Marshall Moves To Intervene In NRA Dissolution

In September, NY Supreme Court Judge Joel Cohen ruled that Frank Tait and Mario Aguirre did not have standing to bring a Motion to Intervene in the New York Attorney General’s case asking for dissolution of the NRA. Among the things he mentioned at the time in ruling against them was the timeliness issue and that 5% of the members were not part of the Motion. At the time of the hearing, it was mentioned in court that a director of the NRA would be joining the Motion to Intervene but Judge Cohen said he could only rule on what was in front of him

Today, Rocky Marshall, a NRA Director, filed a Motion to Intervene in the case as a defendant, claimant, and counter claimant. New York Not-for-Profit Corporation Law § 720 b (1) gives a director the statutory right to seek relief against a defendant for neglect, mismanagement, or “other violation of his duties in the management and disposition of corporate assets committed to his charge.” A director can also seek relief against a defendant for the loss or waste of corporate assets due to the defendant’s negligence, failure to perform, or other violations of his duties. New York CPLR § 1012 states that Mr. Marshall has an absolute right to intervene based upon NPCL § 720 b (1)

Remember that not only is the NRA a defendant in this case but so are Wayne LaPierre, Woody Phillips, Josh Powell, and John Frazer.

One of the grounds for seeking the Motion to Intervene is:

The Proposed Intervenor seeks to assure that the NRA as an entity has independent, conflict-free counsel. The law firm presently representing the NRA is irreconcilably conflicted and the NRA is alleged by the Attorney General to be controlled by one or more of the individual defendants. Thus no present party or law firm can adequately protect the NRA’s rights as an entity separate from the individual defendants.

The Memorandum of Law that accompanies the Motion to Intervene is quite interesting. It starts out by saying that Letitia James is wrong when she asserts that the NRA cannot be rehabilitated and dissolution is the only answer. It continues to say that the NRA and its leadership are wrong when they say it is nothing more than a political attack and everything is fine. It goes on to say that James cannot prove that dissolution of the NRA would be “beneficial to the NRA’s members”. It continues:

On the other hand, to rule for the Defendants merely requires that the Court hold its nose and swallow their claims that the NRA Board has investigated the Attorney General’s allegations and found nothing wrong, disregarding abundant evidence of the Individual Defendants’ serious breaches of duty and conflicts of interest, some of which is already before the Court.

Mr. Marshall goes on to say that the Board has failed in its fiduciary duties to the NRA and to its members. Problems have been presented to the Board and they have ignored them while also taking no action against the named individuals (LaPierre, Powell, Phillips, and Frazer).

Thus, the Memorandum states the Board should be dissolved because they are not independent of LaPierre and that a receiver be appointed. Mr. Marshall suggests he would be willing to serve as a temporary receiver to get a proper accounting and to elect a new independent board.

As to the old Board and leadership, it must go:

As his proposed Answer says, Mr. Marshall recognizes and appreciates that without this action no meaningful change in the NRA’s governance will likely occur due to Defendant LaPierre’s total control of the executive leadership and his dominance of the Board. To the extent possible Mr. Marshall will work with the Attorney General to reform the NRA’s
leadership for the benefit of all rank-and-file NRA members. Mr. Marshall will pursue recovery of all NRA funds wrongfully paid to the third parties implicated but not sued by the AG, while vigorously opposing the AG’s dissolution claim.

Accompanying the Motion and the Memorandum are 12 exhibits which consist of a proposed answer, numerous emails, NRA Board minutes, Marshall’s bio and resume (which is very impressive), and a compilation of Form 990 data. Rather than go through each of these, I am just going to put the links to them below.

