The NRA filed for Chapter 11 bankruptcy in the Dallas federal court and said it planned to incorporate in Texas, where records show it formed a limited liability company, Sea Girt LLC, in November 2020. Sea Girt LLC placed an order separate bankruptcy on Friday, listing less than $ 100,000 in liabilities.
In its action, the NRA said its longtime leader, Executive Vice President Wayne LaPierre, made the decision to file for bankruptcy protection in consultation with a “special litigation committee” made up of three NRA employees who were formed in September to oversee its legal strategies. The NRA board voted on January 7 to clarify LaPierre’s employment contract, giving it the power to “reorganize or restructure the organization’s business”.
“The change will allow for long-term sustainable growth and ensure the continued success of the NRA as a key advocate of constitutional freedom – free from the toxic political environment of New York,” the NRA said in a statement.
A message asking for comments was left with a Dallas attorney who filed for bankruptcy on behalf of NRA and Sea Girt LLC.
Shortly after the announcement, New York Attorney General Letitia James said she would not allow the NRA to “escape responsibility” or oversight. His office’s lawsuit last year highlighted claims of lost spending and self-control that have troubled the NRA and LaPierre in recent years – from hair and makeup for his wife to a $ 17 million post-employment contract for himself.
“The alleged financial situation of the NRA has finally reached its moral status: bankruptcy,” said James.
The arms rights group has about 5 million members. Although based in Virginia, the NRA was licensed as a non-profit organization in New York in 1871 and is incorporated in the state. Going forward, the NRA said that a committee will study opportunities to reallocate segments of its operations to Texas and elsewhere.
The NRA’s biggest creditor, which owed $ 1.2 million, is Ackerman McQueen, the group’s former advertising agency that was behind the now closed NRA service. The NRA sued the Oklahoma-based company in 2019, claiming it was being overbilled and said in Friday’s bankruptcy filing that the debt that is due is disputed. The process is pending. A message asking for comments was left with Ackerman McQueen.
In the New York lawsuit, Ackerman McQueen was accused of helping to overspend LaPierre and other NRA executives by paying the bill and sending an account to the organization for “direct expenses”.
“No financial lawsuit can ever hide the moral bankruptcy of Wayne LaPierre and his wife and dogs on the NRA board,” said Bill Powers, spokesman for Ackerman McQueen and former NRA director of public relations.
Court records also show more than $ 960,000 owed to Membership Marketing Partners LLC, a company that lists its headquarters at the same address as the NRA. Another $ 200,000 is due to Speedway Motorsports, the North Carolina-based company that owns and operates NASCAR tracks, according to the records.
Texas Republican Governor Greg Abbott quickly received the news, tweeting, “Welcome to Texas – a state that safeguards the Second Amendment.” The NRA said it has more than 400,000 members in Texas and plans to hold its annual convention in Houston later this year.