wayne LAPIERRE nra
National Rifle Associaiton Executive Vice President Wayne LaPierre (AP Photo/Ron Edmonds)

The hearing into the bankruptcy filing by the National Rifle Association concluded yesterday. The NRA filed for Chapter 11 protection in January in a Texas Fifth Circuit court. Why would a New York-chartered organization that’s headquartered in Virginia file for reorganization in a Texas court? That’s a large part of the matter that Judge Harlin Hale will be ruling on as soon as next week.

When the NRA filed in January, it claimed in an announcement that it is “not insolvent” and even that the Association is “as financially strong as we have been in years.”

Why, then, file for bankruptcy protection? The NRA made no bones about that. They were trying to escape the lawsuits filed against the Association and some of its officers by New York Attorney General Letitia James. The New York AG, who called the NRA a terrorist organization, has been clear that her intent is to destroy the NRA.

From the NRA’s announcement . . .

We are leaving the state of an attorney general who, just a few months ago, vowed to put us out of business through an abuse of legal and regulatory power. …

Under this plan, we seek protection from New York officials who illegally abused and weaponized the powers they wield against the NRA and its members. You can be assured the Association will continue the fight to protect your interests in New York – and all forums where the NRA is unlawfully singled out for its Second Amendment advocacy.

In short, in LaPierre’s letter to members regarding the bankruptcy filing, he claimed both financial solvency and an intent to dodge the pending litigation. Did anyone in the NRA’s PR department run a draft past its (extremely well-paid) attorneys?

nra national rifle association logo
Courtesy NRA

As Georgetown Law Professor Adam Levitin noted at the time . . .

Every circuit including the 5th) has a good faith filing doctrine. The doctrine in a nutshell is that if a bankruptcy case does not have a “valid reorganizational purpose,” it should be dismissed “for cause.” Attempting to evade liability in litigation is not a “valid reorganizational purpose,” and the NRA’s press release seemed to me a version of the press release in SGL Carbon, the leading 3rd Circuit good faith filing doctrine case. In SGL Carbon, the debtor foolishly said that it was filing for bankruptcy just to stiff a competitor that had an antitrust suit against it and assured its other creditors that they would be paid in full. That sounds an awful lot like “dumping New York” while saying that all valid claims will be paid in full. (My students might recall me cautioning them that a debtor’s attorneys should insist that they get to sign off on all press releases and communications related to the bankruptcy for just this reason…) Now, the NRA isn’t looking to avoid paying NY. Instead, it is looking to escape NY’s jurisdiction. But that seems a distinction without a difference. It isn’t hoping to use bankruptcy to reorganize its finances, but to get out of the lion cage.  

Because of the NRA’s own loose lips, not to mention questions surrounding the rationale for the venue where the case was filed, and using the case as part of its strategy to move its charter from New York to Texas, the case has all kinds of legitimate questions surrounding it. Read Levitin’s full write-up about those here.

The New York Attorney General, naturally, sought to have the case dismissed, hence the hearing that concluded yesterday, during which eye-popping spending, misappropriated funds and gross financial mismanagement were revealed under oath.

Then, however, in a rare move during closing arguments, the United States Trustee, part of the Department of Justice, called on the court to either dismiss the case entirely or appoint an outside monitor to oversee the NRA’s finances.

NRA National Rifle Association convention LaPierre
Dan Z. for TTAG

From the New York Times . . .

Lisa L. Lambert, a lawyer in the United States Trustee’s office, which is part of the Justice Department, said the “evidentiary record clearly and convincingly establishes” that Wayne LaPierre, the longtime N.R.A. chief executive, “has failed to provide the proper oversight.” For a number of years, she added, “the record is unrefuted that Wayne LaPierre’s personal expenses were made to look like business expenses.” …

Ms. Lambert, [cited] episodes of alleged corruption by Mr. LaPierre and other N.R.A. officials, a number of which were not disputed during the trial. She cited spending by the N.R.A. or its contractors on tailored Zegna suits for Mr. LaPierre, meals at a fancy Tuscan restaurant in Northern Virginia, and charter flights for him and his family, as well as a plan that was drawn up to buy a multimillion-dollar house for the use of Mr. LaPierre and his wife that was ultimately abandoned.

