Federal Judge Rejects NRA’s Bid to Declare Bankruptcy to Avoid NY Legal Trouble

A federal judge in Texas rejected the National Rifle Association’s bid to declare bankruptcy in an effort to move the group from New York, The New York Times reports.

The NRA tried to avoid legal action from New York Attorney General Letitia James, who is seeking to remove NRA chief Wayne LaPierre and shut down the group, by relocating to Texas and filing for bankruptcy in the state.

But federal bankruptcy Judge Harlin Hale called out the gun lobby for “using this bankruptcy case to address a regulatory enforcement problem, not a financial one.”

Hale added that LaPierre’s move to file for bankruptcy without informing the group’s board of directors or his own top officials was “nothing less than shocking.”

Hale warned that the group would risk the appointment of an outside trustee to take over the organization and its finances if it tries to revive the case.

NRA’s schemes haven’t stopped:

The NRA argued to the court that it was undertaking new practices to clean up its act and self-auditing their finances. But Hale found that “some of the conduct that gives the Court concern is still ongoing.”

Hale said that the NRA appeared to “to have very recently violated its approval procedures” for large contracts, and that “Mr. LaPierre is still making additional financial disclosures.”

Hale also said that the group has continued to have “issues of secrecy and a lack of transparency.”

The NRA’s bid came after a long-running investigation by James found that the NRA’s executives used the group’s funds for personal expenses and awarded contracts to associates.

“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.

James touts decision:

James said after the ruling that the NRA “cannot reorganize in Texas” without her approval, which she said would not be granted while the New York regulatory action is ongoing.

“The rot runs deep,” James said, noting that the judge also cited “ongoing and lingering issues.”

“The N.R.A. does not get to dictate if and where it will answer for its actions,” she said.

Gun safety groups hailed the ruling on Tuesday.

“This bankruptcy was a Hail Mary attempt by the N.R.A. to avoid accountability, but the court saw right through it,” said Nicholas Suplina of the gun control group Everytown. “The N.R.A.’s bankruptcy was unprecedented, and the court properly dismissed it for lack of merit. The road ahead for the N.R.A. just got much harder.”

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