Home Forums Hunting & Shooting Hunter's Campfire NRA lost their bankruptcy case in New York

The NRA lost its case hoping to re-incorporate in Texas. What next is anyone guess.

Now they’ll have to face the New York state lawsuit accusing them of financial abuses, and if they lose that it’ll likely put em’ out of business.

Got a link to the story, Doc?

The bankruptcy case was in Texas. The judge dismissed the case as having been filed in bad faith, which it was. The filing had nothing to do with bankruptcy issues, rather, it was an attempt to stall the inevitable. This failed attempt cost the NRA $72 million dollars in legal fees - money from donations,

What's next is as certain as the sun rising in the east. It will go back to New York where it will be dissolved and liquidated in due time. A once great organization was raped and pillaged to death by criminals.

This^^^^^^^^^^^^

Yep. Criminals from within.

Is there no recourse for NRA against WLP and his buddies?

Add to list
A federal judge Tuesday denied an effort by the National Rifle Association to file for bankruptcy protection, ruling that the gun rights group filed the case in an attempt to fend off a lawsuit by the New York attorney general.

“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,” Judge Harlin Hale wrote in a 37-page decision.

The decision was a victory for New York Attorney General Letitia James, who filed a far-reaching civil suit against the group last August accusing top officials of fraud and self-dealing. NRA chief Wayne LaPierre and his legal team had contended that the lawsuit was a political act intended to destroy the organization.


NRA officials did not immediately respond to requests for comment.

Adam Levitin, who teaches bankruptcy law at Georgetown University Law Center, said the ruling was not surprising, calling the NRA’s petition “a poster child for a bad-faith filing.”

He said he did not think the organization had good arguments for appeal, noting that LaPierre’s position as head of the organization could be at risk in such a move.

Hale’s decision follows a weeks-long hearing that revealed details about alleged mismanagement and excessive spending by top officials at the influential gun lobby, including LaPierre, the NRA’s controversial leader for the past three decades.


Early this year, LaPierre announced that the nonprofit would file for bankruptcy and seek to move to Texas from New York state, where it was chartered in 1871, in the face of the suit filed by the New York attorney general.

In his decision Tuesday, Hale cited “lingering issues of secrecy and a lack of transparency” in the management of the nonprofit.” But he said he was most troubled by “the surreptitious manner in which Mr. LaPierre obtained and exercised authority to file bankruptcy for the NRA,” noting that the NRA chief had not informed the majority of the board of directors, the chief financial officer or the general counsel.

However, the judge declined to appoint a trustee or independent examiner to oversee the group’s finances, saying that testimony during the hearing suggested the organization had improved its internal controls and “that the NRA now understands the importance of compliance.”



James’s office had argued that the NRA’s bid for bankruptcy was an attempt to duck serious allegations of wrongdoing. Several other parties, including the NRA’s longtime public relations firm, joined the attorney general’s office in opposing the petition or seeking independent oversight of the group.

In a surprise move at the end of closing arguments, a Justice Department lawyer who protects taxpayers’ interests in bankruptcy proceedings called for the rejection of the NRA’s petition or appointment of an independent trustee or an examiner.

Lisa Lambert, a lawyer with the U.S. trustee’s office, told the court that the evidence presented in the hearing showed that the nonprofit group lacked proper management and inappropriately paid for LaPierre’s personal expenses, including private jet travel and expensive suits from an exclusive Beverly Hills boutique.

U.S. trustee opposes NRA bankruptcy petition in blow to gun rights group

After Hale’s ruling, opponents of the NRA said that the group’s attempt to seek bankruptcy protection only made it more vulnerable to legal scrutiny.


“Today’s disastrous decision for the NRA shows that they can’t even file for bankruptcy correctly, which doesn’t bode well for the many lawsuits and investigations they must now face,” John Feinblatt, president of Everytown for Gun Safety, a nonprofit group that advocates for gun control, said in a statement. “The NRA was forced to hang its dirty laundry out for the world to see, and has nothing to show for it but another stack of legal bills.”

Shannon Watts, founder of Moms Demand Action, said in a statement that “the testimony, evidence, and resolution of the trial have further damaged what little is left of the NRA’s reputation, painting the clearest picture yet of a non-profit organization that prioritized extravagant perks and insider payments to its executives at the expense of its rank-and-file members.”

