Last Friday, the National Rifle Association announced its plans to file for Chapter 11 bankruptcy protection and reincorporate in Texas. Laypeople, myself included, looked with some degree of skepticism on the plan. While I am not a lawyer, a law professor at Georgetown University has written a story outlining a long list of daunting hurdles the NRA now faces.
Adam Levitin wrote a mini-dissertation at Credit Slips Blog outlining the obstacles to Wayne LaPierre and crew pulling off their grand strategy. Here are the opening paragraphs from Professor Adam Levitin at Credit Slips:
The National Rifle Association filed for bankruptcy in the Northern District of Texas (Dallas). The NRA’s press release says that the purpose of the bankruptcy is to enable the NRA to change from being a New York corporation to a Texas corporation. This is critical to the NRA because the NY Attorney General, who regulates NY non-profits, is seeking to have the NRA dissolved for financial malfeasance. Notably, the NRA states that it “will propose a plan that provides for payment in full of all valid creditors’ claims. The Association expects to uphold commitments to employees, vendors, members, and other community stakeholders.” In other words, the NRA’s petition is not driven by financial exigencies, but to avoid the reach of the New York Attorney General. As the press release boasts, the NRA is “dumping New York.”
This is going to be one heck of an interesting case. There are already so many glaring issues (or should I say “targets”?): venue, good faith filing, disclosures, the automatic stay the trustee question, fiduciary duties to pursue claims against insiders, executory employment contracts, the fate of Wayne LaPierre, and the generally overlooked governance provisions of the Bankruptcy Code. I’ll take quick aim at these all below.
Any one of these areas could easily derail the NRA’s plans as outlined at their NRAForward.org website. Read the whole thing for a more complete picture.
The nation’s oldest civil rights org isn’t the only one with liabilities and difficulties to surmount under this plan. The NRA’s very persistent leader Wayne LaPierre has a basket full of his own liabilities, too. Here are a couple of issues affecting LaPierre’s continued well-compensated employment…or any employment in the world of non-profits.
Executory contracts. The NRA will have to decide whether to assume or reject any on-going (“executory”) contracts, and court approval is required either way. That means, among other things, submitting those contracts to the court. Among those executory contracts is Mr. LaPierre’s employment contract, which the NY AG alleges includes a “a secret “poison pill contract,” his employment even after removal and ensuring NRA income for life“. It’s hard to see how the court can approve assumption of such a contract. If it’s rejected, remember that the Bankruptcy Code caps employment termination claims at one year of salary and there’s still a duty of mitigation.
The fate of Wayne LaPierre. Putting aside Mr. LaPierre’s employment contract, he’s got another problem. The NY AG suit isn’t just against the NRA. It’s also against Mr. LaPierre and some of his lieutenants. LaPierre and his lieutenants have not filed for bankruptcy, and even if the NRA is able to convert to a Texas corporation, the NYAG’s suit against Mr. LaPierre can still proceed. The NYAG is seeking restitution from LaPierre as well as a bar from his ever soliciting funds for a nonprofit in NY (not just for a NY nonprofit). Moreover, if NY is successful, it might well create problems for LaPierre serving as an officer of a nonprofit in another state. All of which is to say that the NRA fleeing to Texas doesn’t address Mr. LaPierre’s problems.
No doubt the NRA hopes to have things more or less completed prior to this year’s fall meeting and convention in September. It will be held in Houston at the George Brown Convention Center. The organization gains a huge amount of funding at the annual meetings and convention.
However, reading Professor Levitin’s piece should make all of us wonder if this move by the NRA may be doomed from the start.
If “this move by the NRA may be doomed from the start”, the legal firm representing NRA in bankruptcy may never be able to recover its reputation.
We have here a law professor declaring that the legal hurdles at hand are near insurmountable, yet the “pros” in the field (the bankruptcy firm) deciding they have a good chance to prevail. If they are wrong, and a university professor turns out to be smarter…..
Ordinarily I’d back anyone who is actually in the industry against an academic for valid expertise…but the NRA (or maybe just Wayne) has shown an uncanny ability to find incompetent moneygrubbers to execute its shoddy plans, so I’m going to assume this gambit will fail.
This is not “all up to WLP”… Run znd hide or continue to try to pile on, I’m not going to budge. I’ve seen NRA declared “dead” so many times since 1971 it has about as much weight as Republicans being constantly dubbed as racists and Nazis.
