National Rife Association Declares Bankruptcy
By Allison Chabala
On January 15, the National Rifle Association declared Chapter 11 bankruptcy in a press release. The NRA, a gun rights organization, has a controversial image, especially in the wake of increasing gun violence. Declaring a Chapter 11 bankruptcy means that it is a reorganization bankruptcy, as opposed to a Chapter 7, or liquidation bankruptcy, which entails that the business/organization must distribute their assets, or a Chapter 13 bankruptcy, which allows individuals to repay their debts.
The NRA is a 501(c)(3) non-profit organization that endeavors to protect the second amendment of the Constitution. The organization also raises money to fund other organizations such as the Boy Scouts.
The NRA was founded in 1872 by Col. William C. Church and Gen. George Wingate. The organization is based in New York, but as of recently, is going to move to Texas, claiming that New York is a “toxic political environment.”
The NRA did not always have the reputation that it holds today. Initially, it centered on improving the marksmanship of shooters after the Civil War, after a dismayed speculation that American soldiers would not fare well in a war against Europe. But in the last century, the organization has become known for vehemently protecting gun rights.
According to Frank Smyth, the author of The NRA: The Unauthorized History (in an Interview with Vox), “hunters began to dominate the ranks of the NRA after WWII, so that changed the character of the organization, but the real shift occurred when the NRA embraced gun rights as its unyielding and absolute beacon for everything it does.” According to Smyth, the major shift came as a result of the Gun Control Act of 1968.
As a result of pervasive criticism of defense of the Second Amendment, the NRA created the Legislative Affairs Division in 1934.
Today, the NRA boasts about 5 million members. According to the organization, “this move (to Texas) comes at a time when the NRA is in its strongest financial condition in years.”
So why did the NRA declare bankruptcy?
Letitia James, the Attorney General of the state of New York, is attempting to shut down the organization through a lawsuit because of alleged corruption within the NRA. In an interview with USA Today, Melissa Jacoby, a University of North Carolina bankruptcy law professor asserted that “the NRA has made no effort to categorize itself that way. In terms of whether it’s paying its bills and any definition of insolvency – it doesn’t meet it.”
Additionally, the New York Attorney General’s office claimed that the NRA was “fleeing or seeking an end run around a pending regulatory enforcement action in New York,” which reinforces speculation that the declaration of bankruptcy is simply an attempt to avoid the lawsuit. Adam Levitin, a professor at the Georgetown University Law Center, says that the organization has nothing to lose with the declaration, as they are “out of ammo.”
Fortunately for them, Texas may provide a more welcoming environment, but that does not mean that they have completely evaded the lawsuit from New York’s Attorney General.
