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Judge expected to rule whether or not NRA can file for bankruptcy, could pave way for move to Texas

Wayne LaPierre, Executive Vice President and Chief Executive Officer of the NRA, arrives prior to a speech by US President Donald Trump at the National Rifle Association (NRA) Annual Meeting at Lucas Oil Stadium in Indianapolis, Indiana, April 26, 2019. (Photo by SAUL LOEB / AFP) (Photo credit should read SAUL LOEB/AFP/Getty Images via CNN)

 (CNN) — The financial future of the National Rifle Association is playing out in a contentious battle in a Texas courtroom.

The country’s largest gun lobbying group is hoping a federal judge will grant it bankruptcy protection, allowing the NRA to reincorporate as a Texas nonprofit.

This follows the group’s announcement in January that it was leaving New York to exit, “a corrupt political and regulatory environment.”

A judge is expected to rule in the case next week.

In an announcement earlier this year, the NRA said it was “in its strongest financial condition in years,” but the restructuring will help to “streamline costs and expenses.”

New York prosecutors say the Chapter 11 announcement is just a ploy for the organization and its leadership, including CEO Wayne LaPierre, to evade the legal troubles brought on by a recent lawsuit filed by New York Attorney General Letitia James.

“The process Mr. LaPierre followed to file these bankruptcy cases is itself a master class in bad faith and dishonest conduct,” Assistant New York Attorney General Monica Connell said in her opening statements Monday.

In August 2020, James sued the NRA — which is registered as a nonprofit in New York — seeking to dismantle the organization and accused senior leadership of violating state charity laws by using millions for personal use and tax fraud.

James singled out LaPierre in the suit.

“In his nearly three decades as executive vice-president, Wayne LaPierre ran the day-to-day operations of the NRA and exploited the organization for his and his family’s financial benefit, and the benefit of a close circle of NRA staff, board members, and vendors,” James said in a press announcement.

The NRA called James’ suit “politically motivated” and counter-sued her office later that month.

In testimony, LaPierre defended his use of a friend’s yacht, named “Illusions,” staffed with a crew and cook, as necessary for his security after a number of school shootings including at Sandy Hook Elementary in 2012 and Parkland in 2018.

LaPierre was questioned in testimony about why he didn’t pay the boat’s owner, Hollywood producer Stanton McKenzie for its use.

“I was basically under presidential threat without presidential security in terms of the number of threats I was getting … and this was the one place that I hope could feel safe, where I remember getting there going, ‘Thank God I’m safe, nobody can get me here,’ ” LaPierre stated in his deposition.

His defense quickly provided material for gun control advocates to mock.

Activist Shannon Watts, founder of the grassroots group Moms Demand Action, said on Twitter: “The only thing that stops a bad guy with a gun is a good friend with a yacht?” — a tease to LaPierre’s notorious tagline, “The only way to stop a bad guy with a gun is a good guy with a gun.”

Another issue addressed in the bankruptcy trial is why LaPierre didn’t tell senior officials in the NRA about the bankruptcy filing, including its chief legal counsel.

If the NRA is denied the bankruptcy filing, it would be another blow to the pro-gun group which is already facing a shift in support in the wake of more mass shootings in the United States.

It would also come on the heels of the Biden administration’s multi-prong plan to pass gun legislation.

“Gun violence in this country is an epidemic,” the President said in a news conference Thursday.

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