The NRA’s Chapter 11 filing in January is a “sign of bankruptcy filed in bad faith” and the court should reject it to “prevent bankruptcy from becoming a haven for criminals,” Gerrit Pronske, attorney general of New York, Letitia James, argued.
US bankruptcy judge Harlin Hale holds Dallas trial over whether to dismiss the NRA case, appoint a trustee to lead the group while it is bankrupt, or appoint an examiner to examine corruption allegations and James’ mismanagement in his senior ranks.
New York says filing for bankruptcy is illegitimate for a number of reasons.
They include filing for an advantage in a separate fraud lawsuit brought against the NRA in New York, a lack of financial hardship to justify a Chapter 11 case, an offer to find a favorable venue, and an internal process in which the NRA leadership violated its own governance. demands, “intentionally deceiving” its board of directors by keeping it in the dark about its intention to file for bankruptcy.
‘DUMPING’ New York
The NRA has never hidden its desire to come out of bankruptcy without its 150-year-old New York home and with a new charter in Texas, Pronske told the court.
The day he filed for reorganization, he posted a letter on his website announcing that he was “DUMPING” the state. As further evidence, Pronske noted that the NRA set up a partnership called Sea Girt LLC as part of its reincorporation efforts in Texas, which he compared to “Decoy Duck LLC.”
He directed some of his harshest comments to Wayne LaPierre, the longtime NRA boss, saying he accepted lavish trips from an NRA vendor without properly disclosing them and retaliated against anyone s ‘opposed it.
This included Craig Spray, then CFO, whose efforts to implement financial controls were overruled by a “Wayne Says” rule, according to Pronske.
Brian Mason, an attorney for the former NRA advertising agency Ackerman McQueen Inc., also argued for the case to be dismissed.
Mason argued that there is an “overwhelming amount of evidence” that the NRA is financially sound, including that it had $ 72 million in cash on hand.
“It is an undisputed fact that the financial condition of the NRA has nothing to do with filing this bankruptcy,” Mason said.
Mason told the court that the bankruptcy was filed fraudulently, without the approval of the full committee, as required by the NRA statutes. He said the board amended LaPierre’s employment contract in early January, just before the filing, in an ambiguous way that allowed him to deceive him and claim he had the authority to initiate proceedings.
He said LaPierre testified that the board should have understood the meaning of his employment contract, which gave him that power.
L’affaire est la National Rifle Association of America, 21-bk-30085, US Bankruptcy Court, Northern District of Texas (Dallas).