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HomeExclusiveWhy Is The Nra Filing For Bankruptcy

Why Is The Nra Filing For Bankruptcy

Is The Nra Really Bankrupt

The NRA’s Lies About Its Bankruptcy Filing

Going by its statement, the NRA is not broke and the bankruptcy filing is simply a loophole the organization is utilizing to dissolve its assets and restart in Texas. Wayne LaPierre, the executive vice president of the National Rifle Association since 1991, posted a letter in which he explicitly explained why the NRA was filing for bankruptcy.

According to him, to “facilitate the strategic plan and restructuring, the NRA and one of its subsidiaries have filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. As you may know, chapter 11 proceedings are often utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs… No major changes are expected to the NRAs operations or workforce…. The plan aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realize many financial and strategic advantages. You know that our opponents will try to seize upon this news and distort the truth. Dont believe what you read from our enemies. The NRA is not ‘bankrupt’ or ‘going out of business’. The NRA is not insolvent. We are as financially strong as we have been in years…. Subject to court approval, the NRA is pursuing plans to reincorporate in the State of Texas.”

How Does The Pending New York Dissolution Case Affect The Nras Proposed Bankruptcy Reorganization

Incorporation in New York, where the group was founded 150 years ago, means that state regulates the nonprofit and thereby regulates the NRAs finances. During the legal proceedings to dissolve the NRA in New York, the NRA may not transfer its assets. While the NRA could set up a new corporation in Texas, the entitys assets would not be released without consent from New York authorities. The NRA would need the bankruptcy court to have the ability to control the NRAs assets to have a successful reorganization.

In short, given New Yorks laws governing nonprofits, the NRA cannot dissolve without the states blessing. And James responded to the NRAs announcement by expressing her firm opposition to reincorporation in Texas.

Will Nra Be Able To Avoid Investigations By Moving To Texas

In his letter, Wayne LaPierre put the blame for having to move on NY Attorney General Letitia James. “We are leaving the state of an attorney general who, just a few months ago, vowed to put us out of business through an abuse of legal and regulatory power. In fact, the gross overreach of the New York Attorney General and New York Governor has been resoundingly criticized by powerful national groups like the ACLU and a host of prominent legal scholars,” he said in his statement.

But leaving New York under James’ watch might not be so simple. Back in August 2020, the Attorney General’s office had posted a press statement in which Letitia James said: “While President Trump and others have suggested that the NRA should simply pick up and leave New York in an effort to evade responsibility, Id remind them that we shut down the presidents own foundation, recouped millions in diverted funds after unearthing the illegal use of charitable funds, and directed those funds to lawful organizations for legitimate charitable purposes. We intend to do the same with the NRA.”

She added: “To be clear, no charity registered in New York state, including the NRA, can dissolve and relocate to another state without approval of my office or of the Supreme Court of New York. As long as our lawsuit continues, the NRA must stay right where it is and answer for their deep-rooted fraud. The facts speak for themselves and our lawsuit will continue undeterred.

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Texas Judge Blocks Nra From Declaring Bankruptcy

May 12, 2021 / 7:19 AM / MoneyWatch

A federal judge in Texas ruled Tuesday that the National Rifle Association cannot file for bankruptcy, a decision that calls into question the gun-rights group’s plan to relocate its headquarters to escape oversight by New York regulators.

Judge Harlin Hale’s decision comes almost 10 months after New York Attorney General Letitia James filed a lawsuit against the NRA, accusing four of the organization’s top executives of mismanaging funds and violating state and federal laws.

#BREAKING: A judge has ruled in our favor and rejected the ‘s attempt to claim bankruptcy and reorganize in Texas.

The does not get to dictate if and where it will answer for its actions, and our case will continue in New York court.

No one is above the law.

NY AG James May 11, 2021

In January, the NRA filed for Chapter 11 bankruptcy protection from its debts, declaring its intent to reorganize and relocate to Texas. The NRA is based in Virginia but has long been chartered as a nonprofit organization in New York state.

“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 in a statement after the ruling.

“We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries,” he added.

Dismissal Of The Bankruptcy Case

NRA Files For Bankruptcy, Vows to Reincorporate in Texas

The NRA Court concluded that the bankruptcy filing wasnot driven by financial difficulties or potentialinsolvency.4 Rather, the Courtfound that the true purpose of the filing was to deprive the NYAGof the “remedy of dissolution” and protection fromjudicial dissolution was not a valid bankruptcy purpose. In supportof its holding, the Court reasoned that: dissolution of theorganization would be granted only if a New York court determinedthat it served the public interest and the Bankruptcy Codewas not intended to shield an organization from that type ofthreat.

