USA Rugby has filed for bankruptcy amid the growing financial strain faced by unions around the world due to the COVID-19 pandemic.
The American union had been battling financial issues but the impact of the coronavirus pandemic has exacerbated those issues.
All of USA Rugby's competitions have been suspended indefinitely due to the pandemic, compounding an already perilous financial situation created by overspending in lead up to the 2019 Rugby World Cup.
In December of 2019, USA Rugby flagged its already poor financial situation, citing an expensive legal battle with PRO Rugby and overspending on the men's XVs program in the lead-up to last year's global tournament.
USA Rugby's board officially voted to file for bankruptcy this week and is set to begin the process in the coming days.
As part of the filing, USA Rugby will receive a financial support package from World Rugby, which will ensure the board and a restructuring group can continue to operate and also ensure that the men's and women's Sevens programs can continue to be maintained.
Already the body has flagged significant staff cuts as part of the bankruptcy process, set to operate on a reduced staffing model going forward.
USA Rugby chair Barbara O'Brien said the move would be the right one for the organisation in the long-term.
“This is the most challenging period this organization has faced and all resolves were never taken lightly in coming to this determination,” she said.
“While the current climate is of course much larger than rugby, we remain focused with stakeholders and supporters in the continued effort toward a balanced rugby community where the game can truly grow.”