In blow to NRA, federal judge dismisses group’s bankruptcy case

The judge ruled that the powerful gun lobby declared bankruptcy in an attempt to avoid facing a New York state lawsuit that accuses the organization of fraud and seeks to disband it.

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SOURCECommon Dreams
Image Credit: AJC.com

Advocates for gun violence prevention rejoiced Tuesday when a federal judge dismissed the National Rifle Association’s bankruptcy case, ruling that the powerful gun lobby declared bankruptcy in an attempt to avoid facing a New York state lawsuit that accuses the organization of fraud and seeks to disband it.

“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 his decision, as the Washington Post reported.

In response to the ruling, New York Attorney General Letita James said in a statement that “the NRA does not get to dictate if and where it will answer for its actions.” James added that “we will now refocus on and continue our case in New York court.”

Hale’s decision elicited praise from groups working to end gun violence nationwide. 

“Today’s decision is a historic win for the rule of law and a sure sign of defeat for the NRA and its corrupt leadership,” Kris Brown, president of Brady, said in a statement. “The NRA’s bankruptcy was deemed to be bad faith, much like every promise and statement the organization has made for decades. The NRA cannot escape justice. The court has ruled against the organization after weeks of damning testimony.”

Last August, James filed a lawsuit seeking to dissolve the NRA “following allegations that executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts, and other questionable expenditures,” the Associated Press reported.

Five months later, the NRA’s top executive, Wayne LaPierre, announced that the right-wing nonprofit would file for bankruptcy and move its headquarters from New York, where it was chartered in 1871, to Texas.

The NRA’s legal team contended that putting the organization into Chapter 11 bankruptcy—a move that LaPierre made “without the knowledge or assent” of other top officers and most of the 76-member board, which is “divided in its support” for him—was “a legitimate effort to avoid a political attack by James, who is a Democrat,” AP noted

The court, however, sided with James’ office, which argued that NRA leaders were requesting bankruptcy protection and trying to reincorporate in Texas to “escape accountability for using the group’s coffers as their piggybank,” the news outlet explained.

In her statement, Brown said: “This decision was correct and it marks a new chapter in the legal proceedings against the NRA. Brady reiterates its support for New York Attorney General Letitia James, who has prudently sought to hold the NRA fully accountable for its malfeasance and corruption.”

“Today’s victory provides even more momentum for AG James and a similar lawsuit filed by Washington, D.C. Attorney General Karl Racine,” Brown added. “As we have said in the past, the time is right to dissolve today’s corrupt version of the NRA, which has strayed hopelessly away from its roots focused on gun safety.”

LaPierre, meanwhile, said Tuesday that the NRA will “keep fighting.”

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