NRA calls bankruptcy dismissal disappointing, says it 'will continue to fight'

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The National Rifle Association (NRA) has responded to a federal judge’s decision to dismiss its bankruptcy case, arguing that it "will continue to fight on all fronts in the interests of its mission and its members."

In a press release issued after the news of the bankruptcy dismissal, NRA CEO and executive vice president Wayne LaPierre said he was "disappointed in some aspects of the decision" but added, "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," he said. "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." 

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Texas Judge Harlin Hale’s Tuesday decision leaves the powerful gun-rights group to face a New York state lawsuit, brought by Attorney General Letitia James, that accuses it of financial abuses and aims to put it out of business.

Hale was tasked with deciding whether the NRA should be allowed to incorporate in Texas instead of New York, where the state is suing in an effort to disband the group. Though headquartered in Virginia, the NRA was chartered as a nonprofit in New York in 1871 and is incorporated in the state.

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In his written order, he said he was dismissing the case because he found the bankruptcy was not filed in good faith.

"The Court believes the NRA’s purpose in filing bankruptcy is less like a traditional bankruptcy case in which a debtor is faced with financial difficulties or a judgment that it cannot satisfy and more like cases in which courts have found bankruptcy was filed to gain an unfair advantage in litigation or to avoid a regulatory scheme," Hale wrote.

His decision followed 11 days of testimony and arguments. Lawyers for New York and the NRA’s former advertising agency grilled LaPierre, who acknowledged putting the NRA into Chapter 11 bankruptcy without the knowledge or assent of most of its board and other top officers.

"Excluding so many people from the process of deciding to file for bankruptcy, including the vast majority of the board of directors, the chief financial officer, and the general counsel, is nothing less than shocking," the judge added.

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James’ office sued in August seeking the NRA's dissolution following allegations that executives illegally diverted tens of millions of dollars for lavish personal trips, no-show contracts and other questionable expenditures. At the time of the suit, she said the "breadth and the depth of the corruption and the illegality" at the NRA justified its closure.

Lawyers for James argued during the bankruptcy trial that the case was an attempt by NRA leadership to escape accountability for using the group’s coffers as their personal piggybank. But the NRA’s attorneys said it was a legitimate effort to avoid a political attack by James, who is a Democrat.

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LaPierre testified that he kept the bankruptcy largely secret to prevent leaks from the group’s 76-member board, which is divided in its support for him.

Hale dismissed the NRA’s case without prejudice, meaning the group can refile it. He warned that in doing so the NRA’s leaders would risk losing control.

Fox News' Thomas Barrabi contributed to this report, as well as the Associated Press.