The National Rifle Association possibly put itself into an no-win situation with its bankruptcy filing, which could lead to its dissolution if a Texas judge grants its application or a criminal trial for its top executives if the application is denied, ABC News reports.
The organization’s fate sits in the hands of Judge Harlin Hale of the U.S. Bankruptcy Court for the Northern District of Texas who will decide whether to grant the NRA’s bankruptcy petition. His decision is not a certainty: the NRA’s bankruptcy claim is undermined by statements by the organization that it remains financially viable.
Also complicating the filing: statements by NRA Executive Vice President Wayne LaPierre that the NRA intends to reorganize in Texas and flee the “toxic political environment of New York,” even though the organization’s headquarters are in Virginia.
Hale could deny the Chapter 11 petition, meaning that the NRA would still fall under the laws of the State of New York and the jurisdiction of New York Attorney General Letitia James, who is investigating fraud and abuse undertaken by the supposedly non-profit organizations, including paying for lavish vacations and perks for LaPierre, as well as questionable spending by its other executives and board members.
But Hale denying the motion has significant and, some legal experts say, more dangerous risks for the group and its leaders. If the NRA does get its bankruptcy filing approved, Hale could order it put into receivership and assign a court-designated trustee to oversee the group’s operations and finances.
Hale could also assign a trustee to investigate the claims of fraud and financial mismanagement before allowing the organization to re-charter itself in another jurisdiction. Or a trustee could order the organization to be liquidated and dissolved after examining the group’s finances–either because of financial insolvency or because of corruption.
It’s unlikely the NRA wants an outside authority reviewing its internal operating structure and its fundraising arm. Nor would someone like LaPierre take kindly to reporting to someone.
“What is it possibly thinking with the bankruptcy filing? If there’s a clear strategy, I cannot deduce it,” Adam Levitin, a bankruptcy professor at the Georgetown University Law Center wrote on a bankruptcy blog. “Maybe I’m missing something and the NRA is crazy like a fox, but it really looks like a move done out of desperation.”