Proposed Answer

Liptak Email

North-Childress Letter

Brewer legal bills

NRA Board Minutes 1/7/2021

Email to Board, 3/15/2021

Email to Board, 3/17/2021

Compilation of Form 990 data

NRA Board Minutes, 3/28/2021

Email to Board re Brewer, 3/18/2021

Email to Board, 7/1/2021

Email to Board, 8/27/2021

Bio and Resume

I would be remiss to not mention that Attorney General Letitia James released a statement today on Mr. Marshall’s Motion to Intervene. The only really relevant part was this:“While we continue to review this motion, we are glad to hear that Mr. Marshall agrees that Wayne LaPierre and his top lieutenants must be removed from the NRA. Our fight for transparency and accountability from the NRA and its leadership will continue because no organization is above the law.”

The Wall Street Journal reports that Willes Lee issued the official response from the NRA.

“It is unfortunate that Mr. Marshall aligns himself with those who continually attempt to intervene in the handling of NRA’s matters by its elected leadership. The NRA is a well-managed, actively engaged membership organization. We will continue on our current course of action—in the interests of our five million members and their Second Amendment freedoms.”

Any one who has read my blog for the last couple of years knows my opinion of Willes Lee. My biggest regret is that I endorsed him for the Board not once but twice. I was taken in by him like so many others. That someone of his ilk is in a leadership position at the NRA says everything you need to know about why Mr. Marshall’s Motion to Intervene must be granted.

2021 NRA Board Election Results

The unofficial election results for the NRA Board of Directors has been released. First, off no write-in candidate was elected meaning that neither Frank Tait nor Rocky Marshall gathered enough votes. Second, everyone who was nominated and didn’t drop out was elected to either three year or one year terms.

Three year terms in order of votes received:

Ronnie Barrett

Carrie Lightfoot

Wayne Anthony Ross

Carolyn Dodgen Meadows

Edie P. Fleeman

Owen Buz Mills

Jim Tomes

Don Saba

Bill Miller

Maria Heil

Donald J. Bradway

Robert J. Wos

William Bachenberg

Scott L. Bach

Kim Rhode

Craig Swartz

Joel Friedman

John C. Sigler

Janet D. Nyce

Niger Roy Innis

David G. Coy

John L. Cushman

David A. Keene

James L. Wallace

Dean Cain

For one year terms:

Anthony P. Colandro

Antonio Hernandez

James Chapman

It is my understanding that there will not be an election for the 76th Director at the NRA Annual Meeting. The nominees for 76th Director are traditionally those who were on the ballot that did not get elected in the regular election. With everyone on the ballot being elected, I guess the argument is that there are no nominees for 76th Director. That said, Charlton Heston was elected as the 76th Director based upon being a right-in candidate. Somewhere along the way the bylaws got changed to remove this possibility.

An alternative explanation could be that Wayne’s trick of using expense-paid “volunteers” from the NRA Members’ Councils of California to campaign for his selected candidate has come to light. Not only was it exposed in the Gangster Capitalism podcast last year but it is now part of the New York Attorney General’s amended complaint (see paragraphs 311 and 312.)

It could also be that he has so many loyalists elected that he doesn’t need to waste our member’s dues to elect just one more.

Don McLean Plays NRA Annual Meeting

A tweet by Bitter brought up that Don McLean was playing the Saturday musical event at the NRA Annual Meeting. I never pay much attention to that event as I never go. I would agree with her that he should have gotten top billing and I mean no disrespect to Lee Greenwood or any of the other performers.

I still remember how we analyzed the lyrics to American Pie in 9th grade English with Mr. Tutt. From what I understand McLean never every explained them but I think our analysis was pretty close to this story by the BBC.

So with apologies to Mr. McLean and because it is the NRA Annual Meeting, I’ve taken a little license with his first three stanzas.

