Judge Dismisses NRA Bankruptcy Case

[BUtterfield 8 41,819]

A federal bankruptcy judge dismissed an effort by the National Rifle Association to declare bankruptcy on Tuesday, ruling that the gun rights group had not filed the case in good faith. 

The ruling slams the door on the NRA's attempt to use bankruptcy laws to evade New York officials seeking to dissolve the organization. In his decision, the federal judge said that "using this bankruptcy case to address a regulatory enforcement problem" was not a permitted use of bankruptcy. 

The bankruptcy trial had paused other legal challenges the NRA had been facing, but this decision returns the NRA to its confrontation with the New York Attorney General, which is seeking to shut down the group for alleged "fraud and abuse."

"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," New York Attorney General Letitia James said in a tweet after the ruling. "We sued the NRA to put an end to its fraud and abuse, and now we will continue our work to hold the organization accountable."

The National Rifle Association said during the trial that it had enough money to pay its creditors. Instead, it declared bankruptcy for a tactical reason: to avoid the reach of the New York Attorney General. Last year, the New York AG sought a court's approval to dissolve the NRA, alleging a wide variety of financial misconduct, chiefly by the NRA's top executive: CEO Wayne LaPierre. 

The NRA did not have an immediate comment to the news, but had argued during the case that it was being persecuted for its political views. The group asked a federal bankruptcy judge to halt its other legal cases and allow it to reorganize in Texas, where it might be out of the reach of the New York AG.

"In the parlance of bankruptcy, we have a predatory lender who is seeking to foreclose on our assets," argued Greg Garman, an attorney representing the NRA.

Source