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 will be seeking to reorganize through the bankruptcy process.
The NRA has 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 has 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 should be seen for what it is: an attempt to escape legal responsibility for alleged fraud and lining the pockets of their top executives. The NRA will attempt 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.”
However, bankruptcy proceedings could accelerate the NRA’s moment of reckoning. The NRA’s finances will be opened up to additional scrutiny from the court, creditors, and the media. Current management could even lose control of some day-to-day decision making. And some of the NRA’s legal disputes may be adjudicated in the bankruptcy court. That’s why NRA Watch will monitor and post updates from the bankruptcy docket and various hearings.
Several experts in the bankruptcy field questioned the validity of the NRA’s bankruptcy filing, in particular focusing on whether the NRA’s filing was made in good faith.
- Georgetown University Professor Adam Levitin: “I see it as a Hail Mary for [the NRA]…. They may know they’re dead in the water if they don’t get out of the A.G.’s grasp.”
- University of Pennsylvania Professor David Skeel: ““There’s only one rule for a good-faith bankruptcy filing… You can’t say: ‘I don’t need bankruptcy. I’m really only here because I’ve got this other problem.’”
- University of Illinois Professor Robert Lawless: “If you take what the NRA is saying at face value, it presents a strong argument for the case to be dismissed for a lack of good faith. . . They’re going to have to come up with some financial reasons for doing this.”
The NRA’s attempt to skip out of its New York not-for-profit incorporation and avoid answering the findings of wrongdoing by the New York Attorney General is not only desperate – it’s unlikely to be successful. In reality, any move out of New York would likely require the approval of the New York Attorney General.
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.