Judge Dismisses NRA Bankruptcy Claim

Print More

Photo by Bart via Flickr.

On Tuesday, a federal judge dismissed the National Rifle Association’s (NRA) Chapter 11 Bankruptcy case, leaving the far-reaching second amendment advocacy group to now face a New York state lawsuit, accusing the giant of financial abuses with the goal of putting the NRA out of business, according to the Associated Press and The Washington Post.

He arrived at his decision after just 11 days of testimony and arguments, further noting that he was dismissing the case because he found the bankruptcy was not filed in good faith and to “gain an unfair advantage in litigation or to avoid a regulatory scheme,” the Associated Press quotes.

At the heart of the current litigation, Judge Harlin Hale was tasked with deciding whether or not the NRA should be allowed to incorporate in Texas instead of New York — where it’s currently incorporated and facing a lawsuit. 

Other elements in the litigation include the fact that the NRA was seemingly filing for bankruptcy as a way to escape accountability for using the group’s funds as a “personal piggybank” for executives, according to Lawyers for New York Attorney General Letitia James.

Ultimately, Judge Hale dismissed the NRA’s case without prejudice, meaning the group can refile — yet Hale warned that if they refiled, NRA leaders would risk losing control, according to the Associated Press.

Hale also noted the NRA could still pursue other legal steps to incorporate in Texas, but Attorney General James said such a move would require her approval — and that seems unlikely.

In a tweet seemingly responding to her comments, Republican Gov. Greg Abbott said: “Texas stands with the @NRA and we look forward to working with the Association on their plans to move to Texas.”

Nonetheless, Judge Hale wrote a 37-page decision, writing, “The Court finds, based on the totality of the circumstances, that the NRA’s bankruptcy petition was not filed in good faith but instead was filed as an effort to gain an unfair litigation advantage in the NYAG Enforcement Action and as an effort to avoid a regulatory scheme.”

During the case hearings, lawyers from New York and the NRA’s former advertising agency grilled Wayne LaPierre, a top NRA executive, and the organization’s CEO, as he took the stand.

Wayne LaPierre, photo by Gage Skidmore via Flickr.

LaPierre acknowledged while under oath that the NRA was put into Chapter 11 bankruptcy “without the knowledge or assent of most of its board and other top officials,” the Associated Press details. 

Following Tuesday’s ruling, LaPierre took to social media and pledged to continue to fight for American gun rights. 

“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 via the NRA’s Twitter account. “Today is ultimately about our members — those who stand courageously with the NRA in defense of constitutional freedom.” 

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

Shannon Watts, who founded Moms Demand Action for Gun Sense in America, publically reacted to the news of the bankruptcy case dismissal, saying  in a series of tweets that this “comes at the worst possible time for the NRA: right as background checks are being debated in the Senate.”

“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 Everytown for Gun Safety, the Associated Press details. 

Watts concluded in a tweet, saying, “This ruling is just the beginning of the NRA’s troubles.”

As the NRA grapples with this Tuesday ruling, a Senate Committee on Tuesday convened to discuss how to deal with ghost guns — firearms that can be partially assembled through various kits purchased online, or made with parts created by a 3D printer, Courthouse News details.  

Ghost guns have become popular among gun traffickers and criminal offenders, according to several panel witnesses speaking to the Senate Committee, with many saying arrests are on the rise — with many ghost guns being seized from people under 21-years-old, noting that the guns were originally purchased at gun shows.

Ultimately, many of the experts agreed that if ghost guns had serial numbers, they would be easily tracked through a national gun registry, helping to eliminate ghost guns and ultimately save lives from firearm deaths, Courthouse News concluded. 

Leave a Reply

Your email address will not be published. Required fields are marked *