Judge Dismisses NRA Bankruptcy Case, Heightening Risk For Dissolution Of Group
May 11, 20214:43 PM ET
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 trial also gave a rare look into the behavior of Wayne LaPierre, who has led the controversial organization for almost 30 years. A secretive figure, LaPierre makes few public appearances outside of carefully scripted speeches.
During questioning, he admitted to annual trips to the Bahamas, where he would stay on a luxury yacht belonging to an NRA vendor — a conflict of interest he did not disclose at the time, which testimony and court proceedings showed was in contravention of NRA policy. Instead, he justified the Caribbean trips to the court as a "security retreat" that was necessary for his safety and that of his family members.