One thing is certain, however- GOA, NAGR, and all of the other little 2A groups would’ve been out of existence 25 years ago were NRA not there to take the heat- all of it. And all the while maintaining its various marksmanship, training, safety, competition, women’s, kid’s and other programs in which those “no-compromise” wannabes above have never even dreamed of having to participate.
“If they are wrong, and a university professor turns out to be smarter…”
You know what they say: Those who *can*, teach. Or wait…
“You know what they say: Those who *can*, teach. Or wait…”
Understand. However….
There were a number of circumstances where not only I “could”, but also taught. The rubric has its accurate application at times, but without deep diving investigation into the trial experience of the professor, the point was that should it turn out the prof is correct, the reputation of the law firm would be trashed because, “Even a law professor knew better.”
The majority of law professors are also partners or of counsel at prestigious law firms, you insufferable buffoon.
the NRA is looking for a Texas enema!…..
“the NRA is looking fora Texas enema!…..”
Lived in Coahuila y Tejas a long time; not familiar with the procedure.
The fully sovereign state of Texas should offer the NRA and all members/officers complete legal immunity from any and all civil and criminal procedures originating in New York State or New York City.
Next comes secession from the federal union and the formation of a Red Republic.
Nope. Texas doesn’t need to surrender, we need to keep leading.
You “leading” lost us the House, the Senate, the White House and the Supreme Court. And, the next 100 million of imported illegal aliens will insure that Republican will never have control again.
Please excuse me if I have zero faith in your “leading.”
It is far past time for the Conservative States of America.
OK we’ve heard the NRA bashing from some who have little if any skin in the game. The NRA is more than a room full of people. There are millions of others to consider and as it stands the NRA cannot continue their obligation to its members and remain in NY. In the long run the NRA will be good for Texas and its members. I do not see anyone having standing to block the move or dissolve the NRA. There are no grounds to deny a Chapter 11. In fact get ready for more bankruptcies with the scumbag biden running the show.
“…as it stands the NRA cannot continue their obligation to its members and remain in NY.”
Truth hurts, and there is a reason why. NRA’s sole obligation to its “members” (who are actually merely subscribers) is to cash donation and “membership” checks into NRA accounts.
To be sorta fair (because I am a “sorta” kind of human), NRA, like many a corporation and politician, followed mission creep away from their core competency, becoming good at not much. NRA should drop all notions of being a civil rights group, a defender of constitutionally protected human, civil and natural rights, and return to being a firearm marksmanship advocacy and training organization.
Your argument doesn’t match reality. This year, Texas went more Republican and more conservative than ever before. And that was primarily due to Hispanics voting Republican. Zapata county, which is about 85% hispanic, voted for Trump. Republicans who won their races won by wider margins, and Republicans that lost their races lost by narrower margins. House and Senate districts that had not voted for a republican in a century went Republican over the last couple of years. Texas is the model for success for the Republican party.
I get it, you’re a quitter and willing to surrender and you want other people to wallow in your own pity. Stop trying to pull people down with you. Get to work.
“NRA, like many a corporation and politician, followed mission creep away from their core competency, becoming good at not much.”
So, to be a bit fair (human) myself- will you please state NRA’s “mission” for the rest of us, especially those of us who are actually members?
“So, to be a bit fair (human) myself- will you please state NRA’s “mission” for the rest of us, especially those of us who are actually members?”
Yes, marksmanship, not political lobbying. Not being a civil rights coalition. Not being the champion of the Second Amendment. The original mission was to produce a standby supply of future soldiers who could shoot effectively.
Secession wouldn’t be “surrender.” The Founders weren’t surrendering to Britain when they seceded from the empire
“Secession wouldn’t be “surrender.” ”
Secession, like most phantasy comic books, is fun to read about, talk about, dream about, but….
You gotta look at the whole picture. Start with a map of the Confederate States of America. Notice anything in particular? Anything that just pops off the paper?
The CSA was made of of contiguous states (ok, not 100%, but very close). Being contiguous was a huge advantage over being spread out. How difficult would it have been to strangle the confederacy in its infancy if each seceded state was separated by a union state, or two? The contiguous nature of the confederacy was why the Mississippi campaign was so important to union victory (although the campaigns in the east are the most famous). Charleston was blockaded, and New Orleans neutralized. Although the confederacy controlled cotton the union depended upon, and much of the agriculture, contiguous transportation was a benefit, and eventually an Achilles Heel.
Today’s confederates are imagining transportationally separated states will somehow stand on their own, and be able to mount successful military campaigns in isolation. As it is said: amateurs study battles; professionals study logistics. The so-called flyover states are not all politically aligned/committed to the idea of re-establishing the republic of the founders.
