NRA Bankruptcy Control is Getting Dicey for Entrenched Leadership
Article first appeared on Ammoland.com
NRA officials have made multiple public statements to the effect that the organization is in solid financial shape, and the bankruptcy is just being used as a legal tool for moving the Association’s charter out of the unfriendly environs of New York, where it has been located since the group’s inception 150 years ago, and into the much more welcoming environment of Texas, home of some 400,000 NRA members.
Since the bankruptcy filing, there has been a lot of speculation and second-guessing, and there have been a lot of rumors flying and briefs filed. I don’t think anyone could accurately report on everything that’s been going on, and certainly not on what might happen next, but here is what I think I know so far, along with some speculation on what could happen.
I feel obligated to remind readers that I am not an attorney, and I have very limited knowledge about bankruptcy proceedings, so there’s a good chance that I could get some of the technical details wrong. Anyone with verifiable expertise in bankruptcy law is invited to reach out to me to correct any errors I make, and I will pass that information on to our readers.
On January 15, 2021, Wayne LaPierre filed chapter 11 bankruptcy on behalf of the NRA.
This was done unilaterally by LaPierre, with the blessings of the NRA President and its two vice presidents, but without any vote, or even discussion, by the NRA Board of Directors.
Though there was immediate speculation about the filing being in “bad faith” and being a ploy to dodge various lawsuits, in particular a potentially crippling lawsuit brought by the state of New York, the judge in the case has allowed the bankruptcy procedure to advance, and NRA has publicly stated that they are not seeking to avoid the New York suit.
One of the early steps in the bankruptcy process was for the judge to name a Creditor Committee to represent the creditors in the action. The court chose 5 creditors to be on the committee: The Pension Benefits Guarantee Corporation (a government agency which, among other things, insures pension benefits), Ackerman McQueen (NRA’s long-time PR company, with whom they had a dramatic falling out in 2019, with lawsuits pending), InfoCision Incorporated (NRA’s long-time telemarketing and fundraising partner, whom they paid some $21 million dollars in 2019, and which is still working for the Association), Stone River Gear, LLC (a wholesaler of knives, flashlights, and other outdoor gear. I’m not clear on their current status as an NRA vendor), and David Dell’Aquila (the major donor who has led a donor revolt and filed a class-action lawsuit accusing NRA and its leaders of fraud).
Dell’Aquila feels strongly that the problems at the NRA all lay at the feet of Wayne LaPierre and his supporters on the Board. He has already declared his intention to ask the judge to appoint a trustee to take over management of the Association and supervise its reorganization. He seems pretty confident that he can get Ackerman McQueen to join him in that request, but I suspect there could be resistance from InfoCision and Stone River Gear, as those two appear to still be doing business with the NRA, and could possibly be supportive of the current regime. InfoCision, in particular, considering how much money they’ve made year after year from the NRA, probably isn’t anxious to see any major regime change. If I were the judge, I’d be looking closely at them, to be sure that they’re not in the creditor pool by design, to support the status quo.
NRA’s lead attorney, Bill Brewer, has disparaged the inclusion of Dell’Aquila on the Creditor Committee, referring to him as a “disgruntled individual who has filed frivolous claims against the Association.” Brewer has also filed to have his firm be supplemental, Special Counsel, in the bankruptcy case. NRA hired a bankruptcy specialty firm to represent them, but now Brewer claims that he and his firm, which is NRA’s largest contractor, pulling down something in excess of $2 million per month, have historical knowledge that isn’t easily transferable and will be useful. Skeptics might suggest that it’s just one more way for Brewer, whose basic rate is $1400 an hour, to generate more billable hours to charge to NRA.
NRA Examiner Appointment Request Motion
The latest twist has been the filing of a motion by NRA Board member Phil Journey, (embedded below and well worth a read) calling for the appointment of an Examiner (investigator), to explore the various accusations of corruption, mismanagement, cronyism, and financial misdeeds on the part of executives, as well as questionable vendor contracts, and failure of the Board to fulfill its fiduciary responsibilities. Regular readers will be familiar with Phil Journey, as he has been a contributor to AmmoLand News.
