(Reuters) – The National Rifle Association filed for bankruptcy on Friday, a sudden development that could help the gun rights group escape a New York attorney general lawsuit seeking dissolution.
The NRA has filed for Chapter 11 protection in federal bankruptcy court in Dallas, saying it plans to re-record in Texas to escape “a corrupt political and regulatory environment” in New York, where it is now incorporated .
“Texas appreciates the contributions of the NRA, celebrates our law-abiding members and joins us as a partner in upholding constitutional freedom,” Chief Executive Wayne LaPierre said in a letter to members. “We are seeking protection from New York officials who have illegally abused and armed 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 for nonprofits.
James said NRA officials spent millions of dollars funding luxury lifestyles, including vacations and private jets, and buying the silence and loyalty of former employees, costing the group $ 64 million in three years.
“The NRA’s claimed financial status 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 circumvent my office’s accountability and oversight.”
In its own statement, the NRA promised no immediate changes to its operations or workforce and said it was not insolvent, adding that LaPierre was “financially as strong as we’ve been in years.”
The group said it would continue to defend the constitutional rights of its members under the Second Amendment, which guarantees the right to keep and bear arms.
Critics say the NRA is a force for gun violence.
In her lawsuit, James said that establishing the NRA as a New York nonprofit gave her the power to seek disbandment. The NRA filed a lawsuit in federal court in Albany, New York, accusing her of violating her rights to free speech because she disliked her politics.
The NRA accused James, a Democrat, of seeking a “corporate death sentence” in partisan push to achieve a “career goal”.
Sixteen Republican Attorneys General filed a letter in support of the NRA’s case.
Friday’s move will likely put the New York lawsuit on hold, and a Texas reintegration could rob James of her power to disband the group.
Reporting by Jan Wolfe and Jonathan Stempel; Edited by Rosalba O’Brien and Jonathan Oatis