Texas Judge Rejects NRA Bankruptcy Petition in Savage Ruling
A federal judge in Dallas, Texas rejected the National Rifle Association’s Chapter 11 bankruptcy petition on Tuesday because the organization filed for protection “in bad faith” in order to skirt fraud and corruption charges in New York State.
NRA Executive Vice President Wayne LaPierre filed for bankruptcy protection on behalf of the NRA in January and tried to relocate to Texas believing that he could evade accountability for defrauding its members and misusing funds for personal enrichment.
Following a 12-day trial, United States Bankruptcy Judge Harlin Hale ruled that the NRA was trying to obtain an “unfair litigation advantage” over New York Attorney General Letitia James, who is pursuing criminal indictments against LaPierre and the NRA.
Hale blasted the NRA for its attempt to thwart justice in his 33-page ruling.
“Several aspects of this case that still trouble the Court, including the manner and secrecy in which authority to file the case was obtained in the first place, the related lack of express disclosure of the intended Chapter 11 case to the board of directors and most of the elected officers, the ability of the debtor to pay its debts, and the primary legal problem of the debtor being a state regulatory action. The Court agrees with the NYAG that the NRA is using this bankruptcy case to address a regulatory enforcement problem, not a financial one,” Hale said, according to Law & Crime.
“Some of the conduct that gives the Court concern is still ongoing. The NRA appears to have very recently violated its approval procedures for contracts in excess of $100,000. Mr. LaPierre is still making additional financial disclosures. There are also lingering issues of secrecy and a lack of transparency,” he said.
“Excluding so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer and the general counsel, is nothing less than shocking,” the judge said, adding that “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.”
James, meanwhile, lauded Hale’s ruling in a statement:
Weeks of testimony have demonstrated that the NRA and Wayne LaPierre simply filed chapter 11 bankruptcy to avoid accountability. This trial underscored that the NRA’s fraud and abuse continued long after we filed our lawsuit. Without a doubt, the board was deceived when bankruptcy language was hidden in Mr. LaPierre’s contract earlier this year. Today’s order reaffirms that the NRA does not get to dictate if and where it will answer for its actions. The rot runs deep, which is why we will now refocus on and continue our case in New York court. No one is above the law, not even one of the most powerful lobbying organizations in the country.