NY Suit to Dissolve NRA: Answers and Motions Filed

NRA as a corporation filed a motion to dismiss six of the 18 counts against it. The remainder don’t have to be answered until the motion is decided. We showed it to attorney friends, and there were underwhelmed, especially with the argument that since the bankruptcy judge thought NRA had mostly cleaned up its act, NY should not be able to sue and the NY court must comply and accept those findings. They were also not impressed at how many arguments amounted to “NY did not plead enough details,: when the complaint is over 160 pages long. “Even if you win the motion, New York will just move to amend the complaint, and add in all the detail that you argued was missing,” one attorney said.

There is a little irony on p. 19:

“And, where liability of a corporation is to the State and not for damages to a third party, misconduct by officers is not properly imputed to a corporation “where the corporation is actually the victim of a scheme undertaken by the agent to benefit himself or a third party personally, which is therefore entirely opposed (i.e., ‘adverse’) to the corporation’s own interests.” Nowhere does the Amended Complaint allege that the purported looting and self-dealing allegedly engaged in by the individual defendants furthered the NRA’s business. Nowhere does the NYAG explain how the alleged false financial filings, which were not alleged to have been reviewed or approved by the Board, advanced the NRA’s business by omitting portions of director income.”

One of the lawyers tried to parse that, and came up, “he seems to be saying that NRA should not be blamed if LaPierre and the others are found to have been pocketing the NRA funds, if it can be shown they were out solely to line their own pockets and not to help NRA a little on the side. Then they were just a band of thieves out to loot NRA without helping it any, and their misdeeds should not be blamed on the organization. But from what you say, the board has been approving their decisions, giving them bonuses, getting rid of their enemies. The Attorney General will make mincemeat of that argument. If what they were doing didn’t benefit NRA, why were they getting rewarded by its board?”

Wayne LaPierre filed a motion to dismiss, based on fine points of NY law; our friends knew nothing there. John Frazer did the same.

Josh Powell filed an answer, which doesn’t give much information.

Woody Phillips filed an answer, which does the same. It does have some admissions. P. 20, “Phillips admits that the NRA paid certain sums of money to HomeTelos and that he had a friendship with the CEO of HomeTelos, but otherwise denies knowledge or information sufficient to form a belief. . . .” The stories suggested that it was more than “friendship,” and the complaint says $1.4 million was given her company. P. 21, “Phillips admits that he entered into a consulting agreement with the NRA, and refers the Court to the agreement. . . .” “Phillips admits that he submitted certain monthly invoices to the NRA to by paid to WHIP LLC, and that WHIP LLC received certain payments from the NRA, but otherwise denies knowledge or information sufficient to form a belief. . . .” The complaint says that Phillips’ company was paid $33,500 a month, and that he actually provided no consulting services to NRA. Hush money, in other words.

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