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A federal judge on Tuesday rejected the National Rifle Association's Chapter 11 bankruptcy filing, forcing the nonprofit to defend itself against the state of New York's lawsuit against the organization – a case that could result in the group's dissolution.
U.S. Bankruptcy Judge Harlin Hale of Dallas ruled that the pro-gun-rights group did not file its bankruptcy petition "in good faith" but instead did so "to gain an unfair litigation advantage" and "to avoid a state regulatory scheme."
Those purposes are not a proper use of the bankruptcy code, the judge ruled.
Judge Hale also said he had concerns about the "manner and secrecy" in which the case was filed. The NRA is facing allegations of corruption, including misuse of member funds to support a lavish lifestyle for leaders, among them CEO Wayne LaPierre.