(Reuters) – The National Rifle Association filed for bankruptcy on Friday, a sudden event that could help the arms rights advocacy group escape a lawsuit by the New York attorney general seeking its dissolution.
The NRA filed for Chapter 11 protection in the federal bankruptcy court in Dallas and said it plans to reincorporate in Texas to escape “a corrupt political and regulatory environment” in New York, where it is now incorporated.
“Texas values NRA contributions, celebrates our law-abiding members and joins us as a partner in the defense of constitutional freedom,” said Chief Executive Wayne LaPierre in a letter to members. “We seek protection from New York officials who illegally abused and used the powers they exercise against the NRA and its members as a weapon.”
The NRA was sued in August by New York Attorney General Letitia James, who accused LaPierre and other senior leaders of self-control and mismanagement, and said the group’s activities violated state laws governing nonprofits.
James said NRA employees had diverted millions of dollars to finance lavish lifestyles, including vacations and private jets, and to buy the silence and loyalty of former employees, costing the group $ 64 million in three years.
“The alleged financial situation of the NRA has finally reached its moral status: bankruptcy,” James said in a statement on Friday. “We will not allow the NRA to use this or any other tactic to escape the responsibility and oversight of my office.”
In its own statement, the NRA did not promise immediate changes in its operations or workforce and said it was not insolvent, with LaPierre adding that it was “financially as strong as we have been in recent years”.
The group said it will continue to defend its members’ constitutional rights under the Second Amendment, which guarantees the right to keep and bear arms.
Critics say the NRA is a facilitator of armed violence.
In his lawsuit, James said that incorporating the NRA as a non-profit organization in New York gave it the authority to pursue its dissolution. The NRA filed a lawsuit in the federal court in Albany, New York, accusing it of violating its freedom of expression rights because it did not like its policy.
The NRA accused James, a Democrat, of seeking a “corporate death sentence” in a partisan effort to achieve a “career goal”.
Sixteen Republican Attorney Generals filed a petition supporting the NRA case.
Friday’s decision is likely to put the New York suit on hold, and a reincorporation in Texas could take James out of his power to dissolve the group.
Reporting by Jan Wolfe and Jonathan Stempel; Editing by Rosalba O’Brien and Jonathan Oatis