NRA Bankruptcy Dismissed

Just a few minutes ago, Judge Harlin Hale issued his decision in the NRA bankruptcy case. In what can only be considered a blow for the NRA, he dismissed the case.

He said:

The question the Court is faced with is whether the existential threat facing the NRA is the
type of threat that the Bankruptcy Code is meant to protect against. The Court believes it is not.
For the reasons stated herein, the Court finds there is cause to dismiss this bankruptcy case as not
having been filed in good faith both because it was filed to gain an unfair litigation advantage and
because it was filed to avoid a state regulatory scheme. The Court further finds the appointment
of a trustee or examiner would, at this time, not be in the best interests of creditors and the estate.

I will say I expected him to take the middle ground of either an examiner with enhanced powers or a trustee.

More later after I have had time to read the full decision.

SIG Sues Springfield For Patent Infringement

SIG Sauer announced that they filed a patent infringement lawsuit against Springfield Armory yesterday. They allege that the magazines for the Springfield Hellcat infringe upon the patented design of the SIG P365 magazine.

From the complaint filed by SIG, it appears that this controversy has been brewing since December 2019. That was when SIG says they notified Springfield of a violation of one of their two patents on the magazines.

The complaint refers to the magazines in question as the “Accused Products”:

The Accused Products directly, jointly, indirectly, and/or willfully infringe one or more claims in the following SIG SAUER Patents: U.S. Patent Nos. 10,480,880 (“the’880 patent”) and 10, 962,315 (“the’315 patent”) (collectively, the “Asserted Patents”). Springfield Armory markets the Accused Products as being competitive to SIG SAUER’s P365 pistol magazines (the “P365 magazines”).

The case is filed in the US District Court for the Central District of Illinois, Rockford Division. SIG is seeking a declaration of patent infringement, a permanent injunction, and appropriate monetary damages.

Ron Cohen, President and CEO of SIG Sauer, Inc., had this to say:

“When the SIG SAUER P365 was introduced it took the market by storm as the most innovative high-capacity, micro-compact pistol to be introduced due to its magazine capacity, and quickly became one of the top selling handguns in the market due to this unprecedented innovation.  SIG is not a litigious company, but given the extent of infringement by Springfield, SIG has a responsibility to protect both our intellectual property and the significant investment we make to develop our innovative products.  As a company we are proud to yield more than 100 patents worldwide, with more than 40 patent applications currently pending, and we will protect the extensive research and design that goes into developing these patents rigorously.”

It will be interesting to see how this all shakes out. I don’t have a dog in this fight as I don’t own either of these handguns.

No Decision Yet In NRA Bankruptcy Case

Judge Harlin Hale has not rendered a decision yet in the NRA’s Chapter 11 bankruptcy case.

Every hour or so today I would check the Federal court’s online website called Pacer to see if anything new related to the case had been filed. The only filing today was by an attorney who wanted to be admitted before the court.

I will keep a watch going tomorrow and every day afterwards until a decision is released.

In the meantime, the blog NRA In Danger has three new posts that are worth reading. The first deals with Wayne, the second with the Board, and the third with the timing of the debacle. I don’t know who is writing that blog but their observations are spot-on.

On Wayne:

From the first, LaPierre was in far over his head. He was educated in politics and made his living in lobbying. He had zero training and experience in lobbying, and now he the supreme leader of what became a $350 million a year corporation. It was as if you took a not-particularly-bright private and gave him command of a brigade. “What do I do now?”

La Pierre’s handlers, the real power. He reacted by relying on “handlers” and hoping they knew how to handle things. They made all his decisions. In theory the board elected LaPierre EVP, in fact they elected his handlers, Angus McQueen and later Bill Brewer. He became a figurehead while they dictated his decisions.

On the Board:

For most, it is the highest achievement of their life, their greatest boast, and so it is something to be protected at all cost.

Both of these observations perfectly correlate with what I’ve been told by former directors and other insiders. I don’t know what Judge Hale is going to rule but I really hope that he doesn’t accept the reorganization plan as it now stands nor does he leave Wayne in charge minus an overseer.

The End Of An Era

If you grew up in a certain era and had your hair cut at a barber shop, there were always a pile of old Field & Stream magazines to read while you waited.

It featured writers like Warren Page talking about rifles, Bob Brister about shotgunning, and A. J. McClane on fishing. It would have humorous essay by Ed Zern with his Exit Laughing column. It had Tap’s Tips from H. G. Tapply which had all sorts of useful tips and tricks. And could you have ever come across an outdoor writer with a better name than Ted Trueblood? Even now they have David Petzel and Phillip Bourjilly as shooting editors.

