The Full NRA Response To Bankruptcy Dismissal

The NRA has put out a much longer and complete response to the dismissal of their Chapter 11 bankruptcy case. A quick read through it shows a few thing. First, they are trying to put a positive spin on what is really not a positive for the NRA. That is to be expected.

Second, they cherry-picked the decision. When they say they have the option to file a new case, they forget to say the judge said any new case would have a trustee. That would mean Wayne and Bill Brewer would be booted. Do you really think Wayne and Brewer would file again when they know they are out?

Third, Wayne and the rest of the “Gang of Four” (as some have called them) all made statements to the effect that the NRA is strong, secure, and they will keep up the good fight. The question is are they fighting to keep their positions or actually fighting to advance the Second Amendment. As many have commented, just think what all the millions wasted on the bankruptcy’s legal fees could have done to advance the fight for the Second Amendment.

Below is the NRA’s full response in its entirety. I haven’t even highlighted the stupid shit.

NRA Moving Forward with Legal and Business Strategy in Response to Dismissal of Bankruptcy Filing 

Court Finds That NRA’s Move to Texas Could Still Be Accomplished Outside Bankruptcy

In response to today’s dismissal of a prior bankruptcy filing, the National Rifle Association of America (“NRA”) announced that it will continue to fight on all fronts in the interests of its mission and its members.   

The New York Attorney General and others had aligned against the NRA in opposition to the NRA’s reorganization plan announced on January 15, 2021. They sought to dismiss the NRA’s bankruptcy filing with prejudice or, in the alternative, appointment of a court-appointed trustee, to take control of the Association’s business and financial affairs. Importantly, a United States Bankruptcy Court in Dallas did not appoint a Trustee or examiner, even as it ruled the Association may not proceed with the chapter 11 case. The court dismissed the bankruptcy filing without prejudice, meaning the NRA does have the option to file a new bankruptcy case. 

During a 12-day hearing that occurred over approximately four weeks, the NRA established that it had adopted new policies and accounting controls, displaced many “insiders” who had allegedly abused the Association, and accepted reparations for costs voluntarily determined to be excess benefits. The hearing proceedings focused on the NRA’s compliance efforts, and the organization’s renewed commitment to good governance. 

In an opinion, dated May 11, 2021, the Hon. Harlin D. Hale, U.S. Bankruptcy Judge, Northern District of Texas, wrote, “In short, the testimony…suggests that the NRA now understands the importance of compliance. Outside of bankruptcy, the NRA can pay its creditors, continue to fulfill its mission, continue to improve its governance and internal controls, contest dissolution in the NYAG Enforcement Action, and pursue the legal steps necessary to leave New York.”

Underscoring the importance of the proceedings, Judge Hale previously said the NYAG motion contesting the NRA’s Chapter 11 filing was “the most important motion I’ve ever heard as a judge.”  

The NRA remains determined to further streamline its legal and business affairs in the best interests of its constituents and members.  

NRA CEO & EVP Wayne LaPierre said today’s decision – and the ongoing independence of the NRA – empowers the Association’s approximately 5 million members. 

“The NRA remains committed to its members and our plan for the future,” says NRA CEO & EVP Wayne LaPierre. “Although we are disappointed in some aspects of the decision, there is no change in the overall direction of our Association, its programs, or its Second Amendment advocacy. Today is ultimately about our members – those who stand courageously with the NRA in defense of constitutional freedom. We remain an independent organization that can chart its own course, even as we remain in New York to confront our adversaries. The NRA will keep fighting, as we’ve done for 150 years.” 

The NRA remains determined to confront NYAG Letitia James in her attempt to dissolve NRA. The NYAG seeks such remedies as part of a lawsuit she filed on August 6, 2020. In summer 2018, then NYAG candidate James called the NRA a “criminal enterprise” and “terrorist organization.” Her subsequent pursuit of the NRA has been characterized by many legal experts and constitutional scholars as a gross weaponization of legal and regulatory power.

“The NRA will continue to defend the interests of the Association in New York,” says William A. Brewer III, counsel to the NRA. “Our client has faith in its leadership, and its demonstrated commitment to good governance.” 

