USA Rugby files for bankruptcy amid shutdown of sport
USA Rugby, the governing body for rugby union, in the country, has filed for Chapter 11 bankruptcy, but is aiming to restructure with the support of World Rugby.
USA Rugby cited “compounded and insurmountable financial constraints” for the move, which has been prompted in part by the global coronavirus pandemic that has forced the suspension of national team games and leagues across the world.
Rugby competitions and activities in USA were halted indefinitely on 20 March.
In a statement on Monday, USA Rugby said: “Given the ongoing financial challenges following a 2019 budgetary overspend, the unplanned loss of income advanced an insurmountable cashflow deficit and immediate action needed to be taken in order to sustain operations within USA Rugby and the rugby community.”
The bankruptcy filing was ratified by the USA Rugby congress at the weekend, and it is reinforced by a financial support package approved by World Rugby, which is intended to revive the national governing body at a governance and financial level, with key milestones, metrics and controls, and enable the men’s and women’s national sevens and 15s teams to continue to compete internationally.
USA Rugby will also enact “significant cost reductions” and retain control of the reorganisation over a 30-day period while World Rugby and other creditors review and endorse final court-approved restructuring plans to enable the national body to emerge from Chapter 11.
Barbara O’Brien, the chair of USA Rugby, said: “This is the most challenging period this organisation has faced and all resolves were never taken lightly in coming to this determination. 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.”
World Rugby has long regarded USA as a potential major growth market, and the country was being lined up as a potential host of the Rugby World Cup in 2027 or 2031.