A long, long time ago
I can still remember how the NRA
Used to make me smile
And I knew if I had my chance
That I could make those politicians dance
And maybe we’d be happy for a while

But January made me shiver
With every paper I’d deliver
Gun control on the doorstep
I couldn’t take one more step
I can’t remember if I cried
When I read about Biden and his guy
Something touched me deep inside
The day the freedom died

So, bye-bye, Miss NRA
Wayne drove his Chevy to the levee, but the levee was dry
And the good ol’ Board was drinkin’ whiskey and rye
Singin’, “This’ll be the day that I resign
This’ll be the day that I resign”

A poet or lyricist I’m not. However, I’m still furious about untold amounts of wasted money going to Wayne’s Rasputin when it could have been used to assure that the Senate remained a bulwark against more gun control. How Wayne’s paranoia forced out Chris Cox from ILA who might have prevented one, if not both, of the senators from Georgia going to the Democrats. Most of all, I’m disgusted that the Board has acquiesced to all of this and many still think Brewer is the smartest guy in the room when he clearly is not.

Is Wayne LaPierre A Peril Or A Hazard?

While I had heard rumors of Lloyd’s of London refusing to renew the NRA’s Directors and Officers insurance, Stephen Gutowski of The Reload confirmed it yesterday morning. He noted that in this past weekend’s Board of Directors meeting, they voted to create a $5 million fund to cover the board and executives as they search for a new policy.

NRA board member Phillip Journey told The Reload the fund was announced during the closed executive session of the gun group’s Saturday board meeting. He said board members were authorized to talk about it after the session ended, though. He believes the fund was created to alleviate concerns about liability raised by a number of board members.

“It was apparent from the comments that there are several board members that have expressed concerns,” Journey said. “This was their attempt to address the concern, knowing that the policy expires in, golly, less than 40 days.”

Lloyd’s did not respond to a request for comment. The elite business group has a reputation for insuring high-risk clients, and Journey said its decision not to renew the NRA’s policy is bad news.

“I mean, if Lloyd’s won’t insure you, who the hell will?” he said.

Judge Journey is correct. Lloyd’s of London will insure and reinsure risks that traditional insurance companies will refuse to cover. It should be noted that Lloyd’s is not a company but a marketplace that brings together investors, underwriters, brokers, and insurance companies.

I taught insurance and financial planning at Western Carolina University as an adjunct instructor for a decade. One of the topics we covered was risk management and ways to mitigate it. Insurance is the proper tool to use when the severity of the loss is high and the likelihood of an occurrence is low. It is properly termed “risk transfer”.

Without getting too deep into the weeds, there are a few definitions that need to be clarified when speaking of insurance. First, risk is the probability or chance of a loss. In the NRA’s case, I am speculating the underwriters calculated that the probability of a loss or claim against the directors and officers for failing to do their fiduciary duty was rather high.

Going further, peril is the direct cause of a loss while a hazard is something that either causes or increases the likelihood of a loss. If you have a homeowner’s policy you will see these terms on it. Looking at the recent condo collapse in Dade County, the collapse was the peril while the deteriorating concrete was the hazard. In terms of the NRA, you could say that Wayne LaPierre’s grifting behavior is the peril and that the Board of Directors acquiescence in letting Wayne do anything he wants is the hazard.

A couple of the major considerations in underwriting D&O insurance are recent legal actions alleging violation of federal or state law and involvement in bankruptcy proceedings. The NY Attorney General’s lawsuit to dissolve the NRA and hold Wayne and others personally responsible fits that bill as does the abortive attempt to use bankruptcy to evade New York’s enforcement authority. When you add that to the Board’s seeming unwillingness to do its fiduciary duty, it is no wonder that the underwriters at Lloyd’s said nope.

As a result, the NRA will self-insure as noted in the article from The Reload. Frank Tait, who is running for the Board, has an excellent look at what self-insuring or setting up a captive insurance company would mean for the NRA.

A more humorous look at this whole debacle comes from Bitter at Shall Not Be Questioned. She notes that Wayne is a bigger risk than fire and brimstone. Lloyd’s is willing to insure the Hawaii neighborhood that sits on top of an active volcano but is not willing to insure the NRA’s directors and officers. At least with the volcano you know the extent of the losses.

