(Reuters) – The National Rifle Association filed for bankruptcy on Friday, a sudden development that could help the gun rights group escape a lawsuit by the New York attorney general trying to do the dissolution.
The NRA has filed Chapter 11 protection with the Federal Bankruptcy Court in Dallas, saying it intends to re-record in Texas to escape a corrupt political and regulatory environment in New York, where it has now been recorded.
“Texas appreciates the contributions of the NRA, celebrates our law-abiding members and joins us as a partner in upholding constitutional freedom,” CEO Wayne LaPierre said in a letter to members. “We seek protection from officials in New York who are illegally abusing and exercising the powers they exercise against the NRA and its members.”
The NRA was sued in August by New York Attorney General Letitia James, who accused LaPierre and other senior leaders of self-trafficking and mismanagement, saying the group’s activities violated state laws regarding nonprofits.
James said NRA officials have diverted millions of dollars to fund luxury lifestyles, including vacations and private jets, and to buy the silence and loyalty of former employees, which cost the group $ 64 million over three years.
“The alleged financial status of the NRA has finally reached its moral status: bankruptcy,” James said in a statement Friday. “We will not allow the NRA to use this or any other tactic to evade the liability and oversight of my office.”
In its own statement, the NRA promised no immediate changes to its operations or workforce, saying it was not insolvent, and LaPierre added that it was “as financially strong as in years.”
The group said it would continue to defend its members’ constitutional rights under the Second Amendment, which guarantees the right to hold and carry weapons.
Critics say the NRA is making the gun possible.
In her lawsuit, James said the establishment of the NRA as a non-profit organization in New York gave her the authority to try to do the dissolution. The NRA has filed a lawsuit in federal court in Albany, New York, accusing her of violating her freedom of speech because she dislikes it.
The NRA accuses James, a Democrat, of seeking a ‘corporate death sentence’ in a biased push to achieve a ‘career goal’.
Sixteen Republican attorneys general have filed a motion supporting the NRA’s case.
Friday’s move will likely delay the lawsuit in New York, and a reincorporation in Texas could deprive James of her power to dissolve the group.
Reporting by Jan Wolfe and Jonathan Stempel; Edited by Rosalba O’Brien and Jonathan Oatis