(Reuters) – The National Rifle Association filed for bankruptcy on Friday, a sudden development that could help the gun rights group evade a New York attorney general lawsuit seeking its disbandment.
The NRA filed for Chapter 11 protection in Federal Bankruptcy Court in Dallas and said it plans to re-integrate into Texas to escape “a corrupt political and regulatory environment” in New York City, where it is now incorporated.
“Texas appreciates the contributions of the NRA, celebrates our law-abiding members, and joins us as a partner in defending constitutional freedom,” CEO Wayne LaPierre said in a letter to members. “We seek the protection of officials in New York who have unlawfully abused and used as a weapon the powers they wield against the NRA and its members. “
The NRA was sued in August by New York Attorney General Letitia James, who accused LaPierre and other senior executives of self-operations and mismanagement, and said the group’s activities violated state laws governing nonprofit organizations.
James said NRA officials embezzled millions of dollars to fund luxury lifestyles, including vacations and private jets, and to buy the silence and loyalty of former employees, which cost to the group $ 64 million over three years.
“The financial status claimed by the NRA has finally reached its moral status: bankrupt,” James said in a statement Friday. “We will not allow the NRA to use this or any other tactic to escape the responsibility and oversight of my office.”
In its own statement, the NRA did not promise any immediate changes to its operations or staffing and said it was not insolvent, with LaPierre adding that it was “as strong financially as we have been since. years”.
The group said it will continue to defend the constitutional rights of its members under the Second Amendment, which guarantees the right to own and bear arms.
Critics say the NRA is a catalyst for gun violence.
In his lawsuit, James said the incorporation of the NRA as a nonprofit in New York gave him the power to seek its disbandment. The NRA filed a counter-suit in federal court in Albany, New York, accusing it of violating its free speech rights because it didn’t like his policies.
The NRA accused James, a Democrat, of calling for a “corporate death sentence” as part of a partisan push to achieve a “career goal.”
Sixteen Republican attorneys general filed a brief supporting the NRA case.
Friday’s decision will likely put the New York trial on hold, and a reincorporation in Texas could deprive James of his power to disband the group.
Reporting by Jan Wolfe and Jonathan Stempel; Editing by Rosalba O’Brien and Jonathan Oatis