(This is in reply to Sam I Am)
https://www.270towin.com/
Looks fairly solid to me. Only reason Georgia isn’t red is due to the political machine in Atlanta. I don’t see any red states landlocked by blue states or vice versa.
And that is assuming a war would follow secession. The Left may be vindictive but I don’t think a Democratic administration would have the political support, will, or cajones to play Lincoln and send in troops.
“The Left may be vindictive but I don’t think a Democratic administration would have the political support, will, or cajones to play Lincoln and send in troops.”
25,000 troops deployed to protect the Capitol. More military than were available to defend the place during the second revolution/civil war. 80,000,000 voters vs. 74,000,000 voters is all the political will that is needed.
There is no constitutional means/process for a state to “legally” separate from the union, so no way for the current government to permit separation. The leftists will not peacefully give up control over the resources of states pursuing secession. The second revolution was sponsored/directed/controlled/initiated by political leaders in the major cities of “the South”, it was not a “people’s revolution”.
Look at the so-called red states and take note of the political power of the major cities. The leftists in control of the major cities in many red states are not going to attempt to find a way, even a peaceful way, to separate from the union. That power base will require forceful overthrow.
What you read about how the red states are ready for revolution is not indicative of a rebellion fomenting and raging, but the loud minority, out of power, and raging on sympathetic social media.
A modern separation cannot be done piecemeal. The entire infrastructure of life has to be planned and coordinated, down to the smallest detail before separation can be initiated. Don’t fall prey to the idea that a handful of independent, uncoordinated state separations can somehow sorta exist on their own while waiting on others to follow.
No, they shouldn’t.
The NRA, under WLP, is an albatross and needs to die a quick painful death. Especially for those involved, i.e WLP, catlady, and the entire BoD.
A ridiculous statement. There is no organization that could possibly fill the vacuum left should NRA just suddenly disappear… Erich Pratt, Dudley Brown, Jeff Knox- who? I know it makes you feel good to have “your say” but it’s fantasy at best, delusional at worst.
That simply cannot happen. Pursuant to the full faith and credit provision of the Constitution, Texas courts are bound to recognize the rulings of out of state courts.
Prediction:
1) Getting approval to reorganize in Texas will be easy,
2) Wayne and his cronies will be stuck litigating in New York. Hopefully for Wayne, the NRA bought good Directors and Officers Liability insurance that covers this mess. Indeed, this may be a ploy to trigger so called “A-side” limits.
3) Some creditors will push to have a trustee appointed by the court. If granted, he/she will remove Wayne.
What an incredible opportunity for the NRA to change into a modern, relevant organization with a broad reach to experienced and new gun owners alike.
If only they’ll seize it.
The NRA could start by simply giving NY what they justifiably want and fittingly deserve- Wayne LaPierre.
And it would be most appropriate for them to hand Wayne over Deputy Carlyle style…
https://www.youtube.com/watch?v=TG2VkpvyRgc
This move gives the NRA an opportunity to allow Wayne not to resign, but to retire. Given the big geographic change and culture change between New York and Texas, passing the torch to someone more tuned in to the region and retiring makes sense.
“This move gives the NRA an opportunity to allow Wayne not to resign, but to retire.”
As I understand it, WLP has a support structure of ‘enablers’ in the organization that allowed him to pull that bullshit for as long as he did. There will have to be an extensive house-cleaning of upper-management and a re-structuring to keep what just happened from happening again…
True !.
“This move gives the NRA an opportunity to allow Wayne not to resign, but to retire.”
Let’s see now, he’s 72, almost 73 and this is the 150th Anniversary… You think this won’t happen, and soon? So- next question, and a very valid one for anyone interested in NRA and 2A rights:
Who should replace WLP?
Over his tenure and for most of the past 20 years he’s been responsible to raise approxiately $1.4M every day to fund the political side and what has come to be expected, even (and especially) by those who hate NRA. WLP’s retirement is going to happen, and soon, but abyone who thinks (and I know JWT doesn’t) any loud-mouthed, chest-beating wonk can just waltz in and move things forward, or even maintain, has never tried to run anything more than a lemonade stand.
Have you been drinking your breakfast again ;)? That nasty witch don’t give a flying rats tail about WLP. She wants the NRA, your guns and the 2nd Amd.
When I was 16 I told my mom all I wanted was a 1969 Boss 302 Mustang”.
