It’s been a long year of waiting for the hundreds of female gymnasts sexually assaulted by former Olympic team physician Larry Nassar who filed lawsuits against USA Gymnastics, forcing the organization into bankruptcy.
A long year of waiting — for nothing, reports the Washington Post, noting that the legal fight over the organization’s money “has yet to produce a dollar for an abuse victim.”
But, the Post says, the lawyers are doing just fine.
“USA Gymnastics’ bankruptcy has been a lucrative endeavor, according to a review of court filings and interviews with experts, who said the $1,000-plus hourly rates charged by the case’s top attorneys rank as extremely high for a bankruptcy of this size involving sexual abuse victims,” the Post says.
In fact, the newspaper reports, three of the lawyers “have billed more than $600,000 individually in the first year of the case, according to a review of legal bills filed in court, part of more than $7 million in legal fees approved, by a judge, on a preliminary basis.”
Not all the lawyers involved in the case support their colleagues.
“It’s outrageous . . . and the only losers are the kids here,” Jonathan Little, an Indianapolis attorney representing four victims told the Post. “Millions of dollars are not going to be there, when this is all over, for these kids.”
In sexual abuse cases, the Post says, citing legal experts, “lawyers commonly discount rates … sometimes by as much as 40 percent — to ensure legal fees don’t overly deplete the amount of money left for victims.”
Central to this concern is that USA Gymnastics doesn’t have nearly as much money as many big corporations.
“Corporate bankruptcy work can be among the most lucrative legal disciplines,” the Post says, “but $1,000-plus hourly rates are more commonly seen in cases involving organizations with $500 million or more in assets — or more than six times the size of USA Gymnastics, which has listed $84 million in assets.”
James Stang, the lawyer hired by Nassar victims to represent their interests — “perhaps the nation’s preeminent attorney in bankruptcies involving sex abuse,” the Post says — isn’t discounting his services at all.
“While charging $1,145 hourly to represent victims in the USA Gymnastics case, Stang is charging $700 per hour to represent victims in the bankruptcy of the Catholic diocese of Rochester NY, records show, and $675 per hour to work for victims in the bankruptcy of the Catholic diocese of Santa Fe NM,” the newspaper says, adding that Stang “declined to discuss” his reasons.
In its analysis of billing by Stang’s firm, Pachulski Stang Ziehl & Jones, the Post says, the bills would have been about half a million dollars less if fees in the USA Gymnastics case at $675 per hour, the discount applied in the New Mexico bankruptcy.
The Post interviewed Erin Kaufman, now 36, who was assaulted by Nassar more than 20 times during her career as a young gymnast, starting when she was only 9 years old.
Kaufman, the Post says, “expressed confusion when told the lawyer working for her against USA Gymnastics was also working with victims against the Catholic Church for significantly less.”
In January 2018, Nassar was sentenced to 175 years in prison.
Rob Kugler, a Minneapolis attorney the Post describes as “Stang’s main competitor in the niche market of abuse-related bankruptcies,” says there is “nothing about [the USA Gymnastics] case that justifies fees of $1,000 an hour. There just isn’t.”
Meanwhile, the newspaper reports, Jenner & Block, the firm hired by USA Gymnastics to represent its interests, is discounting its services by 10 percent — “but even at reduced rates the firm has billed more than $3.1 million.”
And win or lose, the fees billed by lawyers on both sides are paid out of the bankrupt corporation’s assets — with every dollar cutting into what the victims may eventually divide.
