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Federal Judge Dismisses National Rifle Association’s Bankruptcy Case

— May 12, 2021

The judge found that the NRA had filed for bankruptcy in Texas to gain an unfair litigatory advantage.

A federal judge in Dallas has dismissed the National Rifle Association’s bankruptcy filing, finding that the firearms advocacy organization had filed it to gain an “unfair litigation advantage” in a lawsuit brought by New York Attorney General Letitia James.

NBC News recounts how James sued the NRA last year, seeking to dissolve the group.

In her lawsuit against the National Rifle Association, James accused the group’s top executives of “years of illegal self-dealings,” which funded a “lavish lifestyle.”

In response, the NRA called the filing an “unhinged and political attack”—despite evidence showing that its leaders spent hundreds of thousands of dollars of donor money on lavish getaways, luxury clothes, and chartered jets.

The National Rifle Association then filed bankruptcy, asking a Dallas court to allow it to shift its headquarters from New York to Texas.

However, U.S. Bankruptcy Judge Harlin Hale found that the NRA’s claim for bankruptcy—the so-called political threat it was facing from New York—was not grounds to proceed.

A gavel. Image via Wikimedia Commons via Flickr/user: Brian Turner. (CCA-BY-2.0).

“The question the Court is faced with is whether the existential threat facing the NRA is the type of threat that the Bankruptcy Code is meant to protect against. The Court believes it is not,” Hale wrote in a 38-page decision.

As has reported before, the NRA’s bankruptcy claim came as an unexpected surprise to most of its members—and many of its top leaders, too.

Wayne LaPierre, the organization’s CEO, purportedly did not form most of the NRA’s executives that he was planning to file for Chapter 11 bankruptcy.

“What concerns the Court most though is the surreptitious manner in which Mr. LaPierre obtained and exercised authority to file bankruptcy for the NRA. 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,” Judge Hale wrote.

Speaking in a statement, New York Attorney General Letitia James said that Hale’s ruling reaffirms that the NRA does not get to pick when—or where—it will face justice.

“Today’s order reaffirms that the NRA does not get to dictate if and where it will answer for its actions,” James said. “The rot runs deep, which is why we will now refocus on and continue our case in New York court. No one is above the law, not even one of the most powerful lobbying organizations in the country.”


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