May 05, 2021

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NY state deems NRA bankruptcy a ‘sideshow,’ NRA defends itself in trial closing

May 3, 2021 | , ,

 

By Maria Chutchian

(Reuters) -A lawyer for New York Attorney General Letitia James called the National Rifle Association’s bankruptcy bid “a circus sideshow” during closing arguments on Monday in a case over whether to allow the NRA to reorganize in the gun-friendly state of Texas.

The NRA filed for Chapter 11 in January, saying it planned to use the bankruptcy process to exit what it has called a corrupt political and regulatory environment in New York, where is it currently incorporated.

It is attempting to fend off a lawsuit to dismiss the Chapter 11 case by James and the group’s former ad agency, Ackerman McQueen.

Gerrit Pronske, a lawyer for James, told the court on Monday that the NRA’s bankruptcy was “a circus sideshow.” James has said the NRA’s bankruptcy and plan to reincorporate in Texas after 150 years is an effort to escape regulatory oversight in New York.

NRA lawyer Greg Garman countered in his closing argument that the group had filed the bankruptcy petition in good faith.

“We are a debtor who is here to reorganize,” Garman said.

The case before U.S. Bankruptcy Judge Harlin Hale in Dallas coincides with the United States reeling from another spate of mass shootings, with President Joe Biden calling for a ban on assault weapons and tighter gun control measures. The gun rights advocacy group has been influential in its opposition to such legislation in the U.S. Congress.

The trial began on April 5 and Hale is expected to issue a ruling in about a week.

James, a Democrat, sued the NRA and Chief Executive Wayne LaPierre in New York state court in August, accusing it of financial misconduct and aiming to dissolve the organization.

She said the NRA had diverted millions of dollars to fund luxurious trips for officials, no-show contracts for associates, and other questionable expenses.

LaPierre has testified that he sought bankruptcy protection out of fear that James would try to place it into receivership.

The NRA has accused James of “weaponizing” her powers to pursue a “blatant and malicious retaliation campaign” against the group because she dislikes what it stands for.

A lawyer for the NRA’s former ad agency Ackerman on Monday attacked LaPierre’s leadership, calling him a “dictator” and arguing that the bankruptcy amounted to a “fraud on the court.”

The lawyer, Brian Mason, said LaPierre violated the NRA’s own bylaws when he put the organization into Chapter 11 without first obtaining board approval. LaPierre has rejected claims of wrongdoing and argued he had authority to file for Chapter 11.

The NRA’s Garman said on Monday that the New York attorney general and Ackerman had failed to back up claims of “pervasive” misconduct.

“We are safe, we are secure, we are a well-run organization,” Garman said.

Garman also pushed back against criticisms of LaPierre, saying he has been leading the organization’s effort to ensure compliance with laws governing non-profits and charities.

(Reporting by Maria Chutchian;Editing by Noeleen Walder and Grant McCool)

 

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