“The record reflects the NRA undertook a ‘course correction’ with respect to its management,” says NRA President Carolyn Meadows. “The Association is strong and secure – once again moving forward above the objections of its adversaries and those who oppose Second Amendment freedoms.”

The NRA can still pursue establishing business operations in Texas, and the organization will continue to explore moving its headquarters there from Virginia. Texas is home to more than 400,000 NRA members. 

The bankruptcy hearing became the nation’s highest -profile legal proceeding of its kind. The virtual proceedings, involving more than 20 witnesses, explored novel issues that define the roles and responsibilities of legal defendants subjected to the threat of dissolution. The NRA has maintained it is financially viable, following its current pathway, in part, to escape a toxic political environment in New York. The NRA was incorporated in New York in 1871. 

The legal proceedings revealed the NRA’s commitment to good governance and efforts to follow the “principled path” with respect to its management practices, board oversight, and member obligations under Mr. LaPierre’s leadership. Mr. LaPierre remains at the helm of the organization, directing political affairs, grassroots activities and other functions essential to the defense of the Second Amendment. 

“The record establishes that NRA members can have great confidence in this institution and its plans for the future,” says NRA First Vice President Charles Cotton. “The Association will work with members, vendors, and other constituents to continue the fight for freedom.” 

“Our NRA is pressing forward with its plans, and remains determined to promote constitutional freedoms,” says NRA Second Vice President Lt. Col. Willes K. Lee, USA (Ret). “We will never shrink from the tough and principled stands we take on behalf of our law-abiding 5 million members.” 

Read Judge Hale’s Order Granting Motions To Dismiss here.

# # #

NRA Special Meeting (Update)

Rumors started on Sunday with a report by Dan Zimmerman of TTAG about Wayne LaPierre’s speech to CPAC. After saying that Wayne’s speech was old and stale, he concluded with this teaser, “The good news is, we happen to know that the NRA is actively seeking his replacement.”

Then yesterday, John Crump who writes for Ammoland.com had a tweet saying to “prepare for some big NRA news on or around March 14.”

The March 14th date was interesting because there was no hearing set on that date in either the NY Attorney General’s dissolution case nor in the NRA’s bankruptcy case.

It turns out that NRA President Carolyn Meadows has called for a special meeting of the Board of Directors to be held in Dallas on March 14th.

March 2, 2021

                                                                  OFFICIAL NOTICE

                                SPECIAL MEETING OF THE BOARD OF DIRECTORS

TO:      Board of Directors and Executive Council

            The NRA President has called for a special meeting of the Board of Directors to take place on Sunday, March 14, 2021, at 10:00 a.m. in Dallas, Texas.  The sole purpose of the meeting is to provide a briefing to the Board regarding the NRA’s reorganization plan and the legal matters overseen by the Special Litigation Committee, and to take any necessary action directly related to those matters.

   The NRA Board of Directors and Executive Council and will meet at the Omni Dallas Hotel, 555 South Lamar Street, Dallas, Texas 75202, (214) 744-6664.  The date, time and location of all meetings are on the attached schedule of meetings and meals.  [Special Note:  The special meeting of the Board of Directors will start at 10:00 a.m. Daylight Savings Time on Sunday, March 14. Daylight Savings Time begins at 2:00 a.m. on Sunday, March 14.  On Saturday night, remember to set your clocks forward one hour (i.e., losing one hour) to “spring ahead.”]

Members in attendance are authorized reimbursement for ordinary and necessary expenses actually incurred on the following basis:

If I had to speculate – and that is always a dangerous thing – I would say that it is a move to get the Board of Directors to explicitly approve the filing for bankruptcy. You may remember that Judge Phillip Journey made the point in his motion for a court-appointed examiner that the directors’ never voted to file bankruptcy. Further, bankruptcy law expert Prof. Adam Levitin wondered if the Board had shirked its fiduciary duties by not explicitly approving a bankruptcy filing.

As the after the fact approval of many expenditures by the Board’s Audit Committee makes clear, the NRA Board has a history of approving things after the fact that should have had explicit pre-approval. This could be one of those ex post facto approvals. I would be the most surprised person in the room if it was actually to announce a replacement to Wayne LaPierre. I just don’t see a Board packed with Wayne loyalists doing that.

