A federal judge tossed out the National Rifle Association’s bankruptcy case on Tuesday, imperiling the controversial gun advocacy organization’s attempt to re-organize and relocate to Texas amid a lawsuit from New York authorities seeking to dissolve the group for alleged financial crimes.
The group’s chapter 11 bankruptcy filing, launched in January, was an attempt to “gain an unfair litigation advantage” and “to avoid a state regulatory scheme,” US Bankruptcy Court judge Harlin Hale ruled on Tuesday in court in Dallas.
Last summer, New York attorney general Letitia James sued and sought to dissolve the NRA, accusing top executives like CEO Wayne LaPierre of corruption and financial mismanagement, which they have denied.
Prior to the lawsuit, the NRA was one of the country’s most influential conservative political groups, and has played a key role in blocking attempts at gun reform.
Tuesday’s ruling left the door open for the NRA to file for bankruptcy a second time, though judge Hale suggested if it did so, he would appoint a trustee to manage the organisation, which is currently being overseen by the New York attorney general, further stripping Mr LaPierre and other NRA leaders of control.
“The NRA remains committed to its members and our plan for the future,” NRA CEO and executive vice-president Wayne LaPierre said in a statement on Tuesday. “Although we are disappointed in some aspects of the decision, there is no change in the overall direction of our Association, its programs, or its Second Amendment advocacy.”
NRA executives were accused of using millions in the group’s funds for personal luxuries like trips to the Bahamas, private jets, and expensive meals. They also allegedly steered lucrative contracts to friends and family of top officials in the organisation. They have denied wrondoing.
During the relevant period, the group lost more than $64 million in three years.
“The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets,” New York attorney general LetitiaJames said in August, announcing her prosecution against the group. “The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law.”
At the time, the group attacked the lawsuit as a “baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend.”
On Tuesday, Ms James celebrated the ruling. “The NRA does not get to dictate if and where it will answer for its actions, and our case will continue in New York court,” she wrote on Twitter, adding: “No one is above the law.”