NRA Bankruptcy Proceedings
On January 15, 2021, the NRA filed for bankruptcy in a federal court in Texas. The filing was made under Chapter 11 of the bankruptcy code, meaning the NRA was seeking to reorganize through the bankruptcy process.
The NRA had been struggling financially for the last several years. The organization has run deficits for the past four years, laid off a significant portion of its staff, and had been spending millions in legal fees to answer for its conduct in courts throughout the country.
While already losing power and hemorrhaging money, the NRA’s bankruptcy filing appeared to be an attempt to escape legal responsibility for alleged fraud and lining the pockets of their top executives. The NRA attempted to use the bankruptcy process to halt legal proceedings against it by state attorneys general, former vendors, donors, and others. In fact, NRA board member Bob Barr admitted as much, saying the bankruptcy “has nothing to do with the NRA’s financial position… It simply is a legal vehicle to move under protection of federal laws, to escape the abuse by the New York authorities.”
A twelve-day trial in federal bankruptcy court in April and May of 2021 marked the first time executives from the National Rifle Association (NRA) — including NRA CEO Wayne LaPierre and others — were examined and cross-examined in open court related to the financial scandals that have engulfed the NRA for the past three years. Put simply: the NRA viewed bankruptcy as a proverbial get-out-of-jail-free card that would solve all its political, financial, and legal troubles. Instead, the bankruptcy process and the recent trial testimony have irreparably damaged the NRA. NRA Watch monitored and posted updates from the bankruptcy docket and various hearings, which can be found below under “filings.”
In a written decision issued on May 11, the Judge dismissed the NRA’s Chapter 11 filing for not being filed in “good faith,” holding the “NRA is using this bankruptcy case to address a regulatory enforcement problem, not a financial one.” The Court also wrote “there are several aspects of this case that still trouble the Court,” and agreed with comments from the NRA’s own counsel that “there were cringeworthy facts during this trial.” The Court, which heard 12 days of trial testimony, wrote “it has become apparent that the NRA was suffering from inadequate governance and internal controls.” The Court’s decision relied largely on the testimony and actions of NRA CEO Wayne LaPierre in throwing out the case, writing “what concerns the Court most though is the surreptitious manner in which Mr. LaPierre obtained and exercised authority to file bankruptcy for the NRA. 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.”
While the trial involved novel and complex questions relating to bankruptcy law, what was most significant to NRA members, gun enthusiasts, lawmakers, and regulators were the avalanche of revelations about the NRA’s financial dealings that were unearthed during the trial. The public learned virtually no one at the NRA knew about the plans to file bankruptcy, which is consistent with witnesses that testified that NRA CEO Wayne LaPierre’s management of the NRA was a “trainwreck” and the organization was run as “Wayne’s kingdom” where he employed what he reportedly called “management by chaos.”
The trial included new information about LaPierre’s luxurious life on the company dime, including over $13 million for travel and a $17 million contract for a post-employment golden parachute. In addition, LaPierre was forced to testify about his annual week-long trips to the Bahamas, where he stayed on one of two yachts owned by a Hollywood producer who is a stakeholder of key NRA vendors. A longtime LaPierre confidant testified LaPierre told him that lawyer Bill Brewer was the “only one who can keep me out of jail,” and that Brewer was the only one standing between him and “an orange jumpsuit.” Likewise, an NRA board member testified he believes the NRA is seeking “to avoid criminal prosecution.” There was even a shocking revelation that the NRA president burned and shredded NRA documents.
The filings on this page are a selection of the more significant filings in the matter. The full docket can be accessed at the PACER page for Bankruptcy Court of the Northern District of Texas. The case number is 21-30085 and the matter is in front of Judge Harlin D. Hale.