Courtroom (file photo) Photograph:( AFP )
Judge Harlin Hale said in a written order that he was dismissing the case because he found the bankruptcy was not filed in good faith
A federal judge dismissed the National Rifle Association's bankruptcy case on Tuesday, leaving the powerful gun-rights group to face a New York state lawsuit that accuses it of financial abuses and aims to put it out of business.
The judge was tasked with deciding whether the NRA should be allowed to incorporate in Texas instead of New York, where the state is suing in an effort to disband the group. Though headquartered in Virginia, the NRA was chartered as a non-profit in New York in 1871 and is incorporated in the state.
Judge Harlin Hale said in a written order that he was dismissing the case because he found the bankruptcy was not filed in good faith.
"The Court believes the NRA's purpose in filing bankruptcy is less like a traditional bankruptcy case in which a debtor is faced with financial difficulties or a judgment that it cannot satisfy and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme," Hale wrote.
His decision followed 11 days of testimony and arguments. Lawyers for New York and the NRA's former advertising agency grilled the group's embattled top executive, Wayne LaPierre, who acknowledged putting the NRA into Chapter 11 bankruptcy without the knowledge or assent of most of its board and other top officers.
"Excluding so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer, and the general counsel, is nothing less than shocking," the judge added.
Phillip Journey, an NRA board member and Kansas judge, who had sought to have an examiner appointed to investigate the group's leadership, was concise about Hale's judgment: “1 word, disappointed," he wrote in a text message.
LaPierre pledged in a statement to continue to fight for gun rights.
“Although we are disappointed in some aspects of the decision, there is no change in the overall direction of our Association, its programmes, or its Second Amendment advocacy," LaPierre said via the NRA's Twitter account. "Today is ultimately about our members, those who stand courageously with the NRA in defence of constitutional freedom. We remain an independent organisation that can chart its own course, even as we remain in New York to confront our adversaries."
Lawyers for New York Attorney General Letitia James argued that the case was an attempt by NRA leadership to escape accountability for using the group's coffers as their personal piggybank. But the NRA's attorneys said it was a legitimate effort to avoid a political attack by James, who is a Democrat.