USA Rugby votes to file for bankruptcy in bid to reorganize and stay alive

USA Rugby, the sport's governing body south of the border, has voted to officially file for Chapter 11 bankruptcy "as a result of compounded and insurmountable financial constraints."

In a statement on its website, USA Rugby said the suspension of sanctioned rugby activities due to COVID-19 "has accelerated the existing financial challenges facing the Union, and a reorganization process will now be progressed with input from World Rugby."

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It said the COVID-19 loss of revenue followed a "budgetary overspend" in 2019.

The Chapter 11 bankruptcy option was presented to the USA Rugby Congress over the weekend and approved by an "overwhelming vote."

"This is the most challenging period this organization has faced and all resolves were never taken lightly in coming to this determination," USA Rugby chair Barbara O'Brien said in a statement.

"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."

The Chapter 11 filing comes with a financial support package approved by World Rugby that the U.S. organization say will "protect and support" the men's and women's sevens and fifteens programs as they continue to compete on the world stage.

The American men are currently ranked 16th in the world, compared to No. 23 for Canada. The U.S. women are seventh.

On the sevens circuit, the U.S. men stand seventh overall while the women are fifth.

World Rugby and other creditors will have to review and endorse final court-approved restructuring plans.

The Chapter 11 filing comes with "significant staff and budget reductions" at USA Rugby's national office although the statement did not provide details.

This report by The Canadian Press was first published March 30, 2020.

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