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In August 2020 New York Attorney General Letitia James A Democrat Sued The Nra Based On Allegations That The Associations Top Executives Diverted Millions Of Dollars For Their Personal Trips

On Friday, the US National Rifle Association , the most powerful gun lobbyist in the country, filed for bankruptcy in an effort to avoid being investigated by New Yorks Attorney General.

The association, which will now reincorporate in Texas, voluntarily filed for bankruptcy under Chapter 11 of the bankruptcy code along with a subsidiary in the US Bankruptcy Court for the Northern District of Texas, Dallas Division. A bankruptcy filed under Chapter 11 is often referred to as reorganisation bankruptcy and allows businesses to stay alive and pay their creditors over time, as per a US government website.

Why Does The Nra Want To Reincorporate In Texas

In seeking reincorporation, the NRA would be changing its legal home and changing which states laws will govern it. Reincorporation would not require the NRA to relocate its main offices, which are in Fairfax, Virginia.

Texas is seen as a pro-gun and debtor-friendly state, and observers believe that it may offer the NRA more protection against claims from its creditors. That is, the NRA may hope that a federal bankruptcy court located in Texas will be more likely to rule in its favor regarding amounts owed to creditors than a New York or Virginia court.

However, the NRA faces significant challenges with both its bankruptcy case and the attempt to reincorporate. The Texas court may throw out the bankruptcy petition or move the bankruptcy case to another location with more substantial ties, such as a court in Virginia or New York.

Another hurdle for the NRA to clear is demonstrating whether the Chapter 11 reorganization it wants to undergo is necessary. If not, the bankruptcy judge could determine this move is a ploy to try to evade New Yorks power to potentially take control of the NRAs assets. The NRA maintains that it filed for bankruptcy in good faith.

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The Nra Wants To Dump Its Regulators Via Bankruptcy Will It Succeed

In a showdown with New York State, the National Rifle Association is trying an unusual strategy. Legal experts doubt it will work.

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By Danny Hakim and

Not long after the National Rifle Association last Friday, one of its board members wanted to set the record straight.

It has nothing to do with the N.R.A.s financial posture, which is very, very strong, said Bob Barr, a former Republican congressman from Georgia, in a TV interview. It simply is a legal vehicle to move under protection of federal laws, to escape the abuse by the New York authorities.

The organizations audacious bankruptcy filing, in which it is not actually claiming to be insolvent, seeks to use the bankruptcy process to circumvent regulators in New York, where the N.R.A. has been chartered for a century and a half. The states attorney general, Letitia James, sued the association in August, seeking to shutter it amid claims of mismanagement and corruption. The N.R.A. said in its legal filings that New York officials had long sought to weaponize the state governments regulatory powers against it and that the association now wanted to reincorporate in Texas.

Legal experts said the bankruptcy filing was likely to either be rejected or lead to a leadership purge, and was a sign that the organization and Mr. LaPierre were cornered by regulators.

Lapierre Wasn’t The Only One Bleeding The Nra Dry

NRA Goes Bankrupt But Don’t Get Too Excited Yet

As more attention was put on the NRA’s finances, it came to light that LaPierre wasn’t the only one in the organization using it like an ATM machine. That Washington Post piece reported that of the 76 members on the NRA’s board of directors, 18 had dipped their hands into the cookie jar over the preceding three years. The amounts ranged from $24,000 to $3.1 million, for everything from consulting by former NFL players to speeches by Republican advisers to rock concerts by self-professed gun fan Ted Nugent. Basically, the good, gun-toting people of America were shelling out their hard-earned dollars for this so-called “protector” of their constitutional rights, and those at the top of the supposed nonprofit were cashing in nicely.

Furthermore, as The Daily Beast reported, former NRA president Oliver North had written that the NRA had run up an astounding legal bill to the tune of $24 million. In those leaked documents, North said that he was “deeply concerned about the extraordinary legal fees the NRA has incurred” during all of its courtroom wrangling to make sure that there’s basically no regulation at all for the dangerous weapons plaguing the nation with violence.

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Nra Says Bankruptcy Shows Why Ny Attorney General Cannot Shut It Down

New York State Attorney General, Letitia James, speaks during a news conference, to announce a suit to dissolve the National Rifle Association, In New York, August 6, 2020. REUTERS/Brendan McDermid

  • Summary
  • NRA: Judge found no persistent fraud or illegal action
  • New York seeks dissolution of NRA for alleged corruption

NEW YORK – The National Rifle Association, which unsuccessfully filed for bankruptcy to escape New York’s bid to shut it down, said the dismissal of that case nonetheless established that the state’s attorney general cannot dissolve it for alleged corruption.

