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More On Judge’s Ruling In Dissolution Case

I talked to an attorney friend, and he warned, remember the AG can appeal, possibly now, on an emergency basis, or at the end of the entire case. To dismiss, the judge had to rule that, even if the AG proved every word of what she claimed she could prove, she still wouldn’t win. The NY appellate courts may not feel the same way.

On to the ruling itself. What the judge says indicates that the attempts by Frank Tait, Rocky Marshall, and others (I forget if Judge Journey moved to intervene, or distinguished himself in other ways) had an impact on the judge’s thinking. The judge’s ruling turns on his drawing a distinction between NRA as an organization, and NRA’s leadership as individuals. He regards NRA as an organization in a very positive light, and NRA’s leadership as individuals who have fleeced and abused NRA. Some passages from his ruling:

“The Attorney General’s claims to dissolve the NRA are dismissed. Her allegations concern primarily private harm to the NRA and its members and donors, which if proven can be addressed by the targeted, less intrusive relief she seeks through other claims in her Complaint. The Complaint does not allege that any financial misconduct benefited the NRA, or that the NRA exists primarily to carry out such activity, or that the NRA is incapable of continuing its legitimate activities on behalf of its millions of members. In short, the Complaint does not allege the type of public harm that is the legal linchpin for imposing the “corporate death penalty.” Moreover, dissolving the NRA could impinge, at least indirectly, on the free speech and assembly rights of its millions of members.”

“The Complaint does not allege that the misconduct ascribed to the Individual Defendants benefited the NRA, or that the NRA exists primarily to carry out such illegal activity, or that the NRA is incapable of continuing its core charitable mission if the Individual Defendants are removed from their positions.”

“In arguing for dissolution, the Attorney General’s allegations fail to delineate between the NRA, on the one hand, and its leaders on the other, who acted “without regard to the NRA’s best interests.””

“Finally, the Attorney General’s dissolution claims warrant particularly careful scrutiny because they implicate First Amendment concerns. The NRA is a prominent advocacy organization that represents the interests of millions of members who have stuck with it despite the well-publicized allegations in this and other cases. The State-sponsored dissolution of such an entity is not something to be taken lightly or without a compelling need.”

“The Attorney General adequately pleads both claims for breach of fiduciary duty. In several hundred paragraphs of specific factual allegations, the Amended Complaint describes, in meticulous detail, LaPierre’s exploitation of the NRA for his financial benefit, his abuse of power, and his general disregard for corporate governance.”

As for Frazer, ten paragraphs of the Amended Complaint are spent describing his allegedly incompetent supervision of the NRA’s compliance with New York law, and his failure to ensure the accuracy of the NRA’s annual filings with the Attorney General (id. ¶¶ 286–296). Frazer’s alleged misconduct regarding supervision of the NRA’s conflict-of-interest and related-party-transaction policies, his failure to appropriately handle related party transactions, and his failure to follow proper procedures regarding procurement, are also detailed in the Complaint.”

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