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A New Chapter For USA Rugby, But What Number?

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A New Chapter For USA Rugby, But What Number?

How will USA Rugby fracture?

Days remain on USA Rugby’s insurance coverage for its directors and officers, insurance coverage that protects them from lawsuits and debts incurred by the organization.

With mounting debts, no income, and the NGB’s law firm demanding a $100,000 payment on the $250,000 owed them so they can continue to represent USA Rugby in the United World Sports lawsuit,, oversight of the sport in the USA is at a crisis moment.

Bad Timing

The COVID-19 shutdown has hurt USA Rugby, just as it has hurt many organizations. USA Rugby can’t provide the service (liability insurance for the games) and so many who would be paying for CIPP right now are not. States like Iowa, Minnesota, Michigan, Montana, Massachusetts, and Wisconsin hadn’t really started their high school seasons, and so players just didn’t sign up. No CIPP signups, no spring cash influx for the cash-strapped USA Rugby.

So the only hope was a bailout from World Rugby. In a document obtained by Goff Rugby Report earlier this week, a USA Rugby memo on the organization’s cash flow, World Rugby apparently declined to send USA Rugby money.

Was it bad timing? Yes, and no. This is the end of the alleyway for USA Rugby, it appears, but there were several moments through the last two years or more that the organization could have stopped and seriously considered reorganization. Putting it off and putting it off and putting it off created this bad timing.

Chapter ... What?

So now to the Chapters. USA Rugby can file for Chapter 11 bankruptcy, submit a plan to reorganize (such as what we outlined here … or below). But Chapter 11 requires at least some funds to be available to go forward. With no income coming from membership or sponsors or events, USA Rugby needs something like a World Rugby bailout grant to stay in existence, change, submit a budget and a plan to the bankruptcy court, and get the OK to keep operating.

But if that doesn’t happen, then it’s Chapter 7, and that means dissolve; trustees come in to liquidate the organization, and it ceases to do business.

 

Constituencies Must Make Their Move

For local organizations, then, the big question is: liability insurance. If USA Rugby goes Chapter 7, there is no liability coverage, and when we all are able to resume normal lives again, there would be no oversight coverage for teams to play.

It would be up to SBOs, the CRA or NSCRO, or new organizations that have to be set up, to secure some insurance coverage to make playing rugby possible.

Some organizations (private schools, colleges, probably NSCRO) would handle it. Others have to move fast.

So that’s what’s happening. National groups on the youth and college and club levels are trying to share information so they can all quickly form national governing bodies for their own piece of the rugby pie. 

USA Rugby officials are desperately trying to convince World Rugby to send them a million dollars or face liquidation of the organization.

Everyone—local, regional, national— will have to get very well-informed on liability insurance as we go forward.

It’s a new chapter, but which number will it be?