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Judge dismisses NRA bankruptcy case, halting group’s move to Texas

Wayne LaPierre of the NRA speaking at CPAC FL in Orlando, Florida. (Gage Skidmore/Flickr)
May 12, 2021

The National Rifle Association’s bankruptcy case was dismissed by a federal judge on Tuesday, halting the group’s move to Texas and leaving it vulnerable to a New York lawsuit by New York Attorney General Letitia James in August alleging financial abuses in an effort to put the NRA out of business.

Judge Harlin Hale said the decision stemmed from his belief that the bankruptcy filing was not made in good faith, The Associated Press reported.

“The Court believes the NRA’s purpose in filing bankruptcy is less like a traditional bankruptcy case in which a debtor is faced with financial difficulties or a judgment that it cannot satisfy and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme,” Hale wrote.

“Excluding so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer, and the general counsel, is nothing less than shocking,” the judge added, citing NRA executive Wayne LaPierre’s acknowledgement that he put the NRA into Chapter 11 bankruptcy without notifying the majority of the group’s board.

LaPierre responded to the judge’s decision via Twitter Tuesday, saying he was “disappointed” but remains committed to “Second Amendment advocacy.”

“The NRA remains committed to its members and our plan for the future. Although we are disappointed in some aspects of the decision, there is no change in the overall direction of our Association, its programs, or its Second Amendment advocacy,” LaPierre said is a statement post to the NRA’s Twitter account. “Today is ultimately about our members — those who stand courageously with the NRA in defense of constitutional freedom. We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries.”

During the 11 days of testimony and arguments that led to Hale’s decision, lawyers for Attorney General James argued NRA leadership was attempting to avoid being held accountable for illegal activity, while the NRA’s attorneys called it an effort to escape a political attack.

James praised the judge’s decision on Twitter, writing, “No on is above the law.”

Texas Gov. Greg Abbott also tweeted following Hale’s ruling, expressing support for the NRA.

“Texas stands with the @NRA and we look forward to working with the Association on their plans to move to Texas,” he wrote.

Last August, James filed a lawsuit against the NRA in a state court in Manhattan following an 18-month investigation in an effort to dissolve the organization. She accused the group of illegal conduct due to mishandling millions of dollars of funds by diverting the money for luxurious trips, no-show contracts for associates and other suspicious expenses.

“The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets,” James said. “The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law.”

In February, the NRA filed a countersuit against James, accusing the top attorney of “weaponizing” her powers to destroy the group and “silence a political enemy.”

In the suit, the NRA alleges James doesn’t have the authority to invoke state laws governing nonprofits and is pursuing a “blatant and malicious retaliation campaign” because she doesn’t like the gun-rights group.