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Michigan State University and Larry Nassar Victims Reach $500 Million Settlement

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By Teresa Lo

Posted on May 17, 2018

Summary: MSU has agreed to pay $500 million to the victims of Dr. Larry Nassar.

Michigan State University will pay $500 million to the hundreds of victims of their ex-employee, Dr. Larry Nassar. According to the Lansing State Journal, the settlement brings “to a close another aspect of the scandal now in its 20th month.”

Nassar worked at MSU as a faculty member, and he was also the official staff doctor of the USA Gymnastics team, which competed in the Olympics. For decades, he treated young female athletes, and numerous women said that during exams, he would molest them, touching their private parts with his ungloved fingers.

This year, Nassar, 54, was sentenced to prison for sexually assaulting the gymnasts, and he was convicted the year before for owning child pornography.

Some of his victims said that they had reported Nassar’s sexual abuse to officials at MSU but nothing was done to stop him. The Nassar scandal resulted in the resignation of MSU president Lou Anna Simon earlier this year, as well as resignations of top members of USA Gymnastics. Lawmakers have also passed legislation that requires school officials to report sexual abuse allegations to the police.

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The $500 million settlement between MSU and the victims was announced by the plaintiffs’ attorneys, and it was agreed upon on Tuesday. $75 million of that money will be held for future lawsuits against MSU because of the Nassar coverup.

Several of the victims said that they will push for more institution reforms, which MSU did not agree to in the settlement.

“I am thankful that the historic settlement amount at least in part reflects the horrific nature of what took place at MSU,” former gymnast Rachel Denhollander said. “However, I am deeply disappointed at the missed opportunity for meaningful reform and change at the University. My sisters and I have said from the beginning that coming forward was to push for accountability and needed reform, and there is much work left to be done.”

Denhollander is credited as the first victim to publicly accuse Nassar, which inspired other women to come forward. She spoke with the Indianapolis Star in 2016 about Nassar’s abuse, and that story sparked national outrage which led to Nassar’s takedown.

But the Indianapolis Star was not the first organization to hear about Nassar’s abuse. In 2014, Amanda Thomashow prompted a Title IX investigation against MSU after she reported Nassar’s abuse, but the probe ended after the school gaslit her, telling her that she did not understand a standard medical procedure from sexual assault.

“I think that this is a step in the right direction,” Thomashow said about the $500 million settlement. “But I think there’s a lot more work to be done at MSU and institutions across the country.”

The Nassar scandal has cost MSU an additional $11.3 million in legal fees, according to Lansing State Journal. The school has had to fight civil litigation and state and federal probes into how the school handled his misconduct, and about $2.5 million was spent on handling insurance claims.

Insurance expert Lars Powell said on Wednesday that MSU likely has multiple insurance policies and it is possible that the school has $500 million in coverage to cover the settlement amount. However, Powell said that some medical malpractice and professional liability policies do not cover sexual misconduct.

“I would guess that whatever settlement they reached would be the amount of insurance they carry,” said Powell. “They wouldn’t just agree to the settlement, nor would the plaintiffs agree to that settlement, if the insurers weren’t on board.”