So to answer the question posed in the headline, I think you could say that Wayne is the peril and his continuing presence at the top of the NRA is the hazard. Dumping the Gang of Four of Wayne, Carolyn, Charles, and Willes won’t cure the NRA’s problems but it would be a step in the right direction.

10 Potential Replacements For Wayne LaPierre

First off, this is satire. That said, some of them would be more likely to do a better job than Wayne LaPierre in running the NRA.

This suggested list comes from the Gun Cranks. They are Tom McHale, editor of American Handgunner, Brent Wheat, editor of Guns Magazine, and Roy Huntington, the retired publisher of both publications. They are gun guys who have had it with Wayne LaPierre’s grifter ways.

I have edited their discussion down to just their 10 potential replacement for Wayne.

Enjoy!

Lipstick On A Pig

A missive went out yesterday afternoon to NRA members from Wayne LaPierre saying all is well. I didn’t receive it but the Complementary Spouse did. I must be on the Marion Hammer-Willes Lee “enemies within“haters” list since I didn’t receive it despite being an Endowment Life member.

The Complementary Spouse who is not given to invective called it a “crock of shit” after reading it.

Whether it is cherry-picking what Judge Hale actually said or asserting that the decision had no impact “on our staffing, programs or Second Amendment advocacy”, you have to wonder. You have to wonder if they think the great majority of us are so gullible that we will accept this nonsense as the gospel truth. You have to wonder in what alternate universe Wayne and his board supporters live in if they think the NRA is “strong and secure.”

There is one line in which I agree 100%. The second paragraph starts, “Over the past month, we did it again.”

If by did it again, you meant that you gave Bill Brewer and his firm millions of dollars for shady legal advice and are worse off for it, I’d agree. The “Mental Experiment” speculation of the blog NRA In Danger makes a plausible case that Bill Brewer’s ultimate goal is to destroy the NRA and get rich by doing it. I think a strong case can be made that the NRA’s downward trend started the moment that Bill Brewer whispered in Wayne’s ear, “I can keep you out of prison.”

If you didn’t get the letter or have let your membership lapse out of disgust, I have printed it below.

Dear NRA Members,

In my more than 40 years with the NRA, we’ve taken part in some bruising fights to defend our freedoms and our NRA. As they say, nothing worth having comes easy.

Over the past month, we did it again. The NRA took center stage in the fight for our reorganization in federal court in Dallas. Although our case for reorganization was dismissed on May 11, there are many positive developments that bode well for the Association and its plans for the future.

Strong and Secure

First and foremost, the legal decision has no impact on our staffing, programs or Second Amendment advocacy. All of our work continues and remains as vital as ever. We will continue to defend constitutional freedoms, promote firearms education, and advocate for and represent our members in all appropriate forums.

This outcome has no impact on all the divisions and affiliates associated with the NRA. Our programs, political activity, charitable endeavors, and Second Amendment advocacy all continue. We remain strong and secure.

Second, the New York Attorney General and others that aligned against the NRA in opposition to the NRA’s reorganization plan were unsuccessful in their effort to derail us. As you may have read, they sought to dismiss the NRA’s Chapter 11 reorganization filing with prejudice or, in the alternative, appointment of a court-appointed trustee. They wanted to see someone else take control of the Association’s business and financial affairs.

None of that happened. The court in Dallas did not appoint a trustee or impose any other form of oversight on the NRA. Instead, the court dismissed our reorganization filing without prejudice, meaning the NRA has the option to file a new case in the future if the need arises. Importantly, there was no financial watchdog (an examiner) appointed, as sought by some.

The enemies of the Association want to claim the NRA filing was in “bad faith” and the NRA should be assessed penalties. But, that’s not what the judge found. On May 14, the judge clarified that he did not hold that the NRA reorganization filing was in “bad faith.”

In summary, we are no longer in bankruptcy court in Dallas – and our mission moves forward.