Based on Journey’s filing, it looks like the judge must appoint an Examiner unless there is a Trustee appointed. Appointing an Examiner is considered a somewhat less drastic step, and could be a preferred choice for the judge, who might be reticent to take the major step of appointing a Trustee. As I understand it, the judge can appoint a Trustee at some later date, if the evidence the Examiner turns up were to warrant such a step.
NRA Examiner Appointment Request Dkt. No. 114
The NRA leadership has already come out with criticism of Journey’s motion. In an email to Board members, under the signature of President Carolyn Meadows, the leadership declared the filing to be unfortunate and claimed that Journey is mistaken in his interpretation of certain of the Association’s Bylaws. Journey had pointed out in his motion that the Bylaws strongly suggest that any really big decisions affecting the Association, should not be undertaken by the staff, or even the Executive Committee of the Board, but should be brought to the entire Board for a vote if at all possible. It’s apparent that plans for the bankruptcy declaration go back at least to mid-November when the shell company in Texas was created to give the Association a toehold there. That means that LaPierre and the officers had two opportunities to bring the matter to the Board, but chose to keep it under wraps.
The email went on to accuse Journey of flat-out lying in the motion when he included among the accusations deserving of investigation, a claim that a female director was told to “sit back and shut-up” when she tried to ask questions about NRA finances.
Seems funny that this particular accusation was declared to be a lie, while the accusations of extortion, self-dealing, theft, abuse of power, and failure of the Board to properly exercise their fiduciary responsibilities, were all left unchallenged.
The email makes it clear that Journey has ruffled the feathers of the powers that be within the NRA hierarchy, and that his motion throws a monkey wrench into their plans. I think they believed they could beat Dell’Aquila’s push for a Trustee, but I don’t think they’ll be able to block Journey’s, a current NRA Board member with valid standing claims, motion for an independent court-appointed Examiner.
It is worth noting that Journey and I have been friends for many years, and he and my father, Neal Knox, were friends as well. Phil was first elected to the NRA Board back in 1995, with Dad’s support, but lost his bid for reelection in 1998, after LaPierre had gained the upper hand and began purging “Knox supporters” from the Board. Not only is Phil a true gun guy – collector, competitor, youth coach, hunter, and all-around firearm enthusiast – he is also a very competent attorney, former State Senator with a stellar track record of pro-rights achievements in the Kansas State Senate, an accomplished talk show host, and he currently serves as a District Judge in Kansas. This guy ain’t no slouch.
Journey’s motion for an Examiner, as well as Dell’Aquila’s call for a Trustee, can be reasonably compared to the voter fraud questions that have been raised around the country: If everything was all done on the up-and-up, then all sides should support a thorough investigation and audit by an independent, neutral third party, which would definitively either prove corruption or prove there’s not any. Just saying “Trust us… Everything’s fine,” while blocking efforts to investigate the accusations, isn’t instilling any confidence – in voters or NRA members – and confidence is what’s really needed.
Judge Phil Journey isn’t looking for any position for himself in this matter. He’s working solely for the benefit of the members and the NRA. He’s not independently wealthy and doesn’t have big money donors backing his play – yet. He has received some financial assistance from a few NRA supporters, but he’s paying the full retail price for the top-notch bankruptcy law firm he’s retained to represent him in Texas, so he’s going to need much more help from many more people. A formal, legal assistance fund is expected to be set up soon, and I’ll keep you posted about that.
The other thing that would really help to move this case forward, would be for people with knowledge of corruption and misdeeds within the NRA, to step forward and be whistle-blowers, providing details to Phil for presentation to the judge or the Examiner.
I think this is the best opportunity we’ve had in decades to finish the work that was started in Cincinnati in 1977, and finally, put the members back in charge of the NRA. Let’s get it done.
About Jeff Knox:
Jeff Knox is a second-generation political activist and director of The Firearms Coalition. His father Neal Knox led many of the early gun rights battles for your right to keep and bear arms. Read Neal Knox – The Gun Rights War.
The Firearms Coalition is a loose-knit coalition of individual Second Amendment activists, clubs, and civil rights organizations. Founded by Neal Knox in 1984, the organization provides support to grassroots activists in the form of education, analysis of current issues, and a historical perspective of the gun rights movement. The Firearms Coalition has offices in Buckeye, Arizona, and Manassas, VA. Visit: www.FirearmsCoalition.