Judge dismisses NRA bankruptcy case in blow to gun group

https://www.wjhl.com/news/nati...n-blow-to-gun-group/

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.”

Adam Skaggs, chief counsel at the Giffords Law Center to Prevent Gun Violence, said that even a weakened NRA will likely continue to shape America’s gun debates.

“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.

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Maybe the NRA will have to roll some heads to show they are serious. I can think of one in particular to show they mean business…

That one particular head would be a good start.

Let's just say it out loud. Can LaPierre. He has probably been on the take since Day 1 and a good housecleaning is in order.

WLP used it as his personal piggy bank and a do nothing board mostly went along.
We need a strong well funded organization but it really went off the rails.

To late. They're done. The NYS AG will use Lapierre's inproprieties to eliminate or get control of the organization.

quote:

Originally posted by bordeth:
Let's just say it out loud. Can LaPierre. He has probably been on the take since Day 1 and a good housecleaning is in order.

It is long past time for another “Cincinnati Rebellion” to take place.

I am beyond incensed at the way in which WLP and his fellow travelers have so wantonly abused the trust that so many people have placed in the NRA. I have disabled and fixed-income retired friends for which making a $20 monthly donation to the organization was a sacrifice. Then, learning that they were helping to buy designer suits for Wayne.

As with many of you I’ve given a fair amount of money over the years to the NRA with an expectation that there would be some sense that the organization had a fiduciary responsibility in their use of member donations; this does not appear to be the case in any way.

I’ve attempted in the recent past with letters and emails to the NRA expressing concerns which garnered responses that were little more than to tell me to not question and continue to send money.

No more.

The monthly magazines I receive now hit the trash can unread as do all requests for donations.

From my perspective the current leadership at the NRA has simply knitted the rope that our opponents will use in an effort to asphyxiate the Organization and its influence.

Silent

quote:

Originally posted by BBMW:
To late. They're done. The NYS AG will use Lapierre's inproprieties to eliminate or get control of the organization.

And that would be a damned tragedy. I would hope most true gun owners would understand that and not just shrug their shoulders at what is an obvious targeted, politically motivated attack by a leftist AG.

Imagine the NY government getting access to the membership data for NRA.

quote:

Originally posted by SigSAC:
Imagine the NY government getting access to the membership data for NRA.

Well, I wasn't planning on ever going to NY again. But something like this would guarantee I never go back there.

quote:

Originally posted by Dakor:
Certainly part of the governance problem is the size of the Board. No board should be larger than 9 members and that’s pushing it. More than that in my professional opinion is simply a crowded honorary society (to themselves).

I’ve been involved with boards up to fifteen members that have been well run. I have trouble imagining more than that, but particularly where there is a lot of work for the board, nine may not be enough.
I will note that the organization with the fifteen member board did most of the work in committees. Each board member was expected to be on at least one committee, most were on two.

quote:

Originally posted by Rick Lee:

quote:

Originally posted by SigSAC:
Imagine the NY government getting access to the membership data for NRA.

Well, I wasn't planning on ever going to NY again. But something like this would guarantee I never go back there.

They might decide to publish that information. If they get control of it, there is nothing to keep them from doing so - or sharing with other governmental agencies. If that were to happen, who knows what they would do to lives and reputations if they push a scenario.

How does WLP continue to be untouchable? It's clear there is a vacuum of leadership that he has filled, surrounding himself with flunkeys and enablers, but at some point others in responsible positions need to step up and do what's right for the good of the organization. I guess Oliver North tried to be that guy but WLP still had too much support from the phony BOD at the time. I hate to say it, but it appears it's going to require outside legal intervention to oust him.

Because he's managed to fill the board with his cronies who don't care. Unless the board is flushed, an new non-WLP supporting members are installed, nothing will change from within. And if the NYS AG gets control, she'll just Nike the entire organization.

quote:

Originally posted by bigwagon:
How does WLP continue to be untouchable? It's clear there is a vacuum of leadership that he has filled, surrounding himself with flunkeys and enablers, but at some point others in responsible positions need to step up and do what's right for the good of the organization. I guess Oliver North tried to be that guy but WLP still had too much support from the phony BOD at the time. I hate to say it, but it appears it's going to require outside legal intervention to oust him.

A 76 member Board of Directors will do that. I'm sure deciding what's for lunch is one of the more difficult decisions they can make.

Just before canning Wayne, they need a high profile celebrity like Charlton Heston to get things back in order.

Wondering whom that could be....

quote:

Originally posted by Balzé Halzé:

quote:

Originally posted by BBMW:
To late. They're done. The NYS AG will use Lapierre's inproprieties to eliminate or get control of the organization.

And that would be a damned tragedy. I would hope most true gun owners would understand that and not just shrug their shoulders at what is an obvious targeted, politically motivated attack by a leftist AG.

Amazing how people will associate the NYAG getting control of the largest, most powerful gun lobby as a democrat and closing it down, killing off any work in DC as a good thing because - WLP.

just shows how people don't look at the big picture, right now it doesn't matter about WLP, it matters that the NRA survives, otherwise we've all lost a large voting block organization.

Soros, Moms Against Guns, Everytown, and others are funding this attack, today the amount of group think and group funding along with getting governments to help is the enemy.

Better focus on keeping the NRA afloat as priority one because the fucks in DC will abandon us as quickly as rats in a sinking ship...

I'll be the first to admit that I have not really followed this story at all. But let's see if I have a grasp on it.

The state of NY sues the NRA, with Attorney General Letitia James suing to dissolve the organization.

The NRA files for bankruptcy, so they can dissolve in NY and re-organize outside of NY.

The judge throws out the bankruptcy. Which means the AG of NY must have tried to stop the bankruptcy.

So the NRA wants to leave NY. And NY wants the NRA to leave. Both sides want the same thing. I'm not the smartest guy in the room, but these folks are idiots.

[QUOTE]Originally posted by BBMW:
To late. They're done. The NYS AG will use Lapierre's inproprieties to eliminate or get control of the organization.

A member of the NRA BOD who is incensed with WLP and his Executive Assistant told me if the NY Atty Gen dissolves the NRA NY will get all of the NRA assets.....
He also stated their legal fees were 50 million to deal with current issues.

quote:

So the NRA wants to leave NY. And NY wants the NRA to leave. Both sides want the same thing

Not even close to what the AG in NY wants.

They want the assets of the NRA in NY State coffers, the NRA shuttered, and it's memebers power in DC, Albany, and all state capitals neutered, .....