National Rifle Association files for bankruptcy after NY legal trouble

Washington: America's powerful gun advocacy group the National Rifle Association on Friday (Saturday AEDT) filed petitions with a US bankruptcy court seeking protection from creditors by restructuring.

The NRA filed the Chapter 11 petitions, which allow a business to stay alive while reorganising, in Bankruptcy Court in Dallas, the association said in a news release.

The NRA said it would restructure as a Texas nonprofit to exit what it said was a "a corrupt political and regulatory environment in New York" state, where it is currently registered.

National Rifle Association CEO Wayne LaPierre intends to incorporate the organisation to Texas. Credit: AP

The influential group said in a statement there would be no immediate changes to its operations or workforce, and that it "will continue with the forward advancement of the enterprise – confronting anti-Second Amendment activities, promoting firearm safety and training, and advancing public programs across the United States".

The Second Amendment of the US Constitution guarantees the right to keep and bear arms.

Last August, New York state Attorney General Letitia James sued to dissolve the NRA, alleging senior leaders of the nonprofit group diverted millions of dollars for personal use and to buy the silence and loyalty of former employees.

The lawsuit filed by James in a state court in Manhattan alleges NRA leaders paid for family trips to the Bahamas, private jets and expensive meals that contributed to a $64 million reduction in the NRA’s balance sheet in three years, turning a surplus into a deficit.

The NRA responded by suing James, a Democrat, in federal court, saying she had violated the NRA’s right to free speech and seeking to block her investigation. The litigation remains pending.

The NRA accused James, a Democrat, of seeking a "corporate death sentence" in a partisan push to fulfil a "career goal."

Sixteen Republican attorneys general filed a brief supporting the NRA's case.

This recent move will likely put the New York lawsuit on hold, and a reincorporation in Texas could strip James of her power to dissolve the group.

"The NRA's claimed financial status has finally met its moral status: bankrupt," James said in a statement on Friday. "We will not allow the NRA to use this or any other tactic to evade accountability and my office's oversight."

President Donald Trump had previously encouraged the NRA to move to Texas.

“The NRA should move to Texas and lead a very good and beautiful life,” Trump said at the White House after news of the New York attorney general’s investigation last year. “Texas would be a great place and an appropriate place for the NRA. ... They’ve been absolutely decimated by the cost of that lawsuit, and it’s very sad.”

Texas Governor Greg Abbott jumped on welcoming the gun rights organisation to the Lone Star State with open arms.

“Welcome to Texas - a state that safeguards the 2nd Amendment,” he said in a tweet.

Reuters, Dallas Morning News