I received an email dated April 27th from Colin Kearns who is the current editor. He announced that they were going to a 100% digital format along with their sister publication Outdoor Life.

 I also shared that I wasn’t entirely sure what the next phase of Field & Stream’s legacy—the beginning of the next 125 years, if you will—would look like. 

Well, now I do. And I’m excited to share this news with you: Field & Stream is going to be a digital magazine. 

You might be wondering: What does a “digital magazine” mean? Great question. For starters, instead of having issues delivered to your mailbox, they’ll conveniently come to where you already consume so much F&S content every day—to your phone, tablet, or computer. A digital edition also lends itself to a sleeker and more interactive design than a print magazine ever could, opening the door to video, audio, animation, and other dynamic add-ons that will enhance your experience with the magazine. 

At the risk of sounding like a “But wait, there’s more!” infomercial spokesman—there is, in fact, more.

With your digital subscription to Field & Stream, you’ll get access to the F&S archives where you can enjoy many of the best and most famous stories from the history of the magazine. All F&S subscribers will also get a bonus subscription to the all-new digital edition of Outdoor Life magazine. 

It also appears that instead of being a monthly magazine, the publishing format will be that of a quarterly. I guess that leaves Sports Afield of the old big three “hook and bullet” magazines that will still be published in a print edition. Even then, Sports Afield closed and then was reopened by Field Sports Publishing who also owns Safari Press. It is strictly a big-game hunting magazine now.

I know bytes, bits, and pixels are a lot cheaper to produce than laying out a paper magazine. Still, there is a feeling you get from actually holding something printed on paper you just don’t get from a digital edition. I guess at my age nostalgia is an ever present condition.

What Does NC Have That SC Doesn’t?

Well, other than higher mountains, more people, and more area, you mean?

North Carolina has open carry as a constitutional right thanks to the NC Supreme Court’s 1922 decision in State v. Kerner. South Carolinians have been fighting to get open carry as a constitutional right.

It looks like thanks to the SC State Senate that their fight will continue on even longer. An amendment to the bill that would allow open carry with a permit was defeated yesterday 25-21.

From the AP:

Several Republican leaders in the Senate weren’t ready to go as far as open carry without a permit.

“I think training and background checks are important,” said Senate Majority Leader Shane Massey, a Republican from Edgefield.

Senators expected to debate well into Wednesday night. Once the day is finished, there are four more days left in the General Assembly’s session.

Gun rights groups have made open carry a priority for years and put extra pressure on senators after Republicans won an extra three seats in the 2020 elections.

Opponents of the open carry bill include a number of current law enforcement leaders, including State Law Enforcement Division Chief Mark Keel, and the police chiefs and sheriffs in some of the state’s largest population centers.

South Carolina is one of only five states without some type of open carry law, joining atypical partners such as California, Florida, Illinois and New York.

I feel bad for South Carolinians on this. However, part of me is somewhat amused by it. The amusement comes because South Carolina has always been considered the epitome of gentility unlike us ruffians in “vale of humility” called North Carolina. Old court cases in the 1800s held that only ruffians, scofflaws, and the like carried concealed whereas gentlemen carried their arms openly.

Pistol Purchase Permit Repeal Passes NC House

The North Carolina House of Representatives passed H398 yesterday which repeals the state’s Jim Crow-era pistol purchase permit. The repeal passed on a vote of 69-48 with three absences. The bill had the support of the NC Sheriffs’ Association.

Grass Roots North Carolina which has fought for the repeal for years released this statement:

By a vote of 69-48, today the NC House passed H. 398 to repeal our Jim Crow-era pistol purchase permit system. Having passed one chamber before next week’s crossover deadline, the bill remains alive for action in the Senate. Grass Roots North Carolina has been the main advocate for the bill, having worked for nearly twenty years to repeal the archaic law.

GRNC president Paul Valone said, “Today, the North Carolina General Assembly has taken a step toward abolishing a vestige of the Jim Crow era which is being used by a small number of sheriffs to obstruct citizens from protecting their families, as well as bringing gun purchase background checks into the 21st Century. GRNC would like to thank primary bill sponsor Rep. Jay Adams and Republican leadership. We would also like to thank the North Carolina Sheriffs’ Association for its support.”

Looking at the breakdown of the vote, you had two Democrats and 67 Republicans voting for passage while 47 Democrats and one Republican opposed passage. The Democrats supporting passage of the bill were Rep. Shelly Willingham (D-Martin/Edgecombe), an African-American, and Rep. Michael Wray (D-Halifax/Northampton). The lone Republican who opposed the repeal was Rep. Dudley Greene (R-Avery/McDowell/Mitchell) who had previously served as sheriff of McDowell County.

