US judge tosses NRA bankruptcy bid, letting NY seek dissolution

US judge tosses NRA bankruptcy bid, letting NY seek dissolution

Advocates for gun violence prevention rejoiced Tuesday when a federal judge dismissed the National Rifle Association's bankruptcy case, ruling that the powerful gun lobby declared bankruptcy in an attempt to avoid facing a NY state lawsuit that accuses the organization of fraud and seeks to disband it.

The decision from Judge Harlin Hale, of the Northern District of Texas, came after a month-long trial in which NRA attorneys and officials argued that their bankruptcy case should move forward in Texas.

U.S. Bankruptcy Judge Harlin Hale's ruling effectively scuttles the NRA's push to relocate from NY to Texas.

Hale's decision elicited praise from groups working to end gun violence nationwide.

"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", Hale wrote, according to Reuters. But the judge said problems in how the group is managed could lead to the appointment of a trustee to oversee its affairs.

CNN has reached out to a spokesman for the NRA for comment.

"The NRA does not get to dictate if and where it will answer for its actions, and our case will continue in NY court", James wrote on Twitter.

"We remain an independent organization that can chart its own course, even as we remain in NY to confront our adversaries", he said. "No one is above the law, not even one of the most powerful lobbying organizations in the country".

A judge has rejected the @NRA's attempt to claim bankruptcy and evade accountability. "The ruling just clears up that fact that that litigation is going to continue and that there isn't this remedy that entailed a third-party effectively running the organization in the meantime".

"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", Hale wrote.

In dismissing the bankruptcy bid, Hale singled out Wayne LaPierre, the NRA's longtime chief executive, for criticism.

Hale's dismissal is without prejudice, meaning the NRA can try again to file for bankruptcy.

"We are as financially strong as we have been in years", the letter signed by LaPierre read.

The attorney general's office filed the lawsuit against the NRA last August. But Pronske countered that financial statements showed the NRA has "plenty of cash on hand".

The ruling leaves the NRA to face a NY state lawsuit that accuses it of financial abuses and aims to put it out of business.

The NRA's legal team contended that putting the organization into Chapter 11 bankruptcy-a move that LaPierre made "without the knowledge or assent" of other top officers and most of the 76-member board, which is "divided in its support" for him-was "a legitimate effort to avoid a political attack by James, who is a Democrat", AP noted.

James' office alleged the organization violated NY laws governing nonprofits by routinely going around the organization's internal controls to take part in spending that was "inappropriate and wasteful use of charitable assets". Her lawsuit said the NRA diverted millions of dollars to fund luxuries for officials including LaPierre and awarded lucrative contracts to associates and relatives of senior officials. LaPierre testified that he filed for Chapter 11 on behalf of the NRA because he feared James would try to put it into receivership. "I feel very good about where we are".

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