A US federal judge has ruled the National Rifle Association cannot use a bankruptcy case to relocate to gun-friendly Texas from New York, where it is currently facing a lawsuit.
The ruling by Judge Harlin Hale in Dallas on Tuesday dealt a serious blow to the NRA’s effort to use the laws to evade New York officials seeking to dissolve it.
Hale said the NRA did not file for Chapter 11 in “good faith,” but did so to avoid oversight by New York Attorney General Letitia James and gain an “unfair litigation advantage” over her.
“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,” Hale wrote in the decision.
“The Court finds there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme,” Hale added.
James lodged a suit against the NRA in August to shut it down, accusing longtime Chief Executive Wayne LaPierre and other senior leaders of self-dealing and mismanagement.
Following the ruling, James said in a tweet, "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."
"We sued the NRA to put an end to its fraud and abuse, and now we will continue our work to hold the organization accountable."
LaPierre said in a statement that his organization will not stop fighting and that it will “remain in New York to confront our adversaries.”
“The NRA remains committed to its members and our plan for the future,” he added.
The organization filed for bankruptcy in January to reincorporate in Republican-dominated Texas and escape what it called “a corrupt political” environment in New York.
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