She said “it’s good to want things.”
“When I was 16 I told my mom all I wanted was a 1969 Boss 302 Mustang”.”
Go talk to Les Baer…
+1
Can they be like General George Washington? And just walk away from the power after the war revolutionary ended?
I really don’t know if the NRA has that kind of leadership on the entire board?
I am afraid they will end up more like general George Custer then general George Washington.
Their reputation is so soiled that it may be too late to salvage it no matter what good intentions they might attempt for a “remake”.
Well if the NRA can’t fight city hall how the hell can they fight the U.S. gubment.
The problem with the law prof in the article is that he appears to simply be wrong about the strategy. The NRA lawyers have stated they are not seeking an injunctive stay to halt the lawsuit.
I am guessing the move and bankruptcy are to protect them should they lose the lawsuit.
I find it unlikely that should the courts dissolve the NRA in NY state , they would not allow the assets purchased with donations to be transferred to a new anti gun control group. But should they not the bankruptcy may be to facilitate that.
The NRA is trying to get the state lawsuit into a different federal court. That was rejected by a state judge , but a federal judge may eventually hear the case and rule differently.
The danger is that the assets could go to a “gun safety” group, like MDA or Gifford.
Best guess is Wayne La Pew Pew has Effed up and it maybe so complete that he’s is Forked and the Org. along with him, couldn’t have happened to a more deserving @zz wipe.
The biggest hurdle the NRA faces is getting rid of WLP and his Yes-Men.
WLP, YOU COST TRUMP THE ELECTION,YOU RUINED THE NRA , I HOPE THE SUITS WERE WORTH IT, YOUR NOT!!!!
VERY GOD COMMENTS , THANKS YA ALL
PROs N CONs OF NRA DEAL
As long as the lawsuit brought by NY gets rid of Wayne, his posse, and the current board, with absolutely no further payouts to any of them, it’s a great thing,IMHO. To be honest, if the allegations of Wayno
dipping into the general funds for improper or unsanctioned use are found to be true, I hope they make him pay 100% full restitution plus interest.
The people getting hurt by this are all those that teach the various safety courses etc. For their sake, I’m hoping a new from the ground up NRA can emerge. One that truly fights for our God given rights. One that actually puts the funds donated to proper use. Until such a time starts, this former life member shall not return, nor donate a penny.
Oh and whoever asked why would a law firm take a case that doesn’t seem winnable? LOL, you don’t know much about business or law firms, that’s painfully obvious.
The reorganization under Chapter 11 should include getting rid of the board of directors on up. And moving to Dallas of all places.
All over the gun blogs people are saying they will not contribute to the NRA as long as Wayne Lapierre is the head of the organization.
He is an albatross around the organizations’ neck.
If he would take his ill-gotten gains and retire, the NRA can move to Texas and get back to fighting for gun rights
Well I’m one of them! Get rid of old Wayne and we’ll talk. Otherwise bye felicia…
That I can Agree with !
I will not pay any more dues to the NRA or Wayne La Piere he has robbed the kitty for long enough him and his 30 thousand dollar suits and 5000 bottle of wine not 1 more penny from me and now I read that he has a lifetime pay coming so if he lives to 100 YO he will be robbing the til every day NO THANK YOU I’M DONE and please tell wayne La Theif why
I totally agree with every word you said. Lapierre should be 100% left in the dust with his “nuts” nailed to a stump!
Until Wayne LaPierre and his bunch are removed and left at the curb for garbage pick up the NRA is doomed in general. I’ve always had great respect for the NRA but their “leadership” is killing them from inside. Let’s say LaPierre and his cronies were all completely innocent of any malfeasance and were completely invested in the NRA’s mission. They would voluntarily leave simply because the people have lost faith in them and because the NRA has gone from a strong trusted institution of good to a floundering shell of itself barely keeping its head above water. The right thing to do is to leave and let someone else take over. Of course that won’t happen because LaPierre and crew are living large and lavish off the backs of their members while the ship sinks. These rats won’t jump off until there’s no more good times to be had.
It breaks my heart that the people in charge of the NRA are killing it from inside.
Texas Gov should ban WLP for life from Texas.
The goober gallery has spoken. There is no drama here. The new NRA logo around a single star will be great. God bless Texas, God bless The NRA!!
GOD BLESS TEXAS ! dido !
In the NRAs neck sideways
Get rid of the money sucking NRA and everyone would be Happy.
j@r
Every anti gun squiff in both states are coming out of the woodwork to fight this!
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