Michigan State University will pay $500 million to settle lawsuits brought by 332 victims of Larry Nassar, the former associate professor and doctor who sexually abused hundreds of young girls and women.
The terms of the settlement include $425 million paid to current claimants, and $75 million set aside in a trust fund to protect "any future claimants alleging sexual abuse by Larry Nassar," according to a joint statement from plaintiffs' attorney John Manly and Michigan State University.
The settlement only deals with accusations against Michigan State. It does not address lawsuits against USA Gymnastics, the US Olympic Committee, gymnastics coaches Bela and Martha Karolyi or other parties.
The settlement in principle was agreed to by Michigan State's board of trustees in a conference call Tuesday night, the statement said.
"This historic settlement came about through the bravery of more than 300 women and girls who had the courage to stand up and refuse to be silenced," Manly said in a statement.
"It is the sincere hope of all of the survivors that the legacy of this settlement will be far-reaching institutional reform that will end the threat of sexual assault in sports, schools and throughout our society," he added.
MSU is expected to pay the $500 million out of pocket and then will likely sue its insurance company to get the money back, according to a source with knowledge of the settlement.
MSU's interim President John Engler sent a letter to the MSU community Thursday saying that the university's insurance carriers participated in the mediation and "we expect all of them to fulfill their contractual obligations."
Engler called the settlement an important step in the healing process for survivors, their families and the university.
"The damage done over a period of years by one evil doctor harmed hundreds of girls and young women, including 31 who were MSU students. The assaults by Larry Nassar shocked our campus and the nation," Engler said in his letter.
"Our university has apologized, expressed regret, and pledged to act so that such abuse could never happen again."
Kaylee Lorincz, who spoke about Nassar's abuse in court, had a mixed reaction to the settlement Wednesday.
"The settlement is a win for us and (I) appreciate that it is a step in the right direction, but I'm disappointed in the lack of compassion from MSU and that their tone toward the survivors has not changed," she said.
USA Gymnastics said it was "very encouraged" by the settlement, as it continues its mediation efforts to reach a resolution in the lawsuits it faces.
"USA Gymnastics remains dedicated to creating a culture of empowerment for the young men and women who are pursuing their gymnastics dreams today while honoring those who have gone before them," the organization said in a statement. "We are focused on doing everything we can to prevent this from happening again by making bold decisions and holding ourselves to the highest standards."
Michigan State's role
Nassar admitted in court to using his position as a trusted medical doctor to sexually abuse young girls and women who came to him for medical care for about two decades. He was sentenced to more than 100 years in prison.
During a remarkable series of court hearings, dozens of women came forward to speak against Nassar as well as the institutions that they said protected him, including Michigan State. Nassar was employed as a sports physician at the university from 1997 to 2016.
In 2014, for example, Amanda Thomashow reported Nassar's abuse to Michigan State officials. The school ultimately sided with Nassar, concluding that his "pelvic floor" treatments were medically appropriate. Yet even as school officials allowed him to return to treating patients, the school's Title IX coordinator called his methods a "liability" that exposed patients to unnecessary trauma.
The university has maintained that no official believed Nassar committed sexual abuse until newspaper reports were published in summer 2016. Any suggestion that the university engaged in a coverup is "simply false," a school statement said.
Amid intense backlash, Michigan State President Lou Anna Simon resigned in January. Engler, the former Michigan governor, was named the interim president by the board of trustees.
Michigan Attorney General Bill Schuette appointed a special prosecutor to investigate the university and find out who knew what, when and what they did about it.
The investigation led to the arrest of William Strampel, Nassar's boss at the university's College of Osteopathic Medicine, on charges of felony misconduct in office and misdemeanor criminal sexual conduct. Strampel has pleaded not guilty to the charges.
The special prosecutor, Bill Forsyth, issued a statement reacting to the settlement, saying the investigation is not done.
"It is very important to see resolution on the civil side, and I hope this provides some sense of relief and closure for the survivors," Forsyth said. "That being said, my investigation is still open and ongoing."
Abuse survivors react
The settlement drew mixed reviews from those abused by Nassar. Rachael Denhollander, the first person to accuse Nassar of abuse publicly, said she was "very grateful" that a settlement was reached but that more work needed to be done.
"The litigation phase is over, but the fight for change and accountability, the fight to give survivors a voice and protect the next generation, has only just begun," she said.
Thomashow also said there was more work left to be done.
"This was never about money. It was always about shifting culture from enabling abuse to empowering survivors," she said. "This fight is far from over. It has only just begun."
Lindsey Lemke said the money from the settlement would go toward counseling and therapy.
"This has been a very long and exhausting road, especially for those who have been so vocal from the very beginning of this case," she said. "This settlement from Michigan State is a huge victory for the survivors as it (is) the real first sign of accountability that we've seen."