and other creditors approved the plan on November 29, 2021, and Judge Moberly confirmed it two weeks later.¹

Who Paid What

The $380 million was pooled into a trust for survivors. Contributions came from three sources.

The U.S. Olympic and Paralympic Committee put in $34 million in direct cash and extended a $6 million loan to USA Gymnastics.⁶ USA Gymnastics itself and the two organizations’ insurance carriers supplied the remainder. The carrier-by-carrier breakdown was not publicly disclosed.

Separately, insurers for Twistars USA Gymnastics Club — the Michigan gym owned by former national team coach John Geddert, where three of Nassar’s ten sexual-assault convictions arose — contributed $2.1 million as participating parties in the plan.⁷

The Insurance Coverage Fight

Getting insurers to pay was not automatic. USA Gymnastics had to litigate whether its policies even applied to sexual-abuse claims. In USA Gymnastics v. Liberty Insurance Underwriters, Inc., 27 F.4th 499 (7th Cir. 2022), the Seventh Circuit held that Liberty’s directors-and-officers policy covered the majority of survivor claims. The court reasoned that only the ten counts Nassar pleaded guilty to were “finally adjudicated” and thus excluded under the policy’s dishonest-act exclusion; claims tied to dismissed lawsuits or non-prosecution agreements remained covered. Liberty’s petition for rehearing was denied on March 28, 2022.⁸ That ruling forced insurance money into the trust.

How Claims Get Paid From the Trust

The plan channels all abuse claims against USA Gymnastics into the trust through what the bankruptcy court called a Channeling Injunction. Individual lawsuits against the organization for abuse claims are barred going forward; the trust is the exclusive route to compensation.⁵

The plan also anticipates survivors who had not yet come forward. It sets aside a reserve and appoints a future claimant representative to protect their interests.⁵ The Survivors’ Committee developed and approved the allocation schedule that determines how individual awards are calculated from the trust.¹ As of late 2024, the last legal settlement had been paid out.⁹

The Reforms USA Gymnastics Had to Accept

The settlement was not only money. The confirmed plan bound USA Gymnastics to structural changes across governance, athlete safety, and member-club oversight.

A Reconstituted Board

The USA Gymnastics board was cut from 21 members to 15: eight independent directors, five athlete representatives, one national team director, and one affiliated organizations director. The plan requires that at least one board member, one member of the SafeSport Committee, and one member of the Athlete Health and Wellness Council be a survivor of abuse.¹⁰ The USOPC also resolved a pending Section 8 complaint against USA Gymnastics, allowing it to keep its status as the sport’s national governing body.¹

Expanded Athlete Safety

USA Gymnastics expanded its SafeSport department to include a director of education and policy, a lawyer, four investigators, an administrative manager, and a paralegal, all reporting to a new chief of athlete wellness. The president was removed from any role in processing complaints. The organization was required to ease complaint-filing requirements, roll out a reporting portal reachable by QR code and a simplified child-friendly interface, publish lists of suspended and permanently banned members, and run annual culture surveys.¹⁰

Member Club Rules

Member gyms have to adopt USA Gymnastics SafeSport policies, display abuse-reporting posters, and give abuse-prevention pamphlets to athletes and parents. Coaches, volunteers, and owners in regular contact with minors must complete SafeSport training. One-on-one contact between minors and unrelated adults is prohibited. Each club must appoint a “safety champion” and submit to compliance audits.¹⁰

Independent Audits

Attorney Deborah Daniels of Krieg DeVault LLP, who had written a 2017 report of 70 recommendations for USA Gymnastics, was retained to audit progress. Her follow-up audit, submitted on February 23, 2021, concluded that the organization had made “significant forward progress” and “fully satisfied the proposals for change” on the vast majority of the 70 recommendations, while flagging unfinished work including a club safety review and certification program then targeted for June 30, 2023.¹¹

Restorative Justice

USA Gymnastics and the Survivors’ Committee committed to continued discussions about a Restorative Justice Task Force, including the hiring of an independent, trauma-informed expert to address institutional betrayal and historical accountability.¹⁰

The Other Settlements Survivors Received

The $380 million from USA Gymnastics and the USOPC is one of three major pots. Anyone looking at the totals should keep them separate.

Michigan State University — $500 million (2018). In May 2018, Michigan State and attorneys for 332 survivors announced a global settlement: $425 million for current claimants and $75 million reserved in trust for future claimants alleging abuse by Nassar. MSU completed its payment to the court-created survivor fund by December 4, 2018.¹²¹³

U.S. Justice Department — $138.7 million (2024). An internal FBI review found that agents in the Indianapolis and Los Angeles field offices had knowledge of the allegations in 2015 and 2016 but failed to act. FBI Director Christopher Wray told the Senate in 2021 that agents “failed to stop this monster.” In April 2024, the Justice Department paid $138.7 million to settle 139 claims from more than 100 people who alleged the FBI grossly mishandled the investigation.³

What Survivors Said About the Deal

Rachael Denhollander, the first person to publicly accuse Nassar, wrote on social media that “this chapter is finally closed,” while adding elsewhere that “this needs to end with real justice and real reform.”¹⁴ She said the settlement’s non-monetary provisions reflected hard work by the survivors’ committee.¹⁵

Lead plaintiffs’ attorney John Manly credited the “courage and tenacity of the survivors” and said the fight was not over, pointing to calls for criminal prosecution of FBI officials and other USA Gymnastics and USOPC officials who allegedly obstructed investigations.¹⁵ Simone Biles, in Senate testimony in September 2021, blamed “an entire system that enabled and perpetrated this abuse.”¹⁴

Survivors have said publicly that while the payments represent institutional accountability, they do not undo the underlying harm.⁹

1
USA Gymnastics. Settlement With Survivors Approved by Court, USA Gymnastics to Exit Bankruptcy
2
InvestigateTV. Money Doesn’t Heal: Larry Nassar’s Survivors Speak Out After Legal Settlements
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KCRA. Larry Nassar Victims FBI Deal
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Emory Law Scholarly Commons. USA Gymnastics Bankruptcy and Survivor Claims
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Courthouse News. Third Amended Joint Chapter 11 Plan of Reorganization for USA Gymnastics
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Washington Post. USA Gymnastics Larry Nassar Settlement
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Lansing State Journal. Twistars John Kathryn Geddert USA Gymnastics Nassar Settlement
8
Anderson Kill. Seventh Circuit Requires Insurance to Fund Settlement With Victims of Larry Nassar’s Sexual Abuse
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WILX. Money Doesn’t Heal, Say Larry Nassar’s Survivors After Legal Settlements
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Defector. Every Promise Made by USA Gymnastics in the Larry Nassar Settlement
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USA Gymnastics. Deborah Daniels Audit Report
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MSU Today. Larry Nassar Survivors and Michigan State University Announce Successful Resolution
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Michigan State University. Nassar Information
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Morning Brew. Larry Nassar Abuse Survivors Gymnastics Reach Settlement
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ABC News. Nassar Victims Reach $380 Million Settlement With USAG, USOPC