NRA Foe Seeks Dismissal of Bankruptcy, Citing Bad Faith

Gun News

Ackerman McQueen Inc., the ad agency at odds with the National Rifle Association, claims the gun lobbyist’s bankruptcy was filed in bad faith and should be dismissed.

The NRA “did not file this bankruptcy for a legitimate goal of reorganization,” lawyers for Ackerman McQueen wrote in court papers Wednesday, citing the group’s public statements about its financial strength and goal of re-incorporating in Texas. “The NRA’s acts and omissions mandate the dismissal of this bankruptcy on the grounds that the filing was made in bad faith.”

The gun rights lobbyist and the ad agency have been embroiled in a complex legal battle since 2019, the same year the pair cut ties. The NRA has said it needs the protection of bankruptcy court to consolidate a raft of lawsuits. But Ackerman McQueen, which said it’s the group’s largest unsecured creditor, contends those litigation issues are “self-imposed,” pointing to several lawsuits it said the NRA has itself initiated.

“It’s a disappointing, but predictable, response from a terminated vendor and defendant in litigation involving significant claims of wrongdoing,” Michael J. Collins, a lawyer for the NRA, said in an emailed statement. “We will continue to operate within the parameters of the bankruptcy court — to the benefit of the NRA, its members, and its vendors.”

Fraud Allegations

The motion to dismiss comes after a former director for the organization called for an investigation into fraud allegations made against the NRA by New York regulators. Phillip Journey, a Kansas judge and former state legislator, this week asked the NRA’s bankruptcy judge to appoint an independent investigator to determine the truth of claims.

The NRA’s bankruptcy filing last month raised eyebrows among restructuring professionals in part because of the politically charged public statements and claims of financial strength Ackerman McQueen is targeting. The NRA has said the filing will help it exit “a corrupt political and regulatory environment in New York.”

A pending lawsuit from New York Attorney General Letitia James threatens the NRA with dissolution. The group’s bankruptcy attorney has said it will continue to fight the lawsuit.

Ackerman McQueen cites the allegations in the New York lawsuit in its request to dismiss the bankruptcy case. The ad agency also asked for a court-appointed trustee to take control of the NRA if its bankruptcy judge won’t toss the case.

The case is National Rifle Association of America, 21-30085, U.S. Bankruptcy Court for the Northern District of Texas (Dallas). To view the docket on Bloomberg Law, click here. Michael R. Bloomberg, founder of Bloomberg News parent Bloomberg LP, is a donor to candidates and groups that support gun control, including Everytown for Gun Safety.

© Copyright 2021 Bloomberg News. All rights reserved.

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