NRA bankruptcy shouldn’t stop lawsuit, says Letitia James

In the wake of the National Rifle Association’s first Federal Bankruptcy Court hearing, the New York Attorney General Letitia James’s The office (D) told a judge not to let the gun group attempt to delay proceedings to disband them.

James sheehan, the chief of the attorney general’s office of charities, denounced the delay requested by the NRA of these efforts in its federal bankruptcy proceedings as gambling.

“The NRA’s apparent attempt to automatically stay this action by filing a notice of suggested bankruptcy is exactly the kind of procedural abuse that the simultaneous exercise of state and federal court jurisdiction is intended to mitigate,” Sheehan wrote in a letter Wednesday.

Less than a week ago, on January 15, the NRA announced that it was “DUMPING New York” by “using bankruptcy court protection” to reestablish itself as a nonprofit organization in Texas. Federal bankruptcy proceedings are progressing rapidly in the Northern District of Texas, where a hearing is scheduled for 2 p.m. Central time.

The besieged gun group has been fighting for its life since the New York attorney general filed a 163-page lawsuit accusing four of its current and former directors of “widespread and systemic unlawful conduct.”

Alleging that the head of the NRA Wayne LaPierre used the group as a “personal piggy bank,” the lawsuit detailed his private jet trips to the tropics and his safaris in Africa with donor money. The attorney general accused NRA leaders of pocketing millions for personal benefit, filing bogus regulatory filings, awarding no-show contracts to loyalists and retaliating against whistleblowers.

When the NRA claimed to call on New York to step down, James stressed that his pursuit of the group would not end.

“The financial status claimed by the NRA has finally reached its moral status: bankrupt,” James wrote in a statement at the time. “While we are reviewing this file, we will not allow the NRA to use this or any other tactic to escape the responsibility and oversight of my office.”

James has made it clear that the NRA’s filing for bankruptcy is at odds with their self-proclaimed financial health.

“The NRA has expressly stated that it seeks to leave New York, its state of incorporation for nearly 150 years, to escape the authority of this Court and the oversight of the Attorney General, which it wrongly accuses of ” ‘Abuse of rights and regulations’, ” the five-page letter states. “The NRA says its bankruptcy filing is not financially motivated, saying the organization” has been in its best financial position in years. “

The NRA does not have an office in Texas, but has asserted the location through an affiliate, Sea Girt, LLC, the attorney general said.

Typically, bankruptcy proceedings stay enforcement actions like these, but James says his action falls under two exceptions designed to protect the public against fraud and against a charity’s abuse of its status. charitable organization. Here’s how his office described this exception:

With respect to the pecuniary finality test, none of the Attorney General’s claims involve a New York State interest in property owned by the NRA, but rather seek to uphold the law of the governing state. administration of the NRA as a state chartered corporation. non-profit charitable corporation. Charitable property financial restitution claims only concern individual defendants. Any money collected by the Attorney General will be returned to the NRA or, in the event of judicial dissolution, used in accordance with the donor ‘s intent or the direction and approval of the Court for purposes substantially similar to the mission of the NRA. Regarding the public order test, the Attorney General does not judge private rights against the NRA, but applies New York law designed to protect the public and beneficiaries of undefined charities as public charity fraud and misconduct group.

If the NRA fails to stay the New York proceedings, the group will go to court again on Thursday on a motion to dismiss. Their lawyer did not immediately respond to an email requesting comment.

Read the NYAG letter below:

(Photo by Alex Wong / Getty Images)

Do you have any advice we should know? [email protected]