Credit Slips blog summary

It’s published by a law professor specializing in credit and bankruptcy

https://www.creditslips.org/creditslips/2021/05/nra-bankruptcy-petition-dismissed.html#more

“The outcome—which was pretty easy to predict from the get-go—also tees up the question of “what the hell were they thinking?” The NRA’s bankruptcy strategy—and implementation—always seemed remarkably hare-brained. If you’re going to do a sketchy filing, the lesson from SGL Carbon was don’t tell everyone that you’re solvent and doing the filing to stiff a single creditor in your press release. Yet, that’s exactly what the NRA did. Additionally, the pre-filing governance moves were really iffy (never telling the board of directors!), the creation of a forum-shopping sub completely blatant, and the NRA and its counsel never had their story straight about why they were filing. I doubt there will be any sort of malpractice claim here (and the problems might have been as much from the NRA-side as from the counsel-side), but if the NRA does file again subsequently, such a claim would, of course, be an asset of the estate.”

The part about never having the story straight about why it was filing is particularly true. NRA leadership told the court — and the world — that it was filing in order to escape the Attorney General’s suit and to “dump New York.” Yet in his closing argument, NRA’s attorney protested that it was NOT seeking a “litigation advantage,” and asked how anyone could believe that, when there was no litigation advantage to be gained.

So why did you file? We can only guess that the lawyers saw the prospect of a wealthy client who wasn’t adverse to paying big fees, and thought of nothing else. Not even the most core ideas: 1. What do we want from the court? 2. is that something the court can legally give us? This expensive move wasn’t hare-brained; rabbits have more sense than that.