USA Rugby, its financial troubles exacerbated by the coronavirus pandemic, has filed for bankruptcy, the federation said on Monday.
In a statement posted on its website, USA Rugby said it had filed for Chapter 11 bankruptcy, which allows financially struggling organizations to reorganize and restructure debt.
“Existing financial challenges have been accelerated by the impact of the Covid-19 pandemic on rugby activities,” USA Rugby said.
Sport around the world has been brought to a virtual standstill by the COVID-19 pandemic as authorities banned large gatherings in a bid to slow the spread of the virus.
USA Rugby said the suspension of competition resulted in “significant loss of revenue from spring and summer membership dues, sponsorship drawbacks and additional revenue sources.”
The bankruptcy filing includes a plan for a financial support package approved by the executive committee of the global governing body World Rugby.
That will bolster the federation through reorganization, with World Rugby and other creditors to sign off on an eventual restructuring plan.
The men’s and women’s national teams, in 15s and Sevens, will continue “to compete as normal” when rugby returns after the pandemic.
“While the current climate is of course much larger than rugby, we remain focused with stakeholders and supporters in the continued effort toward a balanced rugby community where the game can truly grow,” USA Rugby chair Barbara O’Brien said.
Source: HindustanTimes