NRA Shows their Petticoats, and the US Trustee Objects to Brewer
Article first appeared on Ammoland.com
U.S.A. –-(AmmoLand.com)- The judge in the NRA’s Chapter 11 bankruptcy case, has set March 9th, 2021, as the date for hearing most of the early motions. That’s the day when we should find out whether the judge is going to throw the case out altogether or allow it to continue.
The first item on the agenda for that hearing is supposed to be Phil Journey’s motion to have an Examiner appointed to investigate the litany of accusations made against the Association’s executives and officers. Journey was elected to the NRA Board last year and raised the ire of NRA leadership with his motion. That was followed by a motion from Ackerman McQueen, calling for the bankruptcy to be dismissed, or if not dismissed, for a Trustee to be appointed. That motion was echoed the next day in a motion from the NY AG’s office.
The difference between a Trustee and an Examiner is, to a large extent, up to the judge and what powers and scope he wishes to give to either, but typically, an Examiner investigates, while the company continues to be run by its normal leadership, while a Trustee typically replaces the corporate leadership, taking control of the company and its operations.
It seems likely that the judge if he decides to allow the bankruptcy to proceed, will appoint an Examiner to investigate and report back on any chicanery. Then the judge can use that information to decide whether to appoint a Trustee or broaden the powers of the Examiner. It’s also worth noting that a Trustee costs a whole lot more, and those costs would fall on the NRA.
That was the big news from last week. This week, the NRA filed their required statements of assets and liabilities, revealing some interesting numbers. The US Trustee office, a government agency that handles administrative matters for bankruptcy courts, filed an objection to a request that Brewer Attorneys and Counselors be allowed to be a special counsel to assist the NRA’s primary bankruptcy attorneys. And one of the NRA’s top vendors, a company called Membership Marketing Partners, filed a motion asking the judge to order the US Trustee to dissolve the current Creditor Committee and appoint a new committee of creditors.
There’s a lot to unpack in these filings, and a lot of it is deeply intertwined, so let’s start with the last filing first.
The Creditor Committee is comprised of a sampling of major creditors and is tasked with advising the judge on behalf of all of the creditors. The Committee is selected by the US Trustee office, and they chose the Pension Benefits Guarantee Corporation, Ackerman McQueen, InfoCision Inc., Stone River Gear, and David Dell’Aquila. For more information about these creditors, read my previous article about the NRA bankruptcy here.
Membership Marketing Partners (MMP) wants Ackerman McQueen, Dell’Aquila, and the Pension Benefits Guarantee Corp., replaced with creditors more like MMP and InfoCision. MMP is a direct response marketing and fundraising company located inside the NRA headquarters building. They are the ones who write, print, and mail all of those letters telling you that you must send money now or lose your gun rights forever. In 2019 they were paid $11.5 million by NRA, and in the three months, before NRA filed for bankruptcy, they paid Membership Marketing just under $4 million. InfoCision, which is already on the Creditor Committee, is also a current vendor of NRA’s, and they were paid $21.7 million by NRA in 2019, and $4.1 million in the 90 days before the bankruptcy filing.
In other words, MMP and InfoCision are only creditors to the tune of their typical 30-day receivables invoices. They both average around $1 million to almost $2 million per month off of the NRA and have been doing so for years under the LaPierre regime. Why would they want to change anything?
Unlike a typical bankruptcy, where creditors are worried about getting paid, this NRA bankruptcy is not about money, but rather about control. The group currently in control of the NRA wants to remain in control. They think they have a better chance of maintaining that control as a Texas corporation, as opposed to a New York corporation, so they are using the bankruptcy laws as a tool to reorganize the corporation in Texas. Most of their creditors don’t have money at risk, but those engaged in litigation against the NRA, have a serious interest in how this all plays out. It appears that the US Trustee office recognized the unique situation in this bankruptcy, and selected the Creditor Committee accordingly.
If the bankruptcy case gets bounced, those folks will be back in court hoping to salvage something after Letitia James gets through with the NRA. Dell’Aquila has invested well over $100,000 of his own money in the class action on behalf of NRA members, and even if he wins his case, he will not have those expenses reimbursed.
The other interesting filings so far this week, were the NRA’s declaration of assets and liabilities, including the expenses paid in the 90 days prior to filing bankruptcy, and an Objection filed by the US Trustee office to having Bill Brewer’s law firm participating in the NRA’s bankruptcy case.
There are lots of juicy tidbits in the financial disclosure documents, including the fact that Brewer Attorneys and Counselors was paid over $17.4 million in just 3 months. That’s over $5.8 million per month! This revelation dovetails nicely with the Objection filed by the US Trustee Office.
Early in the filings, NRA filed a motion to have Brewer’s firm added as a “Special Counsel” to assist the firm hired to handle the bankruptcy, and that motion was what the US Trustee office has now objected to. In their objection, the Trustee not only points out the fact that Brewer is named as a central figure in several past and ongoing NRA lawsuits, and is married to the daughter of the founder of Ackerman McQueen and sister of that company’s current CEO, but also rips Brewer and NRA for failing to report many of these conflicts as required by law.
In my opinion, I think it’s quite possible that formal complaints against Brewer could be on the way.
Meanwhile, all of this litigation and lawyering isn’t cheap for those of us trying to save the NRA either. As mentioned above, David Dell’Aquila has invested over $100k of his own money in his class-action suit, and there’s no mechanism for making him whole again, except for people who believe in what he’s doing to step up and help him fund it. The last time we spoke, he was looking for a bankruptcy lawyer in Texas to help him maneuver in that court, and that’s going to just add to his expenses.
While a formal fundraising site for Dell’Aquila’s efforts is being developed, The Firearms Coalition will accept and forward (without any fees or commission to us) any contributions readers would like to make to assist with funding that fight. Simply mark contributions as “for Dell’Aquila.”
Phil Journey has also gone out on a limb with financial commitments to lawyers. A tax-exempt fund has already been set up to assist with those efforts, so those interested in contributing to that can send checks to:
CDFE c/o Phil Journey
PO Box 501
Haysville, KS 67060
A portal for credit card donations should be available soon, but in the meantime, anyone wishing to contribute by credit card, and not concerned about getting the tax exemption, can use the Support link at www.FirearmsCoalition.org, tagging donations as “for Journey.”
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.