Regarding the charter flights, she said: “LaPierre says these are for security, but the evidence says he picked up family. The evidence says that extra stops were not to be noted in the booking records. And the testimony is unrefuted that no N.R.A. policy authorizes charter plane flights.”

Experts see this as a very bad sign for the NRA’s case.

Bankruptcy experts said the U.S. Trustee’s move was a rare one.

“The N.R.A. is in real trouble,” said Adam J. Levitin, a professor specializing in bankruptcy at Georgetown University. “The U.S. Trustee rarely gets involved in this sort of motion, much less urges dismissal, a trustee or an examiner. I cannot see an outcome where the N.R.A. comes out unscathed. I think the real issue is what remedy the judge grants.”

In other words, the NRA’s case — and possibly even its management — is in serious jeopardy here. One of the closing arguments yesterday was presented by a group of dissident NRA board members who favor the appointment of an examiner to perform a full independent audit of the Association. It’s hard to even imagine what that might turn up.

Whatever Judge Hale decides, it’s increasingly looking like it won’t be what LaPierre and the brain trust that helped him devise this Hail Mary strategy had it mind. And they’ll have no one to blame but themselves.

27 COMMENTS

  1. I keep getting emails from LaPierre asking for money. I dump these missives directly into the trash.

    • “We’re in the strongest financial shape ever!” goes together convincingly with “We need your money!” about as well as it does “We’re bankrupt and need to reorganize.”

      For this sort of brilliance Wayne and his corrupt buddies earn those lavish salaries and perks???

    • ” I dump these {NRA} missives directly into the trash.”

      That’s wasteful. If you live in a cold climate, use them as fireplace kindling for a cold day or mulch ’em for the veggie garden… 😉

    • Very good write-up, Dan. It’s interesting to see Wayne’s World collapsing, though so infuriating for the suckers who sent them hundreds of millions of dollars over the years. (And, incredibly, seem to STILL be donating!)

  2. i can see it on the proxy now. “the board of trustees recommends against the following:
    appointment of an external monitor. (for, against)”
    i feel a certain way about this.

  3. This is a **very** big deal. (I practiced commercial bankruptcy law pretty extensively in the late ’80’s-90’s before my IP practice took off, and I still keep my hand in.)

    For the UST to weigh in like this is VERY unusual, and I strongly suspect it will carry a lot of weight with the judge.

    Unfortunately, rather than risk having an outside monitor who could get to the bottom of what is happening in Wayne’s World, I instead suspect he’ll orchestrate an Emily Litella response (i.e., “oh the bankruptcy . . .never mind”).

  4. I don’t know enough to know what options the judge has, but the entire management structure needs to be dumped with no golden parachutes for anyone and at least 50 board members need to be cut. I fear he will wash his hands of the entire thing and drop NRA into the shredder that is NY.

    • “…the entire management structure needs to be dumped with no golden parachutes for anyone and at least 50 board members need to be cut.”

      Has anyone generated the names and addresses of each of board members? That needs to be published somewhere so the members can ‘advise’ the board the steps they need to take for the good of the NRA…

  5. This is what happens when you select a crony attorney. Brewer isn’t a top bankruptcy attorney, and his lame-brained scheme to create a company to be indebted to isn’t going to turn out as planned. I hope it leads to the truth coming out and WLP and cronies getting kicked out or put in jail. Then the NRA can return to its purpose of education and protecting gun rights.

    • Is anyone else worried about the implications on gun ranges that were given improvement grants by the NRA…. the way I understand, the ranges use their land titles as a surety bond for the grants with lien rights to the NRA. Anyone here on range boards have any idea how the dumpster fire that Wayne started will affect those entities?

      • “the ranges use their land titles as a surety bond for the grants with lien rights to the NRA“

        Oh man, no way. That would be a real can of worms.

        And really, if you guys didn’t get the corruption of the NRA when the executive leadership took the all expenses paid trip to Moscow in 2015 as a guests of Vlad Putin, you ain’t never going to get it.

        And putting Oliver “sell millions of dollars of modern weapons to the ayatollah Khomeini” North in as CEO was just the icing on the treason cake.

        • “…just the icing on the treason cake.”

          *Snort*

          The true treason is the current occupant of 1600 Pennsylvania Ave, Washington, D.C….

  6. Mr. LaPierre is a douche bag. I will no longer support the NRA until a formal apology is given to the many members for his actions abused under his direction. Transparency to the board should have been his first step prior to even thinking about the indulgences he took.