Hale had several options in the case. He could have rejected the NRA bankruptcy petition, denying the group protection from the New York lawsuit. He could have allowed the bankruptcy to proceed while putting the group under the control of a court-supervised trustee and removing LaPierre from management. Or he could have appointed an examiner to review claims of NRA fiscal mismanagement.


Bankruptcy experts said that the evidence presented during the hearing made it difficult for the judge to allow the bankruptcy to proceed.

“The bankruptcy filing was a not too covert attempt to shield the NRA from the NY AG litigation and the Bankruptcy Court made it clear that it would not protect the NRA from New York’s regulatory power utilizing the Bankruptcy Code as a shield,” Eric Snyder, chair of the restructuring department of the Wilk Auslander law firm, said in an email.

The judge himself noted the unusual nature of the case last week, asking participants during the trial’s final arguments whether they thought the bankruptcy code permits a financially strong organization to file for bankruptcy to protect itself from actions taken in the public interest by another court.

Lawyers for the NRA acknowledged what one described as “cringeworthy” activities by NRA officials in the past but argued that management improvements had been instituted effectively.


However, a group of dissident members of the NRA board intervened in the case, saying most of the board and top organization officials were not informed in advance of LaPierre’s plan to file for bankruptcy and move to Texas. Some of them sought the appointment of an independent examiner to review the group’s financial management.

One of them, Phillip Journey, who is also a Kansas state judge, said that while he opposed the way in which the NRA filed for bankruptcy, he did not want the petition to be dismissed, saying the group “would probably die the death of a thousand cuts” if it had to face the New York and other lawsuits.

During the last day of the trial, the NRA submitted a formal plan of reorganization that had been approved only the day before at a special board meeting. The new plan called for adding a top compliance officer to the organization but otherwise kept the current management — including LaPierre — in place.

LaPierre testified twice during the trial, which was conducted via Webex video conference. He acknowledged that he should have disclosed some of the lavish benefits he received and that he clashed with many former executives and associates, including the leaders of Ackerman McQueen, the NRA’s longtime public relations firm, which claims the NRA owes it more than $1 million. But he said past financial and management abuses had been corrected.

NRA chief Wayne LaPierre acknowledges he did not disclose bankruptcy plans or luxury yacht trips to other top officials

The hearing put a spotlight on the practices inside the NRA at a key political juncture in the fight over gun control.

Congress is considering new legislation following a rash of mass shootings in April. In addition, the Supreme Court has agreed to hear an NRA-backed lawsuit challenging the constitutionality of state restrictions on carrying concealed weapons.

In the past decade, the NRA reacted with defiance to gun-control proposals that emerged after mass shootings, including in 2012 when LaPierre gave a speech calling for armed guards at schools in the aftermath of the attack at Sandy Hook Elementary School in Newtown, Conn., in which 26 were killed. The NRA effectively blocked what at first appeared to be a rare bipartisan demand for congressional regulatory action after the school massacre.


https://www.washingtonpost.com/politics/nra-bankruptcy-decision/2021/05/11/9f67509a-b106-11eb-9059-d8176b9e3798_story.html?utm_campaign=wp_evening_edition&utm_medium=email&utm_source=newsletter&wpisrc=nl_evening&carta-url=https%3A%2F%2Fs2.washingtonpost.com%2Fcar-ln-tr%2F324bd18%2F609af0759d2fdae3024bed8c%2F5f2dc12fae7e8a549a553462%2F9%2F53%2F609af0759d2fdae3024bed8c

The NRA has become the Enron of 2A rights.

They’re just a virtual organization with no meat and no meaningful visible product.

Sad.

I read LaPierre's book a number of years ago. Seemed to have his head screwed on straight and was a good fighter against gun control. Somewhere along the he lost his way and began to believe he was entitled to the life of a rock star. Obviously delusional and now will be remembered as a swindler.

The NRA needs to fire him and sue him for misappropriated funds.

He effectively neutered the NRA which was no help to Trump this past election.

should have reincorporated out of NY years ago..

but to be fair...

the lawsuit was filed by the NY AG in bad-faith.

