NRA Must Face New York Fraud Lawsuit Seeking to Dissolve It
Bloomberg 1/21/2021 Erik Larson
(Bloomberg) The National Rifle Association was ordered to face a fraud lawsuit New York filed to dissolve the gun rights group for allegedly ripping off donors, even as the NRA pursues protection from creditors in bankruptcy court.
A New York judge on Thursday denied the NRA’s request to dismiss the suit by New York Attorney General Letitia James after saying last week’s bankruptcy filing was unlikely to derail the case. The judge said that since it’s in state court, he felt free to proceed with the hearing. Federal judges usually place a hold on litigation against debtors to give them breathing room to reorganize.
Thursday, January 21, 2021
The January 15, 2021 bankruptcy petition filed by the National Rifle Association of America (NRA) in the Northern District of Texas poses important tests of the rules for determining proper venue in a bankruptcy case and the standard for determining whether a bankruptcy petition has been filed in good faith.
By filing in Texas, the NRA, a New York entity with its principal place of business in Virginia, is relying on the fact that its subsidiary Sea Girt LLC was formed under Texas’ limited liability company law. Typically, a company may file for bankruptcy in any venue that would be available to any one of its affiliates, and the NRA is relying on its Sea Girt affiliate’s presence in Texas in this case. But the complicating factor for the NRA’s choice of venue is that Sea Girt does not appear to have been formed until November 24, 2020
NRA Runs to Texas But Perhaps Cannot Hide With Bankruptcy
Bloomberg 1/20/2021 Jeremy Hill, Steven Church and Alex Wolf
(Bloomberg) The National Rifle Association is about to find out what happens when its no-holds-barred embrace of the Second Amendment comes up against the U.S. Bankruptcy Code.
The group is seeking to sidestep New York’s regulators and the state’s fraud lawsuit by filing for bankruptcy in Dallas and moving to gun-friendly Texas, citing support for the right to bear arms. But the case filed last week may face a load of legal challenges at an initial court hearing Wednesday that could undermine the NRA’s plan or even add to its woes.
More hotel bankruptcy filings might be on the horizon as lenders lose patience dealing with defaults. Bloomberg | Jan 19, 2021
(Bloomberg) Hotels operators are filing for bankruptcy at a faster pace in the U.S. amid a resurgence of Covid-19 infections that clouds the outlook for sustained recovery. More may be on the horizon as lenders lose patience with defaulting property owners.
A unit of Eagle Hospitality Real Estate Investment Trust, which owns a portfolio of corporate, leisure and airport hotels across the U.S., filed for bankruptcy protection in Delaware on Monday amid a collapse in travel due to the pandemic. It followed Marriott Wardman Park in Washington, which filed for court protection from creditors last week, joining the bankruptcies of two hotels in Brooklyn in December and Manhattan’s Martinique New York in September.
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