USA Rugby looks like it will climb its way through the Bankruptcy process in the next month or so, but questions remain as to what, if anything, the organizations creditors will get.

As reported on GRR earlier this month, USA Rugby did settle with what was listed as its largest creditor, United World Sports.

USA Rugby, United World Sports Reach Settlement In Lawsuit

That line item was a little misleading because UWS had sued USA Rugby for $40 million. Thus, $40 million was listed as a debt, but it was only a theoretical debt—there'd been no ruling on the lawsuit and therefore it could have been that USA Rugby owed $40 million, or $5. As it turned out, the two settled for $200,000, which was ultimately a massive positive for USA Rugby.

JP Morgan Chase Bank is the only secured creditor, and it owed $467,820. That debt is expected to be paid through the process.

Other debtors, however, will likely be paid only a percentage of what they are owed, which is essentially how bankruptcy works. The biggest player in the unsecured debt list is, of course, World Rugby, which is owed $3.6 million. However, that debt is mostly due to losses from the Rugby World Cup 7s, an event in which USA Rugby got a really unfavorable deal (more on that in another posting). So, really, the money World Rugby extended to USA Rugby as a loan can be seen as a grant to shore up losses for which World Rugby was partially responsible.

Whatever the justification, World Rugby will be getting a small percentage of that money back, but nowhere near all of it.

If USA Rugby can finalize all of that, and maybe get a little income in as some regions have membership registration open, then the organization might be in a position to return to normal operations once things return close to normal amid the COVID-19 outbreak.

When that happens, there are some structural changes that have already happened that will have a huge influence over how USA Rugby handles major errors in the future.

Organizations will have their own bank accounts. That's a crucial thing. USA Rugby was acting as the banker for various aspects of the game, which is why, when there was a money crunch in one area, and the money that was supposed to go to, for example, D1A, was diverted elsewhere. This was also how an age-grade team might find its budget cut at the end of the year because a different national team overspent earlier.

Now things are a little different. The various national teams will have their own bank accounts. So the money they have in their possession can't then be funneled elsewhere to fill a gap. Every team's budget is its budget and there will be more pressure to stay within that budget. The National Office budget and accounts will also be separate from those of the various national teams. The same goes for organizations such as CRAA (who had already taken tighter control of their finances after they kept seeing their D1A money disappear). That will compartmentalize USA Rugby to an extent that hasn't been the case for some time (back 20 years ago the Men's National Team ran its own affairs, and that didn't sit well with many in USA Rugby; now you see why they did it).