Judge Rejects NRA Bankruptcy Filing

A Judge, on Tuesday, Dismissed the National Rifle Association’s (NRA) Bankruptcy Case, Ruling that the Organization Cannot use the Bankruptcy Code to Relocate from New York, where it faces a Lawsuit, to Texas, a more Gun-Friendly State.

“The question the Court is faced with is whether the existential threat facing the NRA is the type of threat that the Bankruptcy Code is meant to protect against. The Court believes it is not,” U.S. Bankruptcy Judge, Harlin Hale, wrote in the Decision. “...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 added.

With this Decision, the Gun Rights Advocacy Group will remain Incorporated in New York.

The Organization filed for Bankruptcy in January 2021 and Planned to Reincorporate in Texas. The Plan, it said at the time, “involves utilizing the protection of the bankruptcy court.”

The NRA said it was leaving “what it believes is a corrupt political and regulatory environment in New York.”

The NRA’s Legal Action followed an August 2020 Lawsuit from New York Attorney General, Letitia James (D), which called for Dissolving the Organization.

The Lawsuit alleged that the Group Violated State Law Governing Nonprofit Organizations, which Contributed to a Loss of more than $64 Million over Three years.

Earlier this month, James’s Office had argued in Court that the NRA declared Bankruptcy specifically to Avoid Oversight, calling for the Case to be Dismissed.

James praised the Ruling in a Tweet on Tuesday, writing, “No one is above the law.”

The NRA, she wrote, "does not get to dictate if and where it will answer for its actions, and our case will continue in New York court."

The Court Dismissed the case without Prejudice, meaning the NRA can try to File for Bankruptcy again in the Future.

Hale wrote, however, that the Court would “immediately take up some of its concerns about disclosure, transparency, secrecy, conflicts of interest of officers and litigation counsel, and the unusual involvement of litigation counsel in the affairs of the NRA.”

Hale added that these Circumstances could Lead to the Appointment of a Trustee “out of concern that the NRA could not fulfill the fiduciary duty” as Required by the Bankruptcy Code.

The Trustee when then Oversee the Organization's Affairs.










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