Published On: Tue, May 11th, 2021

NRA bankruptcy filing blocked by Texas judge, forcing group to face New York AG’s lawsuit

A federal judge in Dallas on Tuesday dismissed the National Rifle Association’s bid to declare bankruptcy and reorganize in Texas, finding the petition was aimed at gaining an “unfair litigation advantage” in a lawsuit brought against the organization by the New York attorney general’s office.

New York Attorney General Letitia James sued the NRA last year, seeking to dissolve the gun rights advocacy group and accusing top executives of “years of illegal self-dealings” that funded a “lavish lifestyle.” The NRA has called the suit an “unhinged and political attack.”

“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,” U.S. Bankruptcy Judge Harlin Hale wrote in a 38-page decision.

The group filed for bankruptcy in January at the direction of the NRA’s chief executive, Wayne LaPierre — and unbeknownst to some of the organization’s board of directors and top officials.

“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,” the judge wrote.

The ruling paves the way for the New York case to proceed.

“The @NRA does not get to dictate if and where it will answer for its actions, and our case will continue in New York court,” James tweeted. “We sued the @NRA to put an end to its fraud and abuse, and now we will continue our work to hold the organization accountable.”

In a statement, LaPierre said, “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.”

“We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries,” he added. “The NRA will keep fighting, as we’ve done for 150 years.”

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