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Wayne LaPierre, the top executive of the National Rifle Association, put the gun rights group into bankruptcy to avoid facing a financial investigation by New York’s Attorney General, a lawyer for the state said at the start of a trial that could reshape one of the most politically powerful organizations in the U.S., Bloomberg News reported. New York’s top law enforcement officer, Letitia James, is asking a federal bankruptcy judge in Dallas to either appoint a trustee to run the NRA instead of LaPierre, or to throw out its bankruptcy case, which would make it easier for her to seize the group’s assets if she prevails in a New York lawsuit. “LaPierre’s only goal is to cling to the power that his position holds,” Assistant Attorney General Monica Connell told the judge on Monday during the first day of the trial, which is being held by video. James filed a lawsuit against LaPierre and the NRA in August after investigating alleged financial misdeeds by the organization’s top executives. The suit seeks to dissolve the NRA and redistribute its $200 million worth of assets to other nonprofits. NRA attorney Greg Garman defended LaPierre, calling his fundraising prowess irreplaceable. Throwing out the bankruptcy would wrongly expose the NRA to a politically motivated attack on the group’s First Amendment rights, Garman said. And replacing LaPierre would pose an immediate danger to the organization’s future, Garman told U.S. Bankruptcy Judge Harlin D. Hale. “A trustee is in fact a death sentence,” Garman said, because LaPierre