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USA Rugby Gets A Lifeline: Chapter 11 Vote To Come

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USA Rugby Gets A Lifeline: Chapter 11 Vote To Come

A line drawing from a Goff Rugby Report video on the situation.

According to several sources close to the issue, USA Rugby may have been thrown a fragile lifeline by World Rugby.

Based on what we have heard and seen on Friday, here’s the situation:

World Rugby is rightly concerned that a complete dissolution of USA Rugby would mean that any previous loans would not be repaid. World Rugby is also concerned—understandably—that a big old check to USA Rugby solves nothing and teaches no one any lessons.

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So … World Rugby has reportedly committed to a funding plan for USA Rugby to keep the National Governing Body afloat over the course of a few months.

This funding doesn’t avoid bankruptcy; it just makes Chapter 11 bankruptcy (court-approved reorganization and time to arrange debt payment) a possibility.

Without any funding and without even the semblance of a plan going forward, USA Rugby would have had to file Chapter 7, which would mean the organization would essentially cease to exist.

The Reorganization Task Force have apparently voted to recommend Chapter 11. This still has to get through the Board and the Congress.

World Rugby is looking for a plan for the future in order to keep funds coming, while the various stakeholders (Youth & HS, Club, College, and possibly National Teams) have a little more time to come up with a new way of doing business, such as establishing their own 501c3 corporations to oversee their own piece of the game with only minimal USA Rugby involvement.

It seems clear that Youth & HS have been working on this anyway, ditto College.

Not Out Of The Woods

No one is out of the woods yet. A Bankruptcy Court judge could said the funding and plan aren’t good enough. The Board could vote down a move to Chapter 11.

A reorganization under Chapter 11 would likely mean some cost-cutting, but you can be sure that those currently employed by USA Rugby will be fighting to keep their jobs. Unfortunately, what often happens in situations like this is that those who had no hand in causing the problems are more likely to be let go than the guilty.

But there have been repeated calls for drastic changes (no CEO, heavily pared-down national office, no events staff) among the general USA Rugby membership as well as those working on the reorganization.

(Editor's addendum—we are attempting to confirm this but early reports are that there have been several people let go at the national office.)

Whether that happens or not, we will likely see something like the video below actually happen.

Everyone votes on the way forward on Sunday.