My own representative, Rep. Brian Turner (D-Buncombe), is more concerned about allowing you to walk around downtown Asheville with a drink in your hands than about repealing a bill that was meant to discriminate against blacks. As The Animals sang in 1965, we gotta get out of this place!

If you live in North Carolina, go here to see if your representative thinks you still should be living under a law that was intended to curtail the rights of African-Americans or not.

Closing Arguments In NRA Case

All sides had their chance to make their closing arguments yesterday in the NRA’s bankruptcy case. The morning session was devoted to the NY Attorney General, the US Trustee, and a few others with the afternoon being primarily the NRA along with short rebuttal statements from the NY Attorney General’s team, AckMac, and Judge Journey’s attorney.

The blog NRA IN Danger does a good job summarizing the arguments from the morning and the afternoon so I won’t go into much detail.

I listened in to parts of both the morning and the afternoon arguments. The most surprising came from Lisa Lambert who is the Assistant US Trustee. Her job is to represent the process and preserve the integrity of bankruptcy.

From what I saw and heard yesterday morning, she was on fire. I wish I had video to be able to post but that is not available nor would it be permitted.

Danny Hakim of the New York Times devoted an entire column to her argument.

The National Rifle Association’s hopes of end-running a legal challenge in New York were dealt a serious blow on Monday when a Justice Department official rebuked its leadership and called for the dismissal of its bankruptcy filing or the appointment of an outside monitor to oversee its finances.

Lisa L. Lambert, a lawyer in the United States Trustee’s office, which is part of the Justice Department, said the “evidentiary record clearly and convincingly establishes” that Wayne LaPierre, the longtime N.R.A. chief executive, “has failed to provide the proper oversight.” For a number of years, she added, “the record is unrefuted that Wayne LaPierre’s personal expenses were made to look like business expenses.”

She said that if an Examiner is appointed that they must have a budget much higher than the $350,000 proposed by Judge Phillip Journey and that they have power over spending.

Her comments flustered Greg Garman who is one of the bankruptcy attorneys representing the NRA according to Hakim. I don’t know whether it is because she didn’t mince words or because it is rare to have the US Trustee fire a broadside. Professor Adam Levitin of Georgetown Law said he thought the NRA was in real trouble if the US Trustee gets involved as she did. Professor John Pottow of the University of Michigan Law School echoed his comments noting it was very rare.

While Mr. Garman asserted the transgressions of the NRA were relatively minor and that it “had righted its ship” obviating the need for outside oversight, Ms. Lambert, the Assistant US Trustee, disagreed as she laid out episodes of corruption by LaPierre and others in the NRA.

Regarding the charter flights, she said: “LaPierre says these are for security, but the evidence says he picked up family. The evidence says that extra stops were not to be noted in the booking records. And the testimony is unrefuted that no N.R.A. policy authorizes charter plane flights.”

Mr. LaPierre’s close aide, Millie Hallow, even diverted $40,000 for her son’s wedding, Ms. Lambert noted, but beyond repaying that amount after she was caught, she “otherwise has suffered no additional consequences.”

Mr. Garman said throughout the trial that there was a “line of demarcation” in 2018, when the N.R.A. undertook a self-audit and corrective measures. But Ms. Lambert said the evidence presented in the 12-day trial showed that “even after the self-described course correction the irregularities were not fixed,” noting that, among other things, Craig Spray, the former chief financial officer, refused to sign the N.R.A.’s 2019 tax filings.

“The N.R.A. has stated that it is seeking refuge from the New York attorney general’s actions and wishes to change its state of incorporation,” she added. “That can be done outside of bankruptcy. It is not a legitimate reason for filing bankruptcy. ”

Judge Hale ended the hearing by thanking the attorneys on all sides for keeping it relatively civil and noted this was one of the longest trials in his career as a bankruptcy judge. He also jokingly said that this trial was not the reason he plans to retire next year as he had already announced those plans before being assigned this case.

Judge Hale ended by saying a written ruling on the case would be out by next week.

UPDATE: For more perspective on the closing arguments, please read Stephen Gutowski’s report in The Reload on the final day.

UPDATE II: Frank Tait has his impressions of the final day of the bankruptcy hearing here. I missed that part of the arguments about a contract with Marion “The Enemy Within” Hammer running to 2030 but I think any sane person would be appalled by it.

My own feeling is that the best outcome would be an Examiner with an ample budget and powers to make a difference. As Jeff Knox has said to me repeatedly, his fear of a Trustee is that he or she could decide to put the NRA into Chapter 7 liquidation.

