Texas judge dismisses NRA Chapter 11 bankruptcy petition

Ruben Hill
May 12, 2021

The decision from Judge Harlin Hale, of the Northern District of Texas, came after a month-long trial in which NRA attorneys and officials argued that their bankruptcy case should move forward in Texas. James is seeking to have the organization shutter its doors, bringing a close to its almost 150-year old existence.

Advocates for gun violence prevention rejoiced Tuesday when a federal judge dismissed the National Rifle Association's bankruptcy case, ruling that the powerful gun lobby declared bankruptcy in an attempt to avoid facing a NY state lawsuit that accuses the organization of fraud and seeks to disband it.

Judge Harlin Hale announced his decision Tuesday in the case over whether the powerful gun-rights group should be allowed to incorporate in Texas instead of NY.

On August 6, 2020, Breitbart News reported that New York Attorney General Letitia James filed a suit in which she sought to dissolve the NRA.

"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", Hale wrote, according to Reuters.

This is a breaking story.

James and the NRA's former advertising agency Ackerman McQueen have said the bankruptcy was filed in bad faith and to escape New York's oversight, with a lawyer for James during closing arguments of the trial calling the bankruptcy a "circus sideshow". A spokesman for the NRA has not responded to CNN's request for comment on if the organization plans to file for bankruptcy elsewhere.

The virtual trial in a North Texas bankruptcy court included testimony from top current and former NRA officials, including Chief Executive Officer Wayne LaPierre, who testified on April 7 that he had kept news of the impending bankruptcy filing from the NRA's own general counsel, chief financial officer and other salaried NRA officials.

Five months later, the NRA's top executive, Wayne LaPierre, announced that the right-wing nonprofit would file for bankruptcy and move its headquarters from NY, where it was chartered in 1871, to Texas.

Phillip Journey, an NRA board member and Kansas judge who had sought to have an examiner appointed to investigate the group's leadership, was concise about Hale's judgment: "1 word, disappointed", he wrote in a text message.

Hale dismissed the NRA's case without prejudice, meaning the group can refile it.

"We remain an independent organization that can chart its own course, even as we remain in NY to confront our adversaries", he said. But the judge said problems in how the group is managed could lead to the appointment of a trustee to oversee its affairs.

James is New York's chief law enforcement officer and has regulatory power over nonprofit organizations incorporated in the state.

"It will be onerous if not impossible for the NRA to effectively oppose gun safety and lobby lawmakers while simultaneously fighting court battles and mounting debt", said Watts, whose organization is part of the Michael Bloomberg-backed Everytown for Gun Safety. The NRA's bankruptcy filing listed between $100 million and $500 million in assets and the same range in liabilities.

Brian Mittendorf, a professor of accounting at Ohio State University who has followed the NRA's finances for several years, said the ruling has implications for the various lawsuits the NRA is facing, as well as its financial future.

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