The National Rifle Association (NRA) of America filed for bankruptcy and plans to exit the State of New York, where it was founded in 1871.
The NRA stated that it is leaving New York because of its “corrupt political and regulatory environment.”
The country’s largest and most influential gun rights advocacy group said it will restructure itself as a nonprofit in the State of Texas where it has more than 400 members. This year, the NRA Annual Meeting will be held in Houston.
NRA is confident that the move will enable it to achieve “long-term sustainable growth” and a leading gun-rights advocacy group” without the toxic political environment of New York.”
Additionally, the gun rights advocacy group and one of its subsidiaries filed for Chapter 11 bankruptcy to carry out its restructuring plan.
Legal battles between New York and the NRA
In August last year, New York State Attorney General Letitia James filed a lawsuit to dissolve the NRA.
The state’s top law enforcement official alleged that the gun rights advocacy group under the direction of its top executives engaged in widespread violations of New York laws including those governing the organization’s charitable status.
The gun-right advocacy group filed a countersuit alleging that Attorney General James was hindering its First Amendment rights.
In 2018, the New York State Department of Financial Services investigated the NRA for allegedly violating the state’s insurance law. The DFS ordered the insurer of the gun rights advocacy group to stop selling the “Carry Guard” policy and to pay a $7 million penalty.
The NRA sued Gov. Andrew Cuomo and the DFS for allegedly “seeking to deprive” it and its members of their “First Amendment rights to speak freely about gun-related issues and defend the Second Amendment.”
In addition, the NRA accused the DFS of coercing financial institutions to cut their business relationships with it.
In February 2020, the gun rights advocacy group settled with the DFS and agreed to pay a penalty of $2.5 million.
Under the settlement, the NRA is “banned from marketing insurance in the State or receiving compensation in connection with any newly issued New York insurance policies for five years, irrespective of whether the NRA obtains a license.”
NRA bankruptcy filing and restructuring is a “path forward”
The gun-rights advocacy organization said filing for bankruptcy, abandoning New York, and restructuring in Texas is the path forward to pursue its opportunities, achieve growth, and continue its work of addressing anti-Second Amendment activities and promoting firearm safety and training.
In a statement, NRA CEO & EVP Wayne LaPierre said, “This strategic plan represents a pathway to opportunity, growth, and progress. Obviously, an important part of this plan is ‘dumping New York.’ The NRA is pursuing reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and will join us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.”
The NRA appointed Marchall Smith as Chief Restructuring Officer. Smith was a former Senior Vice President and General Counsel of 3M Company.
The gun-rights organization said it will continue its legal actions against Gov. Cuomo, Attorney General James, and the DFS. It claimed that they are attempting to “blacklist” the group and its financial partners, a violation of their First Amendment rights.
William A. Brewell III, the counsel for the gun-rights advocacy group said, “Under this plan, the Association wisely seeks protection from New York officials who it believes have illegally weaponized their powers against the NRA and its members.”
Reaction from Attorney General James
In response to the NRA’s plan, Attorney General James commented, “The NRA’s claimed financial status has finally met its moral status: bankrupt. While we review this filing, we will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”
The NRA said it is currently in its “strongest financial condition in years. It will propose a restructuring plan that “provides for payment in full of all valid creditors’ claims.” It expects to maintain its commitments to employees, vendors, members, and other community stakeholders.
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