The National Rifle Association on Friday filed for bankruptcy protection as part of a restructuring plan aimed at moving the influential gun rights group to Texas.
The filing comes six months after New York state’s attorney general filed a lawsuit seeking to dissolve the NRA for allegedly misappropriating funds.
The advocacy group said that it would restructure as a Texas nonprofit to exit from what it described as “a corrupt political and regulatory environment in New York,” where it is currently registered
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The NRA, which said it was not financially broke, filed for protection under Chapter 11 in U.S. Bankruptcy Court in Dallas.
In its filing, the group said it has assets of between $100 million and $500 million, and liabilities in the same dollar range.
The NRA’s largest unsecured creditor was its former ad agency Ackerman McQueen, which is owed $1.27 million, according to the filing. The gun group and the ad company have filed contentious lawsuits against one another.
“The plan can be summed up quite simply: We are DUMPING New York, and we are pursuing plans to reincorporate the NRA in Texas,” wrote NRA CEO and executive vice president Wayne LaPierre in a statement Friday announing the filing.
He added that “no major changes are expected to the NRA’s operations or workforce.”
LaPierre also said that the NRA is not insolvent and the move to Texas would make the organization stronger. “We are as financially strong as we have been in years,” he said.
He added that the organization has no plans at this time to move the NRA headquarters from Fairfax, Virginia.
The NRA said it expected to emerge from bankruptcy within six months, and in a letter to its vendors said it will “propose a plan providing payment in full of all valid creditors’ claims.”
“The NRA will move quickly through the restructuring process. Its day-to-day operations, training programs, and Second Amendment advocacy will continue as usual, which means the NRA will continue to rely on the service of its valued vendors,” the letter said.
New York Attorney General Letitia James said in a statement that the state will review the NRA’s filing, but added: “We will not allow the NRA to use this or any other tactic to evade accountability and my office’s oversight.”
“The NRA’s claimed financial status has finally met its moral status: bankrupt,” she added.
James’s lawsuit accuses the NRA’s leadership of diverting millions for their own personal use, resulting in a $64 million loss to the organization.
Gun safety organizations characterized the NRA’s decision to file bankruptcy as a “desperate maneuver.”
“Let’s be clear about what’s happening here: The NRA — which is losing power and hemorrhaging money — is now filing for bankruptcy in an attempt to escape legal culpability for years of financial mismanagement and illegal self-dealing,” John Feinblatt, president of Everytown for Gun Safety, wrote in a statement Friday.
“This desperate maneuver is a de facto admission of guilt,” he added.
Similarly, Shannon Watts, founder of Moms Demand Action, said that the NRA could attempt to “run from its years of deception, decadence, and self-dealing, but it can’t hide.”
“The NRA has become a front group for gun manufacturers and a personal piggy bank for its leadership - all while endangering millions of lives. They’ve been out of touch with the American people for decades, and now they’re out of money, too,” Watts said.
In a statement issued last August, when she sought to dissolve the group, AG James said that, “The NRA’s influence has been so powerful that the organization went unchecked for decades while top executives funneled millions into their own pockets.
“The NRA is fraught with fraud and abuse, which is why, today, we seek to dissolve the NRA, because no organization is above the law,” she added at the time.
James is asking a court to dissolve the NRA and require each of the current and former executives named in the suit to pay full restitution.
NRA president Carolyn Meadows said in a statement at the time of that filing that the suit is “a baseless, premeditated attack on our organization and the Second Amendment freedoms it fights to defend.”
The suit is another step in a long-running battle between New York and the gun-rights group, which has been chartered in the state since 1871.
CNBC’s Tucker Higgins contributed to this report from New York. Dan Mangan reporte from New York.
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