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NRA Fails in Bid to Avoid New York Regulatory Regime by Filing for Bankruptcy and Reorganizing in Texas

  • New York AG Letitia James obtained a ruling from the U.S. Bankruptcy Court, Northern District of Texas, denying the National Rifle Association’s (“NRA”) bankruptcy petition.
  • The court opinion stated that in seeking to reorganize in Texas, the NRA, which was originally registered in New York, did not file its bankruptcy petition in good faith. The court concluded that by filing its petition, the NRA sought to gain an unfair litigation advantage and to avoid New York’s regulatory scheme.
  • As previously reported, AG James sued the NRA and its executives over allegations that the NRA leadership mismanaged and diverted organization funds for the personal gain of its executives and their associates in violation of New York’s Estates, Powers & Trusts Laws; Not-for-Profit Corporation Law; Prudent Management of Institutional Funds Act; and Executive Law.