The NRA bankruptcy lawsuit was dismissed. A federal judge said the lawsuit was brought in ‘bad faith’ to avoid a New York lawsuit. Meanwhile the New York Attorney General Letitia James filed the original lawsuit in bad faith.
However, the judge also said the NRA understands the need for compliance. That means the AG’s case falls apart on the hill of compliance.
James’ lawsuit, filed last August, seeks the NRA’s dissolution under state nonprofit law over claims that top executives illegally diverted tens of millions of dollars for trips, no-show contracts, and other expenditures.
She opened an investigation based on no facts like Levrentiy Beria might have done.
At the time, in February of this year, NRA Executive Vice President Wayne LaPierre said, “What NYAG Letitia James is attempting to do to the @NRA is UNAMERICAN. It’s a political hit job because she hates what NRA stands for. Make no mistake, if they can do it to the NRA today, they can do it to any org on the right or left tomorrow.”
U.S. Bankruptcy Judge Harlin Hale of Dallas ruled that the pro-gun-rights group did not file its bankruptcy petition “in good faith” but instead did so “to gain an unfair litigation advantage” and “to avoid a state regulatory scheme.”
The state regulatory scheme is outrageous.
Those purposes are not a proper use of the bankruptcy code, the judge ruled.
The dismissal of the case comes after bankruptcy watchdogs questioned the legitimacy of the NRA’s bankruptcy filing, saying the organization did not qualify as an organization in need of debt reduction.
When it filed for bankruptcy on January 15, the group had said it was in “its strongest financial condition in years.”
But the NRA said it faced a potentially existential crisis due to legal challenges by the New York attorney general. The group said it was hoping to use bankruptcy to restructure its operations and shift its nonprofit registration from New York to Texas, where it believed its mission would be more welcome.
The group faces accusations that its leaders misused funds for personal reasons.
It is an existential crisis.
The NRA issued a statement that they are committed to their members and will keep fighting.
— NRA (@NRA) May 11, 2021