In an unexpected statement late last week, the NRA announced that it was filing for Chapter 11 bankruptcy and that the organization would be leaving New York and reincorporating in Texas.

According to the press release, the reincorporation in Texas comes after what the organization has described as a "corrupt political and regulatory environment” in New York. Their press release goes on to explain that the move will allow the NRA to continue meeting the needs of its members without being subject to limitations imposed by New York. The statement reads in part, “The move will enable long-term, sustainable growth and ensure the NRA’s continued success as the nation’s leading advocate for constitutional freedom.”

New York Attorney General Seeks to “Dissolve" the NRA

As part of the reincorporating in Texas, the NRA has filed Chapter 11 bankruptcy in the state of New York. The move to file for bankruptcy comes only months after New York Attorney General Letitia James announced a lawsuit against the organization. Wayne LaPierre, CEO and Executive VP of the NRA, describes the attacks brought on by Democratic Attorney General James to be politically driven.

James argues otherwise in her lawsuit that was filed in August of last year. The lawsuit is targeted at NRA executives including LaPierre, accusing them of misappropriating funds in order to fund a lavish lifestyle of private jets and organization-paid vacations. This misappropriation of funds is a direct violation of nonprofit organization guidelines. In the lawsuit, James explains,

“For nearly three decades, Wayne LaPierre has served as the chief executive officer of the NRA and has exploited the organization for his financial benefit, and the benefit of a close circle of NRA staff, board members, and vendors. Contrary to his statutory duties of care, loyalty and obedience to the mission of the charity, LaPierre has undertaken a series of actions to consolidate his position; to exploit that position for his personal benefit and that of his family; to continue, by use of a secret "poison pill contract," his employment even after removal and ensuring NRA income for life; and to intimidate, punish, and expel anyone at a senior level who raised concerns about his conduct. The effect has been to divert millions of dollars away from the charitable mission, imposing substantial reductions in its expenditures for core program services, including gun safety, education, training, member services, and public affairs.”

The NRA vehemently denies these accusations and instead deems New York's actions against the organization as a way to exercise power fueled by a Democratic agenda. In a press release shared by the NRA, counsel William A. Brewer III, explains, “Under this plan, the Association wisely seeks protection from New York officials who it believes have illegally weaponized their powers against the NRA and its members.” Brewer adds, “The NRA will continue the fight to protect the interests of its members in New York – and all forums where the NRA is unlawfully singled out for its Second Amendment advocacy.”

While this isn't the first time the NRA has graced headlines for controversial behavior, the NRA's denial of misappropriation of funds comes after reports by CNN indicate that the organization became aware of a “significant diversion” of its funds in 2019. Once it became aware of this, LaPierre paid back roughly $300,000 with interest to cover those expenses, many of which were personal.

The End of the NRA?

The move to declare Chapter 11 bankruptcy would allow the company to restructure its management and put a pause on any pending lawsuits. While James aims to dissolve the organization entirely because of its alleged misdealings, the NRA claims that the organization is in its “strongest financial position” and that reorganizing will allow them to better “streamline costs and expenses.” Because of its continued stronghold in membership and support from different government organizations, it's unlikely that the NRA will be going anywhere anytime soon.

LaPierre sees the move to Texas, home to nearly half a million NRA members, as a “path forward.” LaPierre explains that “an important part of this plan is ‘dumping New York.’”

James responded to the organization's comments about bankruptcy and relocation with the following statement on Twitter, "The NRA’s claimed financial status has finally met its moral status: bankrupt. While we review its bankruptcy filing, we will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”