UDPATE: A friend who knows the NRA bylaws far better than me just pointed out something about this special meeting. According to Article IV, Section 3 (b), while the President, the Executive Committee, or the majority of the Board can call a special meeting, it has a notification requirement.

From the NRA Bylaws:

Notice of the time, place, and object of such special meetings shall be mailed to each Director at least 30 days before the date of holding such meetings.

Now I know that the NRA Bylaws don’t mean much to Wayne and company but you would think that given both the dissolution lawsuit and the bankruptcy proceedings that dotting the I’s and crossing the T’s just might be the smart way to go. I don’t know if the Board is getting their advice from William Brewer III, NRA General Counsel John Frazer, or the Board’s attorney Wit Davis but whomever said it was OK to ignore the bylaws either doesn’t give a big rat’s ass or is an idiot.

Either way, anything voted on and decided in this Special Meeting of the Board could be challenged in court as being invalid due to violating the bylaws.

“A Personal Agenda”?

Judge Phillip Journey hit a nerve with his motion for appointment of an examiner in the NRA’s Chapter 11 bankruptcy filing. So much so that the powers that be felt compelled to send an email to all members of the Board of Directors after 9pm Monday night.

The email was by NRA President Carolyn Meadows. Let me correct that last statement. The email was from Carolyn Meadows but it was so lawyerly crafted that I have immense doubts that she herself composed it.

She starts off by mentioning the court filing and then asserts the Judge Journey misunderstands the NRA’s bylaws. She says he is mistaken in his belief that the formation of the Sea Girt LLC vehicle and the Chapter 11 bankruptcy filing required special board approval. She asserts that the revised employment contract of Wayne LaPierre which was approved by the entire board provided that authority.

I am not a lawyer nor am I an expert in bankruptcy law. However, from everything I’ve read elsewhere from real experts in bankruptcy law, the formation of special entities and especially the filing of a bankruptcy requires an expressed approval from a board. In other words, it is not a power that can be delegated to the hired staff like Wayne.

The Complementary Spouse read over the email as well. Her take was that this email actually, for the most part, did not dispute Judge Journey’s motion so much as dance around it.

Then there was this line: “I find it disgraceful anyone would suggest otherwise to advance a personal agenda.” That was in reference to the line in the motion of how at least one board member was told to sit down and shut up. The Complementary Spouse noted the irony of accusing a board member of having a personal agenda when no one has a bigger personal agenda than Wayne LaPierre.

The email ends by saying if any board members have questions to please direct them to the board’s attorney Wit Davis. I should point out that he was hired by Wayne LaPierre to replace Steve Hart who LaPierre fired.

“His contributions to the NRA have been transformative.”

“Wayne LaPierre’s compensation reflects his enormous contributions to our members and the freedoms for which they fight,” NRA President Carolyn Meadows said in a statement. “His contributions to the NRA have been transformative.”

The statement from Mrs. Meadows come in response to reports in the Wall Street Journal, the New York Times, and the Washington Post about Wayne LaPierre’s reported compensation in 2018. This comes from the not-yet public Form 990. That form is a financial report that all not-for-profits must file with the Internal Revenue Service annually.

The AP reports:

According to the filings, known as 990s, longtime NRA CEO Wayne LaPierre’s total compensation rose to more than $2 million. His base salary went from $1.17 million to $1.27 million, he received a bonus of about $455,000, and he got about $366,000 from a deferred compensation plan, according to the documents cited in media reports.

The story from the Wall Street Journal notes that revenues rose 13% while expenses rose 7% for the year. It also noted that Brewer, Attorneys and Counselors, was paid $13.8 million in legal fees making it that third-largest NRA vendor. The largest vendor for 2018 was, as may be expected, Ackerman McQueen.

Ackerman was the largest outside vendor, having been paid $32 million, plus $6.3 million for out-of-pocket expenses, including media buys and “reimbursement of travel and business expenses.”

Given past reports regarding LaPierre’s use of AckMac to disguise his actual spending, I wonder how much of the reimbursement was for his personal expenses.

In addition to the reports on LaPierre’s compensation was this note in the Washington Post on the monies spent by NRA-ILA.

Spending by the political arm of the NRA dropped from $47.1 million in 2014 to $32.51 million in 2018, the filings show. That was the midterm election in which Democrats took over the House and gun-control groups outspent the gun lobby for the first time.

