A Texas federal judge has filed a bankruptcy petition against the National Rifle Association and ruled that Chapter 11 of the gun rights group filed a lawsuit to avoid a lawsuit by the New York Attorney General.
Judge Harlin Hale wrote in Tuesday’s ruling that the bankruptcy lawsuit was not filed “in good faith,” either because it was filed for “unfair litigation advantage or because it prevented state regulation.”
The failure of the NRA, introduced late Friday in January, came as a surprise to observers, as there was little information about the immediate financial difficulties in the prominent gun lobby, Wayne LaPierre, its chief executive and vice president.
It took several months for Letitia James, New York’s progressive attorney general, to sue the NRA in an attempt to prosecute and break into state court. The state argued that a gun lobby was used personal box his leadership, including LaPierre.
At the time of the Chapter 11 request, LaPier wrote in a public letter, “The plan can be easily summarized: We are DUMPING New York and making plans to re-enter the Texas NRA.” LaPier later stated that the NRA was “as strong as it was financially over the years.”
James asked the bankruptcy court to dismiss the case. Other NRA agents have sought to appoint a third-party examiner or administrator.
In deciding whether or not to dismiss the lawsuit in an 11-day trial in Texas bankruptcy court, details of the NRA and LaPier’s business practices were revealed, some of which the court said were “significant”.
Hal wrote that he was concerned that the filing of the bankruptcy was done by LaPierre with little contribution or knowledge from other NRA leaders.
He wrote: “Excluding so many people from the decision-making process for bankruptcy, the majority of the board of directors, chief financial officer and chief executive officer, among others, is nothing short of shocking.”
Hal acknowledged in his decision that the group was “financially healthy” and was likely to charge creditors more quickly outside of a court-supervised reorganization.
James wrote on Twitter on Tuesday evening that he would continue to follow the NRA in state courts: “The NRA he does not get the dictation that he will answer for his actions and where he will answer. . . No one is above the law. “
“When bad faith was revealed from the start, one has to wonder what the hell he was thinking with the NRA’s failure strategy,” said Adam Levitin, a Georgetown law firm who has followed suit.
He added: “That being said, the remedy – to be released without harm – is the least bad outcome.
“LaPier continues to control the NRA, and he wouldn’t have it, unless the court dropped the case, but appointed a board of trustees.”