A bankruptcy judge "backed USA Gymnastics in its lawsuit to get one of the small business loans created by Congress to cover payroll costs during the coronavirus pandemic, saying the embattled national body is likely to succeed in defeating the federal government’s rule excluding organizations in bankruptcy from obtaining the loans," according to Louise Radnofsky of the WALL STREET JOURNAL. USAG filed for bankruptcy in December '18, which "halted depositions and discovery in the [Larry Nassar] lawsuits, for which mediation negotiations have dragged on for more than two years." It also "halted the USOPC’s decertification efforts," creating an opportunity for USAG to "seek a reprieve." However, the effort had an "unexpected consequence" when USAG and other NGBs "found themselves on the brink of a new financial crisis." USAG's bankruptcy lawyer Catherine Steege yesterday "argued in bankruptcy court in Indianapolis that Congress had intended for any small business to have access to the loans." Steege said that the organization’s finances "faced an 'enormous strain' because of expenses incurred before the shutdown." She added USAG had a “very real and present need for these funds,” and that it "needed a speedy answer from the courts to facilitate 'its successful reorganization'" (WALL STREET JOURNAL, 6/10).
