The National Rifle Association’s bankruptcy in Texas may throw a wrench into New York attorney general Letitia James’s (D.) push to shut down the group and seize its assets. William Brewer, the NRA’s leading outside counsel, said a federal bankruptcy judge will have the final say over what happens to the Second Amendment group’s assets. James is pursuing a case in state court to dissolve the NRA and reallocate its assets to other nonprofits over accusations of financial impropriety. James will now have to take an extra step in federal court to achieve her goal, according to Brewer. “In order to dissolve the association, the NRA believes that James would have to seek that relief from the bankruptcy court,” Brewer told the Washington Free Beacon.
James successfully blocked a recent attempt by the NRA to move the case from a Manhattan court to one in Albany. James’s office declined to comment on the looming bankruptcy. It directed the Free Beacon to a statement in which the attorney general said, “The NRA does not get to dictate if and where they will answer for their actions.” Brewer disputed James’s assertion, saying the NRA is confident it would win on the merits in a New York court and there would be no attempt “to try to stop that case or move it out of New York courts.” Brewer said the NRA is solvent and using bankruptcy primarily to reorganize itself—with the same leadership and program offerings—in a state where officials are less likely to target the group for its political beliefs. The success or failure of the NRA’s legal strategy will determine what the leading Second Amendment advocacy group looks like in the future—or if it even exists at all. Experts said bankruptcy protections may complicate the issue for James, but successfully blocking her in the long term could prove difficult. Sidney Scheinberg, a bankruptcy lawyer in Texas, said the move was “highly unusual” but also “clever.” Texas has strong bankruptcy protections and a more favorable political atmosphere than New York, making it an optimal destination for the NRA, according to Scheinberg. “It’s an aggressive move,” Scheinberg said. “It may or may not work. If anything, I think they will get a more balanced playing field here in Texas.” [full article]