In a Tuesday court filing, the gun rights group also renewed its demand for an injunction against both a shutdown and the removal of longtime Chief Executive Wayne LaPierre by Letitia James, the state’s Democratic attorney general.

It said that despite dismissing its Chapter 11 case in May, U.S. Bankruptcy Judge Harlin Hale’s decision “comprehensively undermine James’s false narrative of an organization rife with corruption that it is unable to reform itself.”

James’ office had no immediate comment.

The NRA had filed for bankruptcy in January and said it would relocate to Texas after 150 years in New York, accusing James of suing for its dissolution the previous August because she disliked its politics.

James has accused the NRA of diverting millions of dollars to LaPierre and other executives, in part to support lavish lifestyles.

Bankruptcy Without Financial Problems

In the pantheon of bankruptcy cases, there are many instances in which organizations have filed for bankruptcy before they run into existential financial distress in a bid to avoid disaster.

For example, Purdue Pharma, which recently pleaded guilty to criminal charges for its role in distributing the addictive opioid OxyContin, was not facing a cash crunch when it filed for bankruptcy in 2019. But it was staring down a deluge of lawsuits that threatened to lead to its downfall.

Similarly, the Boy Scouts of America werent facing a serious operational cash shortage when it filed for bankruptcy protection in early 2020. But the group was also facing a firestorm of lawsuits over sexual assault allegations.

The idea that an enterprise comes into bankruptcy announcing that its going to pay all creditors in full goes against the very idea of why we have a federal bankruptcy system, Jacoby says.

The group has, however, sent signals that it plans to use the benefits of bankruptcy court to restructure elements of its operations.

The NRA said on its website that it would use bankruptcy to “streamline costs and expenses” and “proceed with pending litigation in a coordinated and structured manner” in pursuit of “many financial and strategic advantages.”

Among its plans is a potential shift of its physical headquarters from Virginia to Texas or elsewhere. The organization has hailed Texas’ friendliness to gun rights.

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Judge Dismisses Nra Bankruptcy Case In Blow To Gun Group

DALLAS A federal judge dismissed the National Rifle Associations bankruptcy case Tuesday, leaving the powerful gun-rights group to face a New York state lawsuit that accuses it of financial abuses and aims to put it out of business.

The judge was tasked with deciding whether the NRA should be allowed to incorporate in Texas instead of New York, where the state is suing in an effort to disband the group. Though headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and is incorporated in the state.

Judge Harlin Hale said in a written order that he was dismissing the case because he found the bankruptcy was not filed in good faith.

The Court believes the NRAs 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.

His decision followed 11 days of testimony and arguments. Lawyers for New York and the NRAs former advertising agency grilled the groups embattled top executive, Wayne LaPierre, who acknowledged putting the NRA into Chapter 11 bankruptcy without the knowledge or assent of most of its board and other top officers.

LaPierre pledged in a statement to continue to fight for gun rights.

What Is The Nra

Exclusive: Federal judge sees through NRA scheme ...

The NRA is a non-profit organisation that was formed by two civil war veterans Col. William C. Church and Gen. George Wingate in 1871 in order to promote and encourage rifle shooting on a scientific basis, the NRA website mentions. It is the largest and most influential pro-gun organisation in the US and is considered by critics as an enabler of gun violence in the country.

According to the associations magazine American Rifleman, the state is home to more than 400,000 NRA members and is also the site of NRAs 150th annual meeting. In a statement, NRAs Executive Vice President Wayne LaPierre said, The plan aims to streamline costs and expenses, proceed with pending litigation in a coordinated and structured manner, and realize many financial and strategic advantages.

We are leaving the state of an attorney general who, just a few months ago, vowed to put us out of business through an abuse of legal and regulatory power, he added.

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Gov Greg Abbott Had Welcomed The Gun Rights Organization With Open Arms Saying Texas Safeguards The 2nd Amendment

3:32 PM on May 11, 2021 CDT

with additional details.

The National Rifle Associations bid to declare bankruptcy so it could restructure, move to Texas and keep New York state authorities at arms length has failed.

A federal judge ruled Tuesday that the embattled gun rights group had acted in bad faith, using a maneuver intended to protect the fiscally insolvent in order to escape legal perils that bankruptcy law was never meant to address.

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, Judge Harlin Hale of the U.S. bankruptcy court in Dallas wrote in his 38-page ruling.

The Court finds there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme, Hale wrote.

Now, the group could be stuck fighting it out in New York.

The NRA cannot reorganize in Texas without the approval of the Office of the New York State Attorney General, New York Attorney General Letitia James said in a news conference Tuesday.

James sued the organization last August, pushing to dissolve it for misspending and self-dealing. The NRA had filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division.

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