Court Finds That NRA’s Move to Texas Could Still Be Accomplished Outside Bankruptcy
Fairfax, Va. – In response to today’s dismissal of a prior bankruptcy filing, the National Rifle Association of America (“NRA”) announced that it will continue to fight on all fronts in the interests of its mission and its members.
The New York Attorney General and others had aligned against the NRA in opposition to the NRA’s reorganization plan announced on January 15, 2021. They sought to dismiss the NRA’s bankruptcy filing with prejudice or, in the alternative, appointment of a court-appointed trustee, to take control of the Association’s business and financial affairs. Importantly, a United States Bankruptcy Court in Dallas did not appoint a Trustee or examiner, even as it ruled the Association may not proceed with the chapter 11 case. The court dismissed the bankruptcy filing without prejudice, meaning the NRA does have the option to file a new bankruptcy case.
During a 12-day hearing that occurred over approximately four weeks, the NRA established that it had adopted new policies and accounting controls, displaced many “insiders” who had allegedly abused the Association, and accepted reparations for costs voluntarily determined to be excess benefits. The hearing proceedings focused on the NRA’s compliance efforts, and the organization’s renewed commitment to good governance.
In an opinion, dated May 11, 2021, the Hon. Harlin D. Hale, U.S. Bankruptcy Judge, Northern District of Texas, wrote, “In short, the testimony…suggests that the NRA now understands the importance of compliance. Outside of bankruptcy, the NRA can pay its creditors, continue to fulfill its mission, continue to improve its governance and internal controls, contest dissolution in the NYAG Enforcement Action, and pursue the legal steps necessary to leave New York.” Read more