Our leadership team remains intact. Those outcomes are far from the “doom and gloom” predicted by the so-called experts, many in the far-left media, and gun control advocates. Don’t believe everything you read in the newspaper: we are not going anywhere. We’re fighting as hard as ever in defense of your freedoms.

Our plans are not finalized, but we remain committed to exploring a move of all or part of the NRA’s business operations to Texas – home to more than 400,000 NRA members. In fact, the court observed that we could still accomplish those goals outside of bankruptcy court. In other words, our business operations and plans for the future are not affected by these developments.

The Record Reflects: Committed to Good Governance

During a 12-day court hearing that occurred over approximately four weeks, the NRA established that it complies with board policies and accounting controls, displaced “insiders” who abused the Association, and accepted reimbursements for costs voluntarily determined to be excess benefits.

The hearing proceedings focused, in significant measure, 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.”

Of course, very little of this was publicly reported.

As I told the media, the NRA remains committed to its members and our plan for the future. This fight is about our 5 million members – those who stand courageously with the NRA in defense of constitutional freedom.

Let this be clear: we are an organization that remains committed to its course, even as we confront our adversaries in New York and beyond. The NRA will keep fighting, as we’ve done for 150 years.

Confronting a Political Agenda – and Fighting for Freedom

That means the NRA continues to confront NYAG Letitia James in her attempt to dissolve the NRA.

The NYAG wants to close our doors 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. Even the ACLU recognized that.

As several NRA board members noted, the record now establishes that NRA members can have great confidence in this institution and its plans for the future. We will work with members, vendors, and other supporters to continue the fight for freedom. And we will never shrink from the tough and principled stands we take on behalf of our law-abiding 5 million members.

It all comes down to protecting your constitutional freedoms. The NRA has never shied away from those fights. And I promise you, that’s a fight we’ll always take on.

Wayne Signature

Wayne LaPierre

Frank Tait and I were on the Armed Society Podcast last night discussing the bankruptcy dismissal. One thing that Frank brought up with regard to the NRA’s strategy over the years is that they have been playing defense as opposed to offense. We both agreed that we wanted a more pro-active NRA that ditched their “not invented here” mindset and that had a strategic plan to optimize what they do best such as training, competition, and Federal lobbying.

Randy Luth’s Shot Across Wayne’s Bow

Randy Luth was the founder of DPMS/Panther Arms and is the president of Luth-AR. I have a Luth MBA-1 buttstock on my “Charlie Foxtrot” DMR AR-15. He has been in the AR end of the firearms industry a long time. He is also no fan of Wayne LaPierre and wants him gone for the benefit of the NRA.

He sent an open letter that has been published in The Outdoor Wires series of online publications. He says something needs to be done to capture the attention of the go-along, get-along NRA Board of Directors as it is obvious that Wayne LaPierre is not going to step down on his own. His suggestion is an industry and member boycott of the NRA Annual Meeting and Exhibition in Houston over Labor Day weekend. The Annual Meeting is a big money generator for the NRA from booth rentals and the fundraising events.

Here is Mr. Luth’s open letter:

Dear Friends and 2nd Amendment Supporters:

Wayne LaPierre- Go Away!

After watching this train wreck over the last 2 years, it is time for the firearms industry to assist in removing Wayne LaPierre from our beloved NRA.

As the bankruptcy proceedings have confirmed, there is a direct lack of leadership at the Executive level as well as the lackluster Board of Directors.

The members of the NRA donate hard-earned money to support the strongest amendment in the Bill of Rights, that would be the 2nd Amendment, not the 1st. When the NRA executives are living like Kings and Queens at the expense of working members, it is long past the time for removal or retirement of the Royalty.

Just think to the lobbying efforts and Pro-gun efforts that could have been initiated if LaPierre and his sidekicks had not caused the many lawsuits and distress within the NRA. It appears the NRA has paid attorneys close to $100,000,000 on the many lawsuits in the last few years. How can any nonprofit organization be involved in that many lawsuits?

