GunsIssuesJudicialBankruptcy Judge Hinders NRA’s Plans to Dump New York for Texas

A federal judge in Texas dismissed a bankruptcy filing from the National Rifle Association, which was seeking to leave New York and reincorporate in Texas.
May 12, 2021
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Facing legal challenges in New York, the National Rifle Association (NRA) announced in January its plans to abandon the state and pursue a plan to reincorporate in Texas.

The NRA filed bankruptcy claiming that it was doing so as a central part of the plan to move to Texas, but on Tuesday, U.S. Bankruptcy Judge Harlin Hale of the Northern District of Texas dismissed the case.

Hale didn’t buy that the NRA filed the bankruptcy as a means to reincorporate in Texas, noting, “While the Court does not find that reincorporating in Texas was the true purpose of the bankruptcy filing, the Court would have concerns even if it were.”

“Reincorporating in Texas could be accomplished outside of bankruptcy pursuant to applicable regulations for New York not-for-profit organizations, which begs the question of what the Bankruptcy Code is being used for,” said Hale.

Instead of filing bankruptcy for the primary purpose of moving to Texas, Hale said that the NRA was “seeking the protection of the Bankruptcy Code” to defend against New York’s regulatory actions targeting the organization.

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“The question the Court is faced with is whether the existential threat facing the NRA is the type of threat that the Bankruptcy Code is meant to protect against. The Court believes it is not,” he wrote.

Hale opted against dismissing the case with prejudice, meaning that the organization could file for bankruptcy again.

However, Hale noted that should the NRA pursue that option, the court “would immediately take up some of its concerns about disclosure, transparency, secrecy, conflicts of interest of officers and litigation counsel, and the unusual involvement of litigation counsel in the affairs of the NRA,” and potentially appoint a trustee over the organization.

While the move is a setback to the NRA’s plans, CEO Wayne LaPierre said that the pro-Second Amendment group “remains committed to its members and our plan for the future.”

“We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries. The NRA will keep fighting, as we’ve done for 150 years,” said LaPierre.

The fighting in New York will indeed continue, as the state’s Democratic Attorney General Letitia James also said that she will continue pushing for the NRA’s dissolution through ongoing litigation in the state.

“Today’s order reaffirms that the NRA does not get to dictate if and where it will answer for its actions. The rot runs deep, which is why we will now refocus on and continue our case in New York court,” said James.

As the NRA’s battle goes on in New York, the group says that it “can still pursue establishing business operations in Texas, and the organization will continue to explore moving its headquarters there from Virginia.”

According to the organization, more than 400,000 NRA members live in Texas.

The Lone Star State would also offer a much less hostile political environment for the NRA, with Republicans in the state ready to welcome the organization with arms open wide.

Following the dismissal of the bankruptcy, Gov. Greg Abbott tweeted, “Texas stands with the [NRA] and we look forward to working with the Association on their plans to move to Texas.”

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Daniel Friend

Daniel Friend is a reporter for The Texan. He participated in a Great Books program at Azusa Pacific University and graduated in 2019 with a degree in Political Science. He has studied C.S. Lewis’s science fiction trilogy and in his spare time you might find him writing his own novel partly inspired by the series.