DALLAS (AP) — A federal judge dismissed the National Rifle Association’s bankruptcy case, leaving the powerful gun-rights group to face a New York state lawsuit that accuses it of financial abuses and aims to put it out of business.
The judge was tasked with deciding whether the NRA should be allowed to incorporate in Texas instead of New York, where the state is suing in an effort to disband the group. Though headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and is incorporated in the state.
Judge Harlin Hale said in a written order that he was dismissing the case because he found the bankruptcy was not filed in good faith.
“The Court believes the NRA’s purpose in filing bankruptcy is less like a traditional bankruptcy case in which a debtor is faced with financial difficulties or a judgment that it cannot satisfy and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme,” Hale wrote.
The NRA declared bankruptcy in January, five months after New York Attorney General Letitia James’ office sued seeking its dissolution following allegations that executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts and other questionable expenditures.