Crime The ‘Poster Child’ of ‘Bad Faith’ Bankruptcy: NRA Accused of a ‘Fraud on This Court’ by New York Attorney General’s Lawyer as Trial Wraps
Texas judge mulls whether to dismiss NRA's bankruptcy petition
For nearly a month, attorneys have argued over whether the National Rifle Association's petition to file for bankruptcy in Texas should be dismissed, and whether its business dealings should be overseen by a court-appointed trustee or an examiner. © SAUL LOEB/AFP/Getty Images Wayne LaPierre, executive vice president and chief executive officer of the NRA, arrives prior to a speech by President Donald Trump at the National Rifle Association Annual Meeting at Lucas Oil Stadium in Indianapolis, April 26, 2019.
Nearly a month after the National Rifle Association’s trialin Texas, those proceedings have been drawing to a close on Monday with an attorney for the New York attorney general’s office claiming that the filing of the bankruptcy petition involved a fraud upon the court.
“This is as shocking as it is completely dishonest,” attorney Gerrit Pronske, an attorney for the New York Attorney General’s Office, declared on Monday. “It is nothing less than fraud and recklessly, it put the NRA in a horrible position.”
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The NRA filed a federal bankruptcy petition in Texas earlier this year to avoid a lawsuit that New York Attorney General Letitia James (D) filed to shut down the organization for allegedly using the company as a “piggy bank” in violation of charity law. The NRA boasted earlier this year of being “in its strongest financial condition in years,” and it justified the maneuver on the grounds that it was “dumping New York” and “utilizing the protection of the bankruptcy court” in order to organize its “legal and regulatory matters in efficient forum.”
Since the group was founded some 150 years ago in New York, NRA executive vice president and CEO Wayne LaPierre sought a more favorable forum in the Lone Star State by forming a company Sea Girt LLC, which regulators call a “wholly owned shell company” designed to manufacture jurisdiction in Texas.
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“Its formation, your honor, is pure forum shopping,” Pronske said, referring to the limited liability company. “Sea Girt is the poster child of a bankruptcy filed in bad faith.”
Where Pronske alleges the NRA’s petition turned fraudulent is in suggesting that the group’s board agreed to declare bankruptcy.
NRA board member Phil Journey, a Wichita judge who has called for an examiner to oversee the group, called the manner the group obtained approval as a “fraud perpetrated on the court.”
“I agree with this board member’s statement,” Pronske said.
“There is no question that the NRA board was tricked into attempting to delegate authority to file bankruptcy, and that’s not just fraud on the board,” Pronske added. “That’s a fraud on this court.”
A host of former and current top NRA executives testified over the course of the nearly monthlong trial. The group’s formerCraig Spray and general counsel John Frazier both expressed surprise at the bankruptcy filing. But the most high-profile came from LaPierre himself, who testified several days as a witness for the New York Attorney General and separately, for .
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Though LaPierre may have believed the bankruptcy would shield the NRA, the trial has led to a string of embarrassing headlines for the gun group.
On April 7, LaPierre testified about his lavish lifestyle on the dime of the NRA, its donors and its friends, including flying exclusively by private charter jet, which the New York Attorney General contends arose from conflicts of interest.
During his first six-hour stretch of testimony, LaPierre defended receiving nearly $300,000 in Italian suits from a Beverly Hills Zegna, which the group’s longtime public relations Ackerman McQueen bought him for television appearances. LaPierre also claimed that he went on Hollywood producer Stanton McKenzie’s 108-foot yacht, the Illusions, after the Sandy Hook shooting for “security” reasons. The NRA chief wound up taking eight trips to the Bahamas on that yacht.
“These weeklong private trips on yachts are straight out of the ‘Lifestyles of the Rich and Famous,’ and come complete with fuel, food on the yacht, a chef and complete crews,” Pronske said. “In addition to the yacht trips, was a lavish vacation in to Atlantis in the Bahamas, all paid for by Mr. McKenzie.”
Ackerman McQueen lawyer Brian Mason said that the NRA’s premise that it cannot get a fair shake in New York “slandered and libeled” the Empire State.
“It’s all a bunch of political, public relations noise,” Mason added.
As Mason noted, the New York attorney general’s request to shut down the NRA would need to be enforced by a judge and upheld by two levels of appellate courts. Closing arguments remain ongoing.
(Photo by Scott Olson/Getty Images)
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French protesters demand trial for Jewish woman's killer .
PARIS (AP) — Protesters in Paris and other French cities on Sunday denounced a ruling by France’s highest court that the killer of Jewish woman Sarah Halimi was not criminally responsible and therefore could not go on trial. Thousands of people filled Trocadero Plaza in Paris, in front of the Eiffel Tower, answering a call by Jewish associations and groups fighting antisemitism who say that justice has not been done. Other protests took place in Marseille, Lyon, Strasbourg, Bordeaux and elsewhere. The announcement that the killer would not be sent to trial sparked outrage among the French and international Jewish community.