It has become obvious the LaPierre will not step down, so it is time to help him make that decision. I propose that the firearms industry and the members boycott the upcoming annual convention/meeting in Houston over the Labor Day weekend. Exhibitors can boycott by either not attending or not setting up a booth. Members can boycott simply by not attending at all.

This proactive protest will send a strong message and may help LaPierre and his followers to pack their bags and depart. This is the only way to save the NRA, we need new Leadership and new ideas. How can there be 100,000,000-gun owners in America and less than 5 million members? I believe the reason is lack of leadership and marketing.

As a Lifetime member of the NRA and a member of the Hunters Leadership Forum, I have suspended all gifting legacy donations as well as HLF donations, in the meantime, I have donated similar dollars to other pro-gun organizations to help fight the fight.

Once new leadership is installed, I will reinstate my donations and support for the NRA, as I have done for 4 decades.

We need the NRA, but we need new Executive leadership and Board of Directors.

I ask that you stand with me. We CAN and WILL be heard loud and clear. We can right this sinking ship. Begin the Boycott!

-Randy E. Luth

I have heard many people express doubt that the NRA Annual Meeting and Exhibition will actually happen. I don’t know but I’d for sure get a room and flight with free cancellation! I probably will go if only to be there if it does come off to be a thorn in the side to the powers that be.

I do wonder how many Texas politicians will find scheduling conflicts when it comes to the NRA’s Leadership Forum. If I were Ted Cruz or John Cornyn or Greg Abbott, I think I might have other pressing matters that called for my attention.

And This Helps Impact National Gun Policy How?

I don’t know who runs the blog NRA In Danger but they have some damn good connections. They just published an internal memo from Wayne LaPierre to NRA staffers. The gist of it is that the NRA will be moving its headquarters to Texas. Gee, I wonder if Brewer, Attorney and Counselors, does any real estate law and would they be any better at that than they are at bankruptcy law.

Here is the memo:

Not for Distribution

Dear Employees:

As we reported, the recent developments in our bankruptcy proceedings have no impact on our overarching goals or efforts to make the NRA more efficient in achieving its mission. As such, we will continue to analyze our business arrangements, cost structure, and operational demands.To that end, I am pleased to announce the formation of a special committee by President Carolyn Meadows to study issues relating to our proposed move to Texas – and to analyze the logistical requirements of those plans. First Vice President Charles Cotton will chair this committee. Second Vice President Willes Lee and board members David Coy, Joel Friedman, and Tom King will join Mr. Cotton on the committee. The following staff members will serve on a project team providing administrative resources:  Joe DeBergalis, John Frazer, Jason Ouimet, Sonya Rowling, Tyler Schropp, Vanessa Shahidi, Linda Crouch, and Jim Staples.

Our first goal is to explore moving our principal place of business to Texas. This is an executive office from which we can manage aspects of our business. Texas is home to more than 400,000 NRA members – the #1 ranked state for NRA membership. It offers a fair regulatory environment and, a positive business climate, and celebrates the Second Amendment freedoms in which we believe. This move will affect a small number of employees.

The second part of our plan involves assessing a potential relocation of our headquarters. This is an endeavor that involves the review of the real estate market, impacts to staffing, and other strategic considerations. We have engaged a leading commercial real estate firm, Colliers International, to assist with this project and we will retain other advisory firms to assist with strategic considerations. Naturally, any major decisions regarding NRA real estate will be undertaken in coordination with the Board, subject to its full approval. Importantly, there are no immediate changes planned to our staffing or programs. Any changes to our organizational structure will be made in the best interests of our members, employees, and with responsibility to achieve our core mission:  protecting the Second Amendment. We will ensure our employees have an opportunity to participate in the continued progress of our great organization. You will hear more from this committee in the weeks ahead. In the meantime, please feel free to contact Vanessa with any questions. I have never been prouder of the NRA or our collective efforts to protect the freedoms in which we believe.