That is very concerning. The monies spent – or in my opinion, wasted – on Brewer, Attorneys and Counselors, could have been used to support the campaigns of pro-gun candidates.

I will be requesting a copy of the 2018 Form 990 from the NRA Secretary’s Office. I have a feeling that it will contain many more unwelcome revelations.

As to the comment from Mrs. Meadows with which I started this post, I agree with her last sentence. LaPierre has been transformative for the NRA. However, if the last few years are any indication, it is not in the way that Meadows means or that you and I would want.

NOTE: If any of my readers has a copy of the 2018 Form 990 or a link to it, please send to me at jpr9954 AT gmail DOT com.

More On The Purges

The Washington Post has more on the purges at the NRA. It includes comments from Wayne LaPierre, Carolyn Meadows, and Charles Cooper among others. The comments are actually more interesting than the supposed smoking gun texts that were reported in the New York Times.

From Wayne:

“It disturbs me that the NRA’s supposed ‘friends’ — a man I personally recruited to be president of the NRA, our trusted ad agency of four decades, a couple of our attorneys, and a chief lieutenant — would engage in this obviously premeditated extortion scheme to harm our association,” LaPierre said.

Wayne continues to peddle the mythical “extortion” meme as well as pushing the supposed “coup” theme. As to the extortion claim, all we have is the word of Wayne and that of a convicted felon.

From NRA President Carolyn Meadows who thinks Wayne is just the bee’s knees or something like that:

Carolyn Meadows, the NRA’s current president, said in a statement there has been a “malicious smear campaign against the NRA and our leaders.”


“Kernels of ‘truth’ were stripped of context, wrapped in lies, and peddled to the media and unsuspecting audiences,” she said.

Remember that old legal saying that the truth is the absolute defense against libel? If all that has been reported had been a malicious smear (or libel), don’t you think William Brewer III would have started legal proceedings by now so as to earn even more money?

Charles Cooper of Cooper and Kirk did release a statement. He said in the Post:

He “adhered to the highest standards of professionalism and loyalty.”


He said his allegiance was to the nonprofit group, “not to any individual officers or directors of the organization.”


“At every turn, I have advised my client as to my best judgment of the steps that should be taken to advance and protect the best interest of the NRA itself,” Cooper added, declining to comment further.

Given Mr. Cooper’s past positions as both a Supreme Court clerk and as an Assistant Attorney General during the Reagan Administration, I would have expected nothing less from him. He has represented the NRA and fought for the Second Amendment for three decades. There are places his dismissal may well have dire consequences for gun rights.

On Mr. Cooper’s legal ability, Alan Gottlieb of the Second Amendment Foundation noted, ” Charles Cooper and his law firm have done excellent work on Second Amendment issues.”

The key thing to notice about these dismissals and departures is that the attorneys involved have in one way or another crossed William Brewer or are thought to have crossed him. Given he has Wayne’s ear and feeds his paranoid delusions, it is no wonder any possible competitor gets the boot. The worst part about this is that every one of these departures only weakens the NRA when it comes to its core mission of protecting the Second Amendment. It makes one wonder if former NRA Board attorney Steve Hart was correct in his speculation that Brewer could be a “Manchurian candidate”.

The Response

The letter from Sean Maloney, Tim Knight, Esther Schneider, and Robert Brown provoked an almost immediate response from the NRA and NRA President Carolyn Meadows.

The official statement:

The response from Carolyn Meadows:

Both of these come courtesy of Stephen Gutowski of the Washington Free Beacon. He posted them on Twitter last night.

I seem to remember hearing or seeing a memo from Oliver North, Richard Childress, AND Carolyn Meadows which raised questions about the financial affairs. It seems that once she became president her views changed 180 degrees.

As to Brewer himself, if one were a conspiracy theorist, you would have a field day. Think about it: liberal Democrat lawyer, gives money to Beto and Hillary, AckMac son-in-law, worms his way into the confidence of the EVP of the NRA and starts a civil war within the organization in the run-up to the 2020 elections. Duplicity on this scale is worthy of a Vladimir Putin. Frankly, while some have suggested it, I don’t think Michael Bloomberg could have conceived on creating a mole like this.

