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Bankruptcy No Sanctuary Against Government Enforcement Actions: NRA's Chapter 11 Case Dismissed as Bad Faith Filing | Weil, Gotshal & Manges LLP


[co-author: Alex Xiao]
Executive Summary
In May, 2021, Judge Harlin D. Hale of the United State Bankruptcy Court for the Northern District of Texas, dismissed the chapter 11 cases filed by the National Rifle Association. The court found that the organization filed bankruptcy to gain an unfair litigation advantage and avoid a state regulatory action brought by the New York Attorney General, which is not a valid bankruptcy purpose. This high-profile case demonstrates that although the bar is not high for an organization to procure protection from creditors under the U.S. Bankruptcy Code, a barrier of entry does stand.
In re National Rifle Association of America and Sea Girt, LLC, No. 21-30085 (Bankr. N.D. Tex. May 11, 2021). ....

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Governor Gordon Invites NRA to Relocate to Wyoming


Amid allegations of exorbitant, improper spending by its CEO and a failed attempt to file for bankruptcy, the National Rifle Association (NRA) is on the search for a new location for its headquarters, and Wyoming Governor Mark Gordon, along with Secretary of State Ed Buchanan have sent the Virginia-based, purported non-profit organization a letter, inviting them to relocate to Wyoming.
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According to a press release from the Governor s office, the letter highlights Wyoming s business-friendly tax environment, Wyoming s eager workforce, and the population s strong support for Second Amendment rights.
The NRA was founded in 1871 by William Conant Church and George Wood Wingate. It is a 501(c)(4) non-profit organization that, according to a self-report, boasts more than 5 million members. It relies on donations, magazine subscriptions and, according to the Associated Press, has reported total assets of about $203 million. ....

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