USA Gymnastics gets OK of commitments for $800,000 in DIP financing

By Sarah Lizee

Olympia, Wash., May 17 – USA Gymnastics obtained court approval to access $800,000 in debtor-in-possession financing, according to a final order filed Friday with the U.S. Bankruptcy Court for the Southern District of Indiana.

Virginia Surety Co., Inc. has agreed to provide $500,000 of the financing, and Great American Assurance Co. will provide $300,000.

Both DIP credit agreements will mature on the earliest of March 30, 2020, the effective date of a Chapter 11 plan, the closing date of a sale of all or substantially all of USA Gymnastics’ assets, dismissal or conversion of the Chapter 11 case, termination of an agreed stay of litigation related to any pre-bankruptcy insurance coverage provided by the DIP lenders or other general liability insurer and acceleration of the loans.

Both facilities will accrue interest at a rate of 4%.

The financing will be used to fund the costs of USA Gymnastics’ day-to-day operations and bankruptcy case and to preserve the value of its assets.

The Indianapolis-based gymnastics organization filed bankruptcy on Dec. 5, 2018 under Chapter 11 case number 18-09108.

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