U.S.A. –-(AmmoLand.com)- A motion has been filed with the U.S. Bankruptcy Court by a member of the National Rifle Association’s Board of Directors asking the court to appoint an independent examiner to investigate fraud allegations made against the NRA by New York regulators in the ongoing legal drama in which the association is being sued by New York Attorney General Letitia James.
Phillip Journey, who was elected last year to the NRA board, and who also served on the board in the 1990s, filed the motion in U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division. Journey is a district judge in Sedgwick County, Kansas, and formerly served in that state’s legislature.
In a telephone conversation, Journey referred Ammoland News to the 16-page motion, which was submitted by attorneys with Bonds, Ellis, Eppich, Schafer, Jones LLP in Dallas. Journey said he took the action independently from the NRA, which is fighting the lawsuit and has counter-sued James.
In her lawsuit, James is seeking to dissolve the NRA.
NRA also recently announced intentions to terminate its corporate existence in New York and “reconstitute the organization” in Texas. NRA has filed for Chapter 11 bankruptcy as part of this strategy while insisting that the organization is financially sound.
NRA revealed its plans in mid-January with an open letter to members. In that announcement, NRA stated, “Today, the NRA announced a restructuring plan that positions us for the long-term and ensures our continued success as the nation’s leading advocate for constitutional freedom – free from the toxic political environment of New York.
“The plan can be summed up quite simply: We are DUMPING New York, and we are pursuing plans to reincorporate the NRA in Texas.
“To facilitate the strategic plan and restructuring, the NRA and one of its subsidiaries have filed voluntary chapter 11 petitions in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. As you may know, chapter 11 proceedings are often utilized by businesses, nonprofits and organizations of all kinds to streamline legal and financial affairs.
“Under the plan, the NRA will continue what we’ve always done – confronting anti-gun, anti-self-defense and anti-hunting activities and promoting constitutional advocacy that helps law-abiding Americans. Our work will continue as it always has. No major changes are expected to the NRA’s operations or workforce.”
A few paragraphs later, the message stresses, “The NRA is not insolvent. We are as financially strong as we have been in years.”
In a new development, Ackerman McQueen, “the largest unsecured creditor” in the NRA’s Chapter 11 filing, has entered a motion to dismiss the bankruptcy petition. That motion was filed in the same court in Texas where NRA filed its January petition. In its motion, Ackerman McQueen argues “assuming the NRA is even entitled to the equitable relief bankruptcy provides, and that it even needs to reorganize at all, an independent fiduciary appointed by the Court is the best person to lead this bankruptcy, report to the Court and creditors and investigate, as necessary.”
In the new court filing, Journey is described as a devoted member who “wholeheartedly supports the NRA’s originalist principles and philosophies.”
Journey’s motion was filed “to bring to light the veracity of the alleged fraud, dishonesty, incompetence, and gross mismanagement that has plagued the NRA’s reputation caused significant alienation of the Association’s members and supporters, and hampered its ability to fulfill its core organizational purpose.”
In the motion, NRA and a Texas-based entity identified as Sea Girt LLC are identified as “Debtors.” On Page 4 of the motion, it states:
“Upon information and belief, the Debtors have been engaged in placing the interests of their existing management over the interests of the Debtors.
“Upon information and belief, the NRA has engaged in actions that violate its fiduciary duties under the laws of New York and upon reason and belief many of such violations would also be violative of Texas law.”
NRA’s “outside attorney” William A. Brewer III issued a statement that seemed to scold Journey for filing his motion. The statement was quoted by the Wall Street Journal.
“Judge Journey purportedly supports the mission of the NRA and claims not to oppose the Association seeking to reincorporate in Texas,” Brewer said. “Unfortunately, he seems to mistakenly believe the NRA reorganization plan did not follow board and internal protocol. This plan was undertaken in full compliance with NRA policy.”
But Journey’s motion suggests otherwise, asserting, “New York law, the NRA bylaws, and Robert’s Rules of Order were routinely violated by the NRA’s management. These egregious violations have led to the resignation of one or more board members.”
The motion further alleges, “Also, in direct violation of the NRA’s own bylaws, the board of directors did not approve the formation of Sea Girt, LLC, the new corporation created by the NRA to bootstrap this filing into this district and venue.”
The motion also complains that MRA management “failed to answer routine questions raised by board members in the wake of the allegations of the New York Attorney General.”
As reported by Bloomberg News, “Under the U.S. Bankruptcy Code, a judge can appoint an examiner with broad powers to investigate a bankrupt corporation, including actions taken by its employees. Examiners typically file detailed reports that creditors use to file lawsuits, and judges consult to decide thorny legal questions.”
Not surprisingly, with the NRA appearing vulnerable, gun prohibition lobbying groups are moving in to exploit the situation and push their agenda. According to the Palm Beach Post, Shannon Watts—founder of Moms Demand Action, a vocal gun control group affiliated with anti-gun billionaire Michael Bloomberg’s Everytown for Gun Safety—recently declared, “It has been 25 years since the federal government passed a gun safety law. That wait is over.”
While the newspaper erroneously refers to the Moms group as a “gun safety organization,” the group supports what many consider extremist legislation including bans on so-called “assault weapons” and “high capacity magazines,” plus licensing and registration requirements, so-called “universal background checks” and other measures which criminals consistently ignore.
All of this is happening while state legislatures are in full swing and the country is still waiting for Joe Biden to unleash his restrictive gun control agenda. While Biden had promised swift action upon moving into the Oval Office, he has been busy issuing executive orders that conservatives claim will ruin the national economy and put tens of thousands of people out of work.
However, Biden’s history on gun control is a matter of record. He’s not going to forget his gun control plans, and with NRA distracted, if not weakened by its legal woes, Biden will strike at some point, veteran gun rights activists agree. It’s just a matter of “when” rather than “if.”
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About Dave Workman
Dave Workman is a senior editor at TheGunMag.com and Liberty Park Press, author of multiple books on the Right to Keep & Bear Arms, and formerly an NRA-certified firearms instructor.
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