NRA Board Retroactively Approves Bankruptcy Plan as Trial Approaches

Leadership calls vote 'overwhelming,' board dissenters call bankruptcy 'snipe hunt' 

NRA headquarters / Getty Images
March 29, 2021

DALLAS—The National Rifle Association's board of directors retroactively approved the group's bankruptcy plan after an emergency meeting on Sunday.

The decision was not without drama: Board members locked themselves behind closed doors in an "executive session" for hours before delivering the final verdict, and executive vice president Wayne LaPierre left through a separate exit from where press was waiting.

A copy of the resolution obtained by the Washington Free Beacon said the Chapter 11 bankruptcy filing initiated by LaPierre in January advances "the best interests of the NRA, its members, and its mission." The board addressed questions on the legitimacy of the bankruptcy raised by New York attorney general Letitia James (D.)—who has moved to scuttle the bankruptcy to advance her prosecution of the group in state court—by saying the declaration is "authorized, directed and ratified" by the board. The resolution further approved the appointment of attorney Bill Brewer's law firm as the group's general bankruptcy counsel in a rebuke to conflict of interest allegations made by the Department of Justice.

The resolution also allows for the NRA to retain Brewer and the other attorneys involved in the case should it be dismissed and then refiled. The resolution could help the NRA in court. With at least a majority of the board voting to officially ratify the bankruptcy filing it becomes more difficult for James to argue NRA leadership lacks board support in the case. The move makes it less likely James will succeed in getting the case thrown out.

NRA first vice president Charles Cotton, who attended the meeting, described the resolution adopted by the board as "a vote of confidence for the Association’s reorganization strategy" in a statement to the Free Beacon. 

"The message is loud and clear: The NRA board is united in support of the course set by its leadership," Cotton said. "The vote erases any doubt about the NRA’s energy, focus and commitment to advance its strategy—or determination to defend Second Amendment freedom." 

Cotton said the resolution passed "overwhelmingly" but did not give an official count of the vote, which took place behind closed doors.

Phillip Journey, a board member who has accused NRA lawyers of misleading supporters, said the resolution represented an admission that the board was kept in the dark about bankruptcy. The Kansas family court judge has challenged the legitimacy of the bankruptcy. He said approving the bankruptcy after the fact was "like pleading guilty with an explanation." 

Rocky Marshall, another NRA board member present at the meeting, called the resolution an "awkward attempt to ratify the Chapter 11 bankruptcy." He said he believed the bankruptcy was "financially unnecessary" and questioned the millions of dollars spent on the Brewer firm. 

"This entire episode appears to be an elaborate snipe hunt and the NRA is left holding an empty bag," Marshall said. "The bankruptcy appears to be an attempt to find a safe harbor from the NYAG suit and a vehicle for the Brewer law firm to continue extracting assets from the NRA. The Brewer law firm claims to fight to protect the NRA, but I wonder who is protecting the NRA from the Brewer law firm? " 

Journey and Marshall have filed a brief alongside fellow board member Owen "Buz" Mills and former board member Esther Schneider asking for the bankruptcy court to appoint an independent examiner to look at the group's finances, as well as a request on March 26 to create a committee of NRA members to provide guidance over how the bankruptcy should unfold.  

The continued infighting comes as NRA lawyers were granted an extra week to pursue a potential settlement with James ahead of the bankruptcy trial. 

"I'm not going to tell you to stop holding your breath on a settlement but I do think the parties are acting in good faith and trying to see if there's middle ground as they relate to our dispute," NRA lawyer Gregory Garman told Judge Harlin Hale on Thursday.

Garman described the talks between him and Gerrit Pronske, who represents James in the bankruptcy case, as a "delicate but potentially fruitful discussion." Pronske confirmed to Hale that the two sides were trading settlement proposals. 

James wants the bankruptcy case thrown out because she argues it was filed in bad faith and without board approval. The bankruptcy filing has not stopped her case against the group in New York, where she seeks to completely dissolve the gun group over accusations of financial impropriety. The proceedings could complicate her efforts to get at the group's assets. NRA leadership has consistently held that James's prosecution is motivated by politics. 

The NRA did not respond to questions about the status of the negotiations with James or why the talks were not mentioned during the meeting.