The Purges Continue, Part III

Another day and another NRA Board member reports that he has been removed from all his committees. In this case, it is Sean Maloney of Ohio. He, along with Tim Knight, are two of the stalwarts of the grass roots in the NRA. When the recall campaign began in Colorado a few years ago, both he and Tim answered the call and went to Colorado to help in the successful effort.

You may also recall that when CarryGuard was introduced, a number of companies that offered legal protection services for concealed carriers were summarily disinvited to the NRA Annual Meeting and Expo in Atlanta. Sean Maloney’s Second Call Defense was one of those organizations.

Below is the form letter that Sean received from NRA President Carolyn Meadows.

Sean responded to Mrs. Meadows with this letter:

July 12, 2019


Carolyn D. Meadows
President NRA
National Rifle Association of America
11250 Waples Mill Road
Fairfax, VA 22030


RE: NRA Committee Assignments for 2019-2020


Dear Madam President,


I recently received notification from you, that you removed me from all my NRA Board of Directors Committee Assignments, with no explanation. Even after repeated phone calls to you, which resulted in voicemails asking for a return call, I still have not received a return phone call, letter or email of explanation.


Shockingly, you even removed me from the NRA-ILA Grassroots Development Committee, after many years of serving on that committee with perfect attendance. After years of volunteer grassroots activism, I was recognized in 2010 with the NRA-ILA Jay M. Littlefield Volunteer of the Year Award and recognized on the floor of the Ohio House of Representatives for my work as an Election Volunteer Coordinator for NRA-ILA in Ohio.


In 2012, I was inducted into the NRA-ILA Election Volunteer Coordinator Hall of Fame, resulting from my time and dedication to the Grassroots Division as an Election Volunteer Coordinator.


Over the years, as a Volunteer for the NRA, paying my own way for travel expenses, and receiving no compensation from the NRA, I have continued to dedicate myself to grassroots activism.


In 2013, I traveled to Colorado to participate in the successful recall election effort of two anti-gun Senators. Again, in 2013, I traveled to Virginia under the direction of NRA-ILA Grassroots Division to campaign on behalf of pro-gun Gubernatorial, Senate of Virginia and Virginia House of Delegates Candidates.


In 2014, I traveled to Connecticut, Iowa and Ohio, under the direction of NRA-ILA Grassroots Division and campaigned on behalf of Federal State and Local pro-gun candidates during Primary and General Elections.


In 2015, I traveled to Virginia under the direction of NRA-ILA Grassroots Division to campaign on behalf of Senate of Virginia and Virginia House of Delegates pro-gun Candidates.


In 2016, I traveled to Florida to assist in the General Election; that same election cycle I returned to Ohio where I volunteered for the top NRA-ILA Campaign Field Office in the Country, in support of Donald Trump, and other Federal, State and Local candidates.


In 2018, I campaigned in Ohio under the direction of NRA-ILA Grassroots Division on behalf of Federal, State, and Local candidates. I also hosted a pro-gun meet and greet Ohio Candidate Forum for all Federal, State, and Local pro-gun candidates up for election in Ohio. In Ohio, under the direction of the NRA-ILA, I assisted in successfully electing a 100% pro-gun Executive Slate.


Earlier this year, in May, I co-hosted a shooting event for my pro-gun Congressman Warren Davidson. Most recently, I traveled to Sandusky County, Ohio, and spoke to a “100 NRA Club” considering ending its affiliation with the NRA, because of recent concerns. I successfully persuaded them to remain an NRA Club.


Yet, after all I have done in support of the Grassroots Development Committee, and all the other NRA Committees of which I faithfully served, I was blacklisted. I can only surmise, that I was blacklisted for taking actions to obey my oath as an NRA Board Member, and follow the Code of Ethics for Directors of Nonprofit Corporations; which required me to exercise my fiduciary duty of care; which caused me to question management decisions within the NRA, and to further investigate matters of which I was made aware.


I respectfully request that you reconsider your decision to remove me from all Committees, particularly the Grassroots Development Committee, and reappoint me to the Grassroots Development Committee, and further communicate to me your rational for removing me from all my Committee assignments.


Very truly yours,


/s/ Sean Maloney


Sean Maloney


enclosure

Sean is only the latest Board member to acknowledge his removal from committees. There will be more to come. Of that you can be sure.