Wayne

Read the comments on it made in the NRA In Danger blog.

My own comment is that the people happiest about this move are every gun control organization in America, every anti-gun politician in Congress, Bill Brewer, and perhaps Susan LaPierre as she’ll probably get that social membership at the golf club now.

The NRA is inside the Beltway for a reason: it is the best location to be if you want to impact national gun rights policy. If the politics of Virginia and Northern Virginia are not good for gun rights right now, do something about it and don’t run off to Texas like a whipped dog with its tail between its legs.

Four Good Reads On NRA Bankruptcy

Bitter and Sebastian at Shall Not Be Questioned have been part of the gun blogosphere for a long, long time. While not as active as they used to be, they are still astute observers of all things NRA.

Bitter has a wonderful fisking of the NRA’s public response to Judge Hale’s dismissal of their bankruptcy case.

She concluded:

In general, this public response highlights that it’s time for Wayne to go, along with most of the yes men he has put into place. This is an embarrassment to the organization, especially as anyone remotely literate can read what the judge really said.

The blog NRA In Danger also provides a brutal fisking of the NRA’s public statement. They may be the new kids on the block in terms of blogging but whoever is writing the blog has a deep, insider knowledge of how things actually work at the NRA.

When a bankruptcy judge who has been on the bench many years, and “seen them all,” says conduct shocks him, you’re hearing it from an expert.

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

If the suit being dismissed empowers the members, does that mean that winning the suit would have dis-empowered them?

“We will never shrink from the tough and principled stands we take”

I’m getting too nauseous to continue. Hitler in his bunker was less delusional.

We had better enjoy the NRA annual meeting in four months, because it will probably be the last annual meeting. Anyone on, or getting elected to, the board, had best face the fact that they face lifelong dishonor as a member of the board that killed this fine organization. NRA has had men who held the Medal of Honor on its board, but they have been replaced by people who tremble at the thought just of dissenting. Let the leadership go insane and destroy the 150-year-old organization, these directors would rather not grow a spine.

Frank Tait, who I supported in his efforts to win a seat on theBoard and who I will be writing in for election to the Board, looked at the bankruptcy effort from a business perspective. He, after all, has been in managerial positions for many years.

“So why did you file? We can only guess that the lawyers saw the prospect of a wealthy client who wasn’t adverse to paying big fees, and thought of nothing else. Not even the most core ideas: 1. What do we want from the court? 2. is that something the court can legally give us?”

In my 40 years in business, I’ve been involved in multiple legal disputes. There is critical mindset to legal matters. THE LAWYERS WORK FOR YOU, not the other way around. The secondary mindset is risk-reward considerations, or as a former CEO liked to say “is the juice worth the squeeze.” Both of these key mindsets appear absent from the EVP and the Officers of the Board – and the remainder of the board is not asking the tough questions that are their fiduciary obligation.

Finally, Georgetown Law professor Adam Levitin has been following the case from the start. He may not be aware of the inner dynamics of the NRA but he wrote the textbook on bankruptcy law. His verdict on the filing from a legal standpoint is that it was a fool’s errand from the start.

The NRA’s bankruptcy petition was dismissed as filed in bad faith. I’m predicting that the court’s opinion will be in the next edition of every bankruptcy textbook as the case really is a textbook example of bad faith.  The court found that there was substantial evidence in the record that the NRA filed for bankruptcy for the purpose of gaining an advantage in its litigation with the NY Attorney General, namely depriving the NY Attorney General of the remedy of dissolution, rather than for any other purpose.  

He notes he’d be surprised if the NRA appeals or refiles. Moreover, he wonders if the creditors’ attorneys will file a sanctions motion against either the NRA or its attorneys for reimbursement of their litigation costs given the bad faith filing ruling.

Read all four of these blog posts. They all take a different approach but all conclude the whole bankruptcy filing was a fiasco.

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.

# # #