Should NRA Sue for Legal Malpractice?

I had dinner last night with a friend, a lawyer who does a lot of bankruptcy work for debtors, often corporations, and keeps track of the law in that area. He repeated what he’d told me before, that if NRA had any guts, they’d demand a return of all or most of the retainer they paid their bankruptcy attorneys. Tonight he suggested that they ought to investigate filing a malpractice suit.

“Everyone knows that “bad faith filing” will get a Chapter 11 dismissed. A Chapter 11 bankruptcy means you’re not insolvent, but will be soon unless the court steps in to help you, keep the creditors at bay for a time, let you get out of stupid contracts, that sort of thing. Bad faith means filing for some purpose other than that. In particular, it means filing to get a litigation advantage, something like “let us escape the Attorney General’s lawsuit by shifting our state of incorporation to Texas so she can’t dissolve us.” That’d be the ultimate case of using Chapter 11 for the wrong purpose, to escape a lawsuit. Add in that NRA’s CEO told the court that NRA was in the best financial shape it’d been in in years. Then what are you doing in bankruptcy court? If that’s true, you’re neither insolvent nor likely to become insolvent. And that NRA’s press release told the world that it was doing this to “dump New York” and get away from the Attorney General’s suit. That was a confession to bad faith filing.”

He went on, “NRA’s law firm says it specializes in Chapter 11s. It is impossible, totally IMPOSSIBLE, that it didn’t know this. It took on a case it had to know, HAD to know, would be lost.”

“It probably told NRA, not that the case was a sure loser, but that it was a brilliant plan to escape the New York Attorney General. Sure sounds like malpractice to me. Hell, you might get punitive damages for that. Giving bad advice, that you know is bad advice, just to lay hands on a big retainer. If I was on the jury, I’d be willing to go for punitive damages.”

He’d read this blog, the postings on the trial. “The attorney was down at the end to arguing they weren’t seeking a litigation advantage, when his own client had said in the press release that that was the whole idea, and when it was obvious that, if bankruptcy didn’t gain an advantage against the Attorney General, there was no reason to be in bankruptcy court. That’s like arguing in a criminal case that “my client says he didn’t commit the burglary, what reason would he have to lie about it?””

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2 thoughts on “Should NRA Sue for Legal Malpractice?

  1. The way the NRA has paid for (in my opinion) piss poor legal services the past few years, it’d be nice to see it sue to claw back that money. It won’t as long as Wayne calls the shots on the Board, but sooner or later even Marion Hammer has to see that Wayne is killing the organization.

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