A federal bankruptcy judge rejected the National Rifle Association’s Chapter 11 petition on Tuesday, finding that the cash-flush gun group brought their case in bad faith to avoid a lawsuit by the New York attorney general which seeks to dissolve the organization.
A federal bankruptcy judge rejected the National Rifle Association’s Chapter 11 petition on Tuesday, finding that the cash-flush gun group brought their case in bad faith to avoid a lawsuit by the New York attorney general which seeks to dissolve the organization. “There are 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,” U.S. Bankruptcy Judge Harlin Hale found in a 33-page ruling on Tuesday. “The Court agrees with the NYAG that the NRA is using this bankruptcy case to address a regulatory enforcement problem, not a financial one.” Judge Hale’s decision follows a roughly monthlong trial featuring blockbuster testimony by the NRA’s executive vice president and CEO Wayne LaPierre and several other current and former executives, some of whom testified that the gun group chief’s decision to form a Texas entity and file for bankruptcy there blindsided them. “What concerns the Court most though is the surreptitious manner in which Mr. LaPierre obtained and exercised authority to file bankruptcy for the NRA,” Hale wrote in his ruling.
