NRA bankruptcy filing blocked by Texas judge, forcing group to face New York AG lawsuit
A Dallas federal judge on Tuesday rejected the National Rifle Association’s offer to seek bankruptcy protection and reorganize in Texas, ruling the petition was filed to gain an “unfair litigation advantage” in as part of a lawsuit brought by the New York attorney general’s office.
Last year, New York Attorney General Letitia James sued the NRA to disband the gun rights group and accuse senior leaders of “years of self-harm. illegal “which financed a” lavish lifestyle “. The NRA called the prosecution a “political and wanton attack.”
“The question facing the Court is whether the existential threat facing the NRA is the type of threat the Bankruptcy Code is meant to protect against. The Court believes it is not,” he said. writes US bankruptcy judge Harlin Hale in a 38-page article. decision.
The NRA filed for Chapter 11 bankruptcy protection in January under the leadership of its CEO Wayne LaPierre – unbeknownst to some members of the organization’s board and other senior officials .
“What concerns the Court most is the surreptitious manner in which Mr. LaPierre obtained and exercised the power to file for bankruptcy for the NRA. Excluding so many people from the decision-making process to file for bankruptcy, including the vast majority of the board, the chief financial officer and general counsel, is nothing short of shocking, “wrote Hale, of the North Texas District.
The ruling paves the way for the New York case to continue.
“The @NRA cannot dictate whether and where it will answer for its actions, and our case will go to court in New York,” James tweeted. “We have sued @NRA to end its fraud and abuse, and now we will continue our work to hold the organization accountable.”
In a statement, LaPierre said: “While we are disappointed with some aspects of the decision, there is no change in the general direction of our association, its programs or its advocacy for the Second Amendment.
“We remain an independent organization that can chart its own course, even if we stay in New York to face our opponents,” he added. “The NRA will continue to fight, as we have been doing for 150 years.”
Senator Bob Menendez, DN.J., mocked the group on Twitter after the ruling, using the chorus LaPierre used after numerous mass shootings. “Oh no, thoughts and prayers …” he tweeted.
Testifying in a weeklong trial in Dallas that ended last week, LaPierre admitted that he failed to complete the required conflict of interest disclosure forms, including disclosing trips on board. of a yacht owned by a Hollywood producer whose company had done business with the association.
LaPierre described one of the trips as “a safety retreat” because he feared for his safety in the months after a gunman killed 20 children and six educators at Sandy Hook Elementary School in Newtown, Connecticut, in 2012.
“I remember going there saying ‘Thank God I’m safe, no one can bring me here.’ And that’s how it happened, that’s why I used it, “LaPierre said in testimony.
James’ lawsuit alleges LaPierre and other executives used the company as a “personal piggy bank” and that millions of dollars from NRA reserves were used for trips for them and their families and to pay for private jets and expensive meals. LaPierre is also accused of spending over $ 500,000 on eight trips to the Bahamas in three years, obtaining luxury black car services, paying for his wife’s hair and makeup and having secured a $ 17 million NRA post-employment contract.
LaPierre and other officials said the NRA has restructured itself and is trying to correct past problems and that the group, which is chartered from New York and headquartered in Virginia, is planning to move to Texas.
In her ruling, Hale noted that “there was a general consensus among witnesses that, as the NRA has consistently represented to the Court and its members, the NRA is in its strongest financial position in years. and intends to pay all authorized claims to creditors. in full. “
The strong financial outlook did not help the NRA case. “The NRA is a creditworthy and growing organization that uses this bankruptcy as a tool to win its dissolution lawsuit, and it is not an appropriate use of bankruptcy,” the judge wrote.