What pisses me off more than anything is that just when we need a powerful NRA the most, it is distracted from its task of defending gun rights due to the corruption of Wayne and his cronies. It is beyond frustrating that the Board of Directors cares more about not offending Wayne and preserving the statue quo than about doing what it should be doing to clean house. I feel like invoking Godwin’s law to compare the Board to those Wehrmacht generals who supported Hitler even when they knew he was insane but I won’t. I’ll just say that not doing their job has put the NRA and its members in the position we are in today.

Smith & Wesson Selling Thompson/Center Arms

It looks like Smith & Wesson is planning to divest their Thompson/Center Arms subsidiary. According to the press release below, it will allow them to shift production capacity to the S&W line where sales are booming. Their last financial report issued in March said that sales were up 102% over the same quarter a year ago.

They say the company will remain committed to both hunting and long-range shooting. That said, I don’t see anything in the existing Smith & Wesson product mix other than big boomer revolvers that is really hunting-related. The only long-distance rifle is a T/C bolt action on a chassis.

They did not announce a buyer for the company but merely said they plan to divest it. Looking at potential buyers, I think Savage Arms might be the most likely candidate. They would probably ditch the T/C bolt rifles as they compete with their own but could add the Contender and Encore lines. I really don’t see RemArms as being able to buy them and I don’t see Ruger being that interested now that they have Marlin.

SPRINGFIELD, Mass., May 3, 2021 /PRNewswire/ — Smith & Wesson Brands, Inc. (NASDAQ Global Select Market: SWBI), a leader in firearm manufacturing and design, today announced that it plans to divest its Thompson/Center Arms brand. This decision is part of the Company’s broader strategic plan that will focus on its core Smith & Wesson brands.

Mark P. Smith, President and CEO of Smith & Wesson Brands, Inc., said, “Thompson/Center is a beloved hunting brand with a longstanding heritage, and we are committed to ensuring a smooth transition. Thompson/Center Arms’ loyal consumers should rest assured that they will continue to receive the world-class firearms, accessories, and customer service support that the brand has been known for since its founding in 1965.  We remain fully committed to the hunting and long-range shooting market, and with this divestiture we will be able to now focus on these categories under our iconic Smith & Wesson brand.  Additionally, this will allow us to immediately redirect manufacturing capacity to increase overall production volumes, allowing us to gain additional market share while simultaneously increasing profitability.”

At this time, a buyer for the Thompson/Center Arms brand has not been identified; however, the divestiture is not expected to have a material financial impact on the Company’s first quarter fiscal year 2022 results and the Company expects the divestiture to be accretive to the Company’s full year fiscal 2022 through higher overall production levels, increased margins, and lower marketing costs. The Company states that this decision will not result in a workforce reduction as its flexible manufacturing model allows it to repurpose capacity immediately to other areas without a headcount reduction.

If you want to buy them, they say to call them at 413-747-3448.

NRA Reorganization Plan

The attorneys for the National Rifle Association filed this reorganization plan with the US Bankruptcy Court for the Northern District of Texas on Sunday. I assume that it was approved by the NRA Board on Saturday. I say assumed as no word has come out of those meetings on whether it was passed, what the vote was, or anything else.

I have listened to some of the closing arguments in the case today. I missed the NY Attorney General’s closing argument but I have read that they pushed for dismissal. I did parts of the arguments of the attorney for Judge Phillip Journey and other board members as well as that by Lisa Lambert who is the US Trustee. Both argued for the appointment of an examiner with special powers. Ms. Lambert was especially forceful that the examiner have the power and the money needed to do the job. They both argued against the Chief Restructuring Officer.

I have only briefly scanned through the reorganization plan. However, from what I’ve seen it just moves the NRA to Texas, leaves the existing board in place, and says members now will be members in the Reorganized NRA.

If you do have the time to read through this and see something, please add you observations in the comments.

NRA Reorganization Plan by jpr9954 on Scribd

Vote On H398 Is Wednesday

It finally looks like the North Carolina pistol purchase permit will be on its way out. A vote in the NC House is scheduled for Wednesday, May 5th.

Of course, I fully expect Gov. Roy Cooper (D-NC) to veto H398 if it passes the North Carolina General Assembly. An override will depend upon whether Democrats want to defend a racist, Jim Crow-era law that has been shown still to discriminate against African-Americans.

As Grass Roots North Carolina says in the alert, now is the time to put on and keep up the pressure.

Call your own representative, Democrat or Republican, and demand they pass this bill. If you don’t know who your representative is, use this tool.

Email every House Republican. Their email addresses are in the alert. You may need to copy the email addresses into your word processor and convert the “;” into a “,” depending upon your email program. I’d also suggest pasting them in as a BCC. Two minutes of copy and paste is all it takes. I just did it.

If you are not on the Grass Roots North Carolina email alert list, you need to be! Go here to sign up.