Further, the NRA announced its intention to propose a plan that would pay all creditors’ allowed claims in full.įollowing the petitions, several parties in interest filed motions to dismiss the chapter 11 cases, alleging bad faith, most notably the NYAG, the District of Columbia Attorney General, and Ackerman McQueen, Inc., one of the NRA’s most significant vendors. As explained by the NRA’s filed documents, the chapter 11 filing aimed to (1) streamline and resolve all outstanding claims and litigations to preserve the NRA as a going concern and (2) enable the NRA to emerge from the bankruptcy as a Texas-domiciled non-profit.
![motion to dismiss chapter 11 by debtor motion to dismiss chapter 11 by debtor](https://cdn.uslegal.com/uslegal-preview/US/US-02611BG/1.png)
![motion to dismiss chapter 11 by debtor motion to dismiss chapter 11 by debtor](https://i.ytimg.com/vi/L7hUNzAEiLM/maxresdefault.jpg)
On January 15, 2021, the NRA and its newly formed Texas subsidiary Sea Girt, LLC, jointly filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the Northern District of Texas. The enforcement action also listed certain current and former NRA officers as individual defendants, including its executive vice president Wayne LaPierre, seeking restitution of funds from these individuals. On August 6, 2020, the New York Attorney General (the “NYAG”) filed an enforcement action in New York state court against the National Rifle Association (the “NRA”), alleging the NRA violated various provisions of the New York Not-For-Profit Law and seeking, among other things, the dissolution of the NRA. In re National Rifle Association of America and Sea Girt, LLC, No. Bankruptcy Code, a barrier of entry does stand.
![motion to dismiss chapter 11 by debtor motion to dismiss chapter 11 by debtor](https://cdn.uslegal.com/uslegal-preview/TX/TX-CC-38-05/1.png)
This high-profile case demonstrates that although the bar is not high for an organization to procure protection from creditors under the U.S. The court found that the organization filed bankruptcy to gain an unfair litigation advantage and avoid a state regulatory action brought by the New York Attorney General, which is not a valid bankruptcy purpose. Hale of the United State Bankruptcy Court for the Northern District of Texas, dismissed the chapter 11 cases filed by the National Rifle Association.