NRA declares bankruptcy, will reincorporate in Texas

The National Rifle Association announced on Friday that it was declaring bankruptcy and move from New York to Texas, where the organization will reincorporate.

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The NRA was chartered in New York state in 1871, but has had most of its employees based in the Washington, D.C., area, The Washington Post reported. The organization, the nation’s most recognized lobbying group, is moving south to avoid ongoing litigation brought against it by New York Attorney General Letitia James, the newspaper reported.

The NRA and a subsidiary filed Chapter 11 petitions in U.S. Bankruptcy Court in Dallas, The New York Times reported. It declared between $100 million and $500 million in assets and the same amount in liabilities. Court records show the NRA formed a limited liability corporation, Sea Girt LLC, in November 2020. Sea Girt LLC made a separate bankruptcy filing Friday, listing fewer than $100,000 in liabilities.

James has been trying to dissolve the organization for violating its nonprofit status.

“The NRA’s claimed financial status has finally met its moral status: bankrupt,” James said in a statement Friday. “While we review this filing, we will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”

Typically, nonprofit groups chartered in New York and under investigation are prohibited from relocating their assets during an inquiry, the Times reported. The NRA’s filing could delay the resolution of the attorney general’s case while the matter is argued in bankruptcy court, the newspaper reported.

The restructuring plan aims to streamline costs and expenses, the NRA said in a statement. The organization laid off dozens of employees last year because of the coronavirus pandemic, according to The Associated Press. The group also canceled its national convention and halted fundraising.

“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,” William A. Brewer III, the NRA’s lead outside lawyer, said in a statement.

The NRA said that Marschall Smith, a former general counsel for 3M Company, would serve as the organization’s chief restructuring officer, the Times reported. The organization said it also formed a committee to examine moving its headquarters out of Fairfax, Virginia.

“This strategic plan represents a pathway to opportunity, growth and progress,” Wayne LaPierre, the NRA’s CEO and executive vice president, said in a statement. “Obviously, an important part of this plan is ‘dumping New York.’ The NRA is pursuing reincorporating in a state that values the contributions of the NRA, celebrates our law-abiding members, and will join us as a partner in upholding constitutional freedom. This is a transformational moment in the history of the NRA.”

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