Wayne should have stepped down years ago, the NRA board owns this. But in truth they weren't doing their jobs for years, bump stocks, Assault rifles , gimme a break.

The NRA of my youth, full of honorable sportsmen, marksmen, and collectors, died many years ago. It was "reborn" as the paranoia-peddling marketing wing of the firearms industry, populated with ignorant, racist, conspiracy nuts. It will not be missed.

NRA telemarketer called me today to offer reduced upgrade from patron. I told him not one more penny until WLP is gone. He then tried to ask what was wrong with WLP. I cut him off quickly and repeated my stance. I wonder how many times that happens to that guy each day.

Yes they should have reincorperated else where. But the NY lawsuit hits very close to as the NRA seems to be guilty as charged

It is not uncommon for a bankruptcy case to be rejected many times by the judge.

DALLAS (AP) — A federal judge dismissed the National Rifle Association’s 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 NRA’s 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 NRA’s former advertising agency grilled the group’s 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.

“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 added.

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.

LaPierre pledged in a statement to continue to fight for 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. We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries.”

Lawyers for New York Attorney General Letitia James argued that the case was an attempt by NRA leadership to escape accountability for using the group’s coffers as their personal piggybank. But the NRA’s attorneys said it was a legitimate effort to avoid a political attack by James, who is a Democrat.

LaPierre testified that he kept the bankruptcy largely secret to prevent leaks from the group’s 76-member board, which is divided in its support for him.

Hale dismissed the NRA’s case without prejudice, meaning the group can refile it. However, he warned that in doing so the NRA’s leaders would risk losing control.

The judge wrote that if the case is refiled, he would immediately take up “concerns about disclosure, transparency, secrecy, conflicts of interest” between NRA officials and their bankruptcy legal team. He said that the lawyers “unusual involvement” in the NRA’s affairs raised concerns that the group “could not fulfill the fiduciary duty” and might lead him to appoint a trustee to oversee it.

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

The NRA declared bankruptcy in January, five months after James’ office sued seeking its dissolution following allegations that executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts and other questionable expenditures.

James is New York’s chief law enforcement officer and has regulatory power over nonprofit organizations incorporated in the state. She sued the NRA last August, saying at the time that the “breadth and the depth of the corruption and the illegality” at the NRA justified its closure. James took similar action to force the closure of former President Donald Trump’s charitable foundation after alleging he used it to advance business and political interests.

During a news conference after the ruling, James said she read transcripts of LaPierre’s testimony, which was “filled with contradictions.” She reiterated that she intends to see the NRA dissolved, which ultimately would be decided by a judge, not the attorney general. The discovery process in her lawsuit is ongoing, James said, and she expects a trial to happen sometime in 2022.

“There are individuals and officers who are using the NRA as their personal piggy bank and they need to be held accountable,” James said.

Shannon Watts, who founded Moms Demand Action for Gun Sense in America, said in a series of tweets that the bankruptcy dismissal “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 the Michael Bloomberg-backed Everytown for Gun Safety.

The NRA’s financial standing has been upended by the coronavirus pandemic, but there was consensus during the bankruptcy trial that it remains financially sound

Last year, the group laid off dozens of employees, canceled its national convention and scuttled fundraising. The NRA’s bankruptcy filing listed between $100 million and $500 million in assets and the same range in liabilities. In announcing the case, it trumpeted being “in its strongest financial condition in years.”


“I think the question is, despite those self-inflicted wounds and despite the fact that they’re in some ways a shadow of their former self, can they continue to exert influence and try and keep the opponents of even the most modest reforms to increase gun safety toeing the line?” he said.

https://apnews.com/article/nra-bankruptcy-dismissed-a281b888b64d391374f24539a820d60f

Wayne can always incorporate a beef cattle farm in India.

Rank-and-file NRA members, particularly long-time contributors,
need to file suit to take over the NRA, if nothing else to expose that the NY AG's motivation is to pillage the NRA instead of cleaning it up. If the rank and file enter the picture, they can go after the NY AG in federal court once she plays her hand. Would be a nice two-fer to see WLP and the NRA board removed AND the NY AG taken down for her politically motivated attack on the NRA.