Is using bankruptcy and re-incorporating in another state to avoid a lawsuit a legal avenue or is that going to get you into more trouble?
What's the penalty for bankruptcy fraud of this kind in the United States?
Using bankruptcy as a means to strengthen chances of an organization's survival seems entirely consistent with the purpose of the law, and at a minimum, is not a showing (in and of itself) of fraud.
Especially so, if the NRA isn't misrepresenting it's financial obligations and status to the courts.
>that will get the corporate veil pierced
Intent and eventual result is not enough on its own to show this. If the letter of the law was followed in its actions, an organization's liability should be protected as provided by corporate law.
Obviously, bankruptcy also isn't meant to allow jurisdictional avoidance. But the NY AG's actions are themselves a legally questionable means of pursuing a political motive, for which they are skirting the spirit/intent of the law.
And they certainly fit the spirit/character of an overly aggressive creditor, if not the letter.
Which results in a potentially interesting dilemma for the NY AG- claim interest in the case as some kind of a creditor, which might afford NRA relief from them, or claim sovereign interest as a state, which might preserve since of their legal claims, but sideline them until the federal bankruptcy proceedings are over (with NRA emergence from protection in Texas).
From a practical/ethical perspective, if NY's pursuit/prosecution is just in NY, it should also be just in Texas.
If NY can't pursue the same prosecution, (or the same equitable relief) once the NRA moves, is that not an implicit admission of misusing jurisdictional authority?
It's regular practice in USA/Canada.
E.g. tobacco companies in Canada filed for bankruptcy the second they lost a big lawsuit against them. They were also careful enough to structure their Canadian ops as highly dependent subsidiaries. So even when whatever cash was left gets distributed, the parent still profits from its Canadian ops.
https://financialpost.com/news/retail-marketing/imperial-tob...
The nice thing about North american bankruptcies is that it's a public process, so you get a view into their operations that may never otherwise be/become public.
https://documentcentre.ey.com/#/detail-engmt?eid=402
Lots of opiate manufacturers going down the same road.
In the UK I think if you're bankrupt (insolvent) then that's it you're done, you're not trading anymore, and they will call in a third-party company to wrap you up and sell all your stuff and you're not likely getting any money out of it as an owner or shareholder.
Applying for this kind protection allows a company to continue doing business while halting creditor claims. However, they have to undergo a formal process where they have to construct a restructuring plan to be reviewed and approved by the courts.
The UK this process is apparently called administration [2], and there are several mechanisms for restructuring and dealing with creditors.
[1] https://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_S...
[2] https://en.wikipedia.org/wiki/Administration_in_United_Kingd...
For example, most of Trump's debts are heavily secured compared to those of companies without a history of bankruptcy in their past.
I just wonder if that is the case here or not according to US corporate law.
The have successfully wielded this power to great effect for the last three decades.
Every republican I know can name a few GOP platform positions they dislike or even find alarming, but never the less they vote for politicians who are forced to adopt every position.