Judge dismisses NRA’s bankruptcy petition, allowing New York AG lawsuit to move forward
A federal judge has dismissed the National Rifle Association’s petition for bankruptcy, saying it was filed in “bad faith” in order to avoid litigation by the New York Attorney General’s Office, which has sued to dissolve the NRA for allegedly misusing charitable funds.
The decision from Judge Harlin Hale came after a month-long trial in which NRA attorneys and officials argued that their bankruptcy case should move forward in Texas. New York Attorney General Letitia James’ office intervened in the case and asked to dismiss the petition, saying the NRA’s decision to file for bankruptcy in Texas and ask to be reincorporated there was a way to “remove the NRA from regulatory oversight.”
Hale agreed with James’ office’s argument in his ruling issued Tuesday.
“The Court finds there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme,” Hale wrote in his decision.
Hale also declined to appoint a trustee or examiner to oversee the NRA’s finances.
CNN has reached out to a spokesman for the NRA for comment.
In a statement posted to Twitter, James said, “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. No one is above the law.”
The NRA’s headquarters is in Fairfax, Virginia, but it’s been incorporated in the state of New York since shortly after the Civil War.
In January, the NRA filed for bankruptcy and as part of its petition sought to be reincorporated in Texas, a move that came five months after James’ office filed a suit seeking to dissolve the organization.
James’ office alleged the organization violated New York laws governing nonprofits by routinely going around the organization’s internal controls to take part in spending that was “inappropriate and wasteful use of charitable assets.”
The suit alleges NRA leadership used millions from the group’s reserves to fund lavish trips on private jets, meals and other personal expenses and that money was diverted to benefit NRA insiders and favored vendors, that Chief Executive Officer Wayne LaPierre handpicked associates to “facilitate his misuse of charitable assets” and that the NRA board did not follow an appropriate process to determine “reasonable” compensation for NRA executives, including LaPierre.
This story is breaking and will be updated.