  7. I love this! I hope Wayne is forced to stay on under the supervision of an outside DOJ monitor to scrutinize/overrule his every move and make his life completely miserable. He is an absolute scumbag, and his ouster is not fitting punishment… he needs to be miserable.

    • Also, Wayne LaPayMe! cannot hit the broad side of an elephant at ten feet. Who hasn’t seen that leaked video he tried to keep secret? The safari guide walks up to the elephant, points to the exact spot to shoot it, and Wayne misses. He shoots several times and misses. The guide tells him he has to get down on the ground to hit the right spot at the right angle, but Wayne can’t get it done. He was younger then, it was 2013.

      Wayne LaPayMe! does great in custom designer suits, private jets, fancy restaurants and compromising with anti-gunners.

      Not so good at hitting an elephant at ten feet tho. I mean, that’s just sooooooo hard!!!!

  8. Interestingly, if the costs and expenses are actually deemed to be Mr. LaPierre’s personal expenses, he’s going to have one helluva sudden-onset tax problem.

    But if they are and he doesn’t want that kind of a problem, he could try to reimburse the NRA for those and make it square again. Just sayin’ it might work, can’t say for sure.

  9. I don’t begin to understand it all. I do believe that there needs to be some major changes made in how the NRA’s been doing business. If solicited funds have been used inappropriately, then those responsible for the misuse need to be removed from their leadership positions. So if a full investigation and audit is required, then do it.
    I’m a Patron Life member. It took me years and no small amount of sacrifice financially to achieve that level, but I’ve stopped donating for close to a decade now, because something’s and someone’s are rotten in the Leadership. It’s not just LaPierre, there’s a bushelful of questions present and past leadership needs to answer for. A big one is: ” How in the hell did you let these shenanigans go on?”

  10. I’m as sick of WLP as I ever was of Shannon (ugly shoes) Watts and David Hogg. I could do just fine never seeing SW or DH ever again. Of course there are others like…. Dianne Feinstein who I could also do fine not ever seeing but I imagine that kinda goes for everyone who frequents TTAGs. I know collectively and figuratively that we all feel nauseous when we see her. I’m all done with the NRA until WLP is GONE. Kick rocks Wayne, you’re finished.

  11. The trouble is, that to get rid of Pepe LePew, outside hostile actors (I’m talking about you, DOJ), will have their opportunity to gut the NRA. Not seeing a good outcome here even if Pepe gets the jail term he deserves for embezzlement.

  12. We need a class action law suit to liquidate his suits and mansions and fund the goa and the 2nd amendment foundation!

  13. I want to support the NRA again, it’s a fantastic organization but until LaPierre is tossed without his golden parachute I just can’t do it.

    Let’s just get plain silly for a minute and assume that LaPierre wasn’t a POS living lavish off the funds intended for battling for our rights. Here in crazy land we’re going to pretend he’s the bastion of our rights fight and simply lives to do the right thing (which is pretty much how he describes himself as it pertains to the NRA). In this alternate universe he’s as great as he says….so, being fully aware of the controversy, if he has nothing but the best interest of the NRA in mind, why the hell hasn’t he stepped down? If he’s in it for all the best reasons as he claims and knowing everyone thinks he’s a piece of garbage and they are no longer supporting the NRA because of that very reason, then why hasn’t he stepped down? It would certainly be the best thing for the NRA but he doesn’t because he’s a piece of sh!t grifting weasel who’s only there to make himself wealthier and live lavish off the donations of people who can barely pay their own bills.

    • Go find a better Second Amendment organization. The NRA has compromised on gun control, first in the 1930s and through the critical 1960s all the way to Clinton’s “assault weapon” ban. Of course, you won’t find this history on their website. In fact, you won’t find much of a history and that speaks volumes. The sooner the NRA is out of business, the better no-compromise groups will be funded and never surrender.

  14. My Boy pal makes $ 75 seventy five/hour at the internet. She has been without a assignment for six months however remaining month her pay have become $16453 genuinely working at the internet for some hours. immediately from the source.
    HERE☛ w-o-r-k-s-4-3.c-o-m-Z
    please don’t copy”Z , – ­” In Url Thanks

LEAVE A REPLY

Please enter your comment!
Please enter your name here