USA Rugby has presented proposals for a new governance model after filing for bankruptcy in March ©Getty Images

USA Rugby has presented proposals for a new governance model after filing for bankruptcy in March.

Following detailed consultation with legal advisors, the USA Rugby Board of Directors and Congress decided to file for bankruptcy as a result of financial constraints. 

The governing body was already facing financial challenges, but the suspension of sport caused by the ongoing coronavirus pandemic accelerated those issues.

It resulted in a significant loss of revenue from spring and summer membership dues and sponsorship drawbacks. 

Last month, a motion to manage bankruptcy using a streamlined process was passed, with USA Rugby now able to prioritise governance reorganisation as well as finance and operations during an expedited 90-day window.

A governance reorganisation group has been formed, consisting of representatives from the Board, Congress, international athletes and court-appointed agents, ensuring a sustainable business structure through the process. 

In collaboration with community stakeholders, proposals for a new governance model that would form national councils across the youth, collegiate, senior club and international athlete level have been officially presented.

If a new governance structure for USA Rugby was approved, national councils across the youth, collegiate, senior club and international athlete levels would be formed ©Getty Images
If a new governance structure for USA Rugby was approved, national councils across the youth, collegiate, senior club and international athlete levels would be formed ©Getty Images

This would effectively devolve the existing Congress structure, with each national council nominating its dedicated representatives to the new USA Rugby Board of Directors instead. 

Each level of the game may also establish individual entities to administer rugby in their respective groups.

If Congress votes to ratify the new governance structure into the bylaws, each community would then collaborate with the USA Rugby national office to work together on their own agreement.

USA Rugby has also extended its suspension of all sanctioned rugby activities until the end of May.

Updates on a mapped-out return to play and the fate of the USA Rugby Club Sevens National Championship will be provided by June 1.

USA Rugby, which is receiving €1 million (£878,000/$1.1 million) in financial support from World Rugby, is not the only rugby governing body to struggle financially during the pandemic. 

Rugby Australia announced a preliminary AUD9.4 million (£4.6 million/$5.7 million/€5.2 million) loss for 2019 in March, with its situation worsened by the pandemic and suspension of Super Rugby, while New Zealand Rugby revealed that the body is forecasting a revenue decline of up to 70 per cent this year.