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A federal judge on Tuesday dismissed a National Rifle Association bankruptcy case that would have allowed it to reorganize as a nonprofit in gun-friendly Texas, dealing a blow to the rights group gun that faces a lawsuit in New York that could put him out of business.
NRA filed for Chapter 11 bankruptcy in January and announced it planned to move to Texas. But legal experts said the announcement was more of a legal maneuver to avoid an aggressive trial of New York Attorney General Letitia James than a physical relocation. In August, James accused NRA executives of fraudulently using the group’s funds for decades and aimed to bankrupt the group.
Representatives of the republican state, including the government. Greg Abbott, praised the NRA’s relocation plan, emphasizing the state’s commercial and gun-friendly environment and embracing the gun rights group’s position that it was fleeing a ” toxic political environment “in New York.
But after an 11-day hearing, U.S. bankruptcy judge Harlin Hale in Dallas said he was dismissing the case because the NRA failed to file bankruptcy in good faith. The filing looked less like a “traditional bankruptcy case” and more like “cases where the courts have said the bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory regime”, he wrote.
Although a successThe bankruptcy may not have ended the New York attorney general’s execution measures, Hale added, it could have deprived the attorney general of the ability to dissolve the nonprofit organization, which would have gave the NRA a distinct litigation advantage.
While the NRA’s headquarters and much of its operations are in Fairfax, Virginia, the group has been licensed as a non-profit organization in New York City and is incorporated in the state. In a statement released after the decision, the group said it was not giving up on the move.
“The NRA can still continue to establish business operations in Texas, and the organization will continue to explore moving its headquarters from Virginia,” the statement said. “Texas has over 400,000 NRA members.”
Group CEO Wayne LaPierre said while the NRA was disappointed with some aspects of the decision, it remains committed to its members and its future.
“We remain an independent organization that can chart its own course, even if we stay in New York to face our adversaries,” LaPierre said in a statement. “The NRA will continue to fight as we have for 150 years.”
Hale said the NRA’s conduct during the case continued to worry him. He cited the secrecy and lack of transparency of the group’s executives, including LaPierre, who filed for bankruptcy without the knowledge or support of most of the group’s board members and senior executives. LaPierre said he kept the move a secret to avoid leaks from the group’s 76-member board, which is divided in support for him.