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NRA’s Lawsuit-Dodging Strategy Backfires as TX Judge Dismisses Bankruptcy Claims

The NRA used its bankruptcy filings to address “a regulatory enforcement problem, not a financial one,” the judge said.

National Rifle Association (NRA) President Wayne LaPierre speaks during the NRA Leadership Forum in Atlanta, Georgia, on April 28, 2017.

A federal bankruptcy judge has dismissed the National Rifle Association’s (NRA) bankruptcy claims, filed in Texas despite the organization being based in New York, for being a blatant attempt to avoid litigation over its mishandling of donor funds for the past several decades.

The ruling is considered a huge blow to the gun rights organization, as it allows a lawsuit filed against the group in its home state to move forward unimpeded.

The NRA filed for bankruptcy earlier this year, choosing to do so as part of what it called a “new strategic plan.” In a statement made at the time, the NRA said their plan “involves utilizing the protection of the bankruptcy court” and “dumping New York” to avoid what it described as a “corrupt political and regulatory environment.”

The bankruptcy filing came about just months after New York Attorney General Letitia James filed a lawsuit against the NRA, stating that leaders of the organization had for decades misused millions of dollars in donations from its members and supporters in order to pay for their own personal expenditures.

Judge Harlin Hale, chief of the federal bankruptcy court in Dallas, Texas, was not coy about his reasons for dismissing the bankruptcy filings made by the far right, pro-gun organization.

“The NRA is using this bankruptcy case to address a regulatory enforcement problem, not a financial one,” he said in his ruling.

Hale, who is the 2019 recipient of the Judge William L. Norton, Jr. Judicial Excellence Award, also opined on the organization’s president, Wayne LaPierre, making the decision to file for bankruptcy without discussing it with the NRA’s board of directors as “nothing less than shocking.”

New York AG James responded to the ruling shortly after it was made in a tweet:

“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,” James wrote.

The NRA has not shied away from acknowledging why it made its bankruptcy filings out of state. Indeed, in testimony made earlier this year regarding the bankruptcy claims, LaPierre admitted that it was done to avoid the lawsuit filed by James.

Also revealed in LaPierre’s testimony was the fact that he often took trips on a friend’s yacht, between the years of 2013 and 2018, ostensibly to stay safe from threats he said he had received after mass shooting events.

Yet, while these “security retreats,” as LaPierre called them, were presented as necessary for him to avoid imminent danger, the trips did not take place in close proximity to the mass shooting events. His “retreat,” for example, from threats associated with the December 14, 2012, mass shooting at the Sandy Hook Elementary School (which resulted in the deaths of 20 small children and six adults), did not occur until the summer of 2013.

The New York attorney general filed the lawsuit against the NRA late last summer, stating that leaders of the organization had for decades misused millions of dollars in donations from its members and supporters in order to pay for their own personal expenditures. There was “a culture of self-dealing, mismanagement, and negligent oversight at the NRA that was illegal, oppressive, and fraudulent,” a statement issued last August by James’s office read.

The suit calls for the removal of LaPierre from his position at the organization, punitive actions against other NRA officials who also benefited from misuse of donors’ dollars, and the dissolution of the NRA altogether. The extraordinary step of seeking to end the organization was necessary “[b]ecause the corruption was so broad,” James said, adding that LaPierre and others had “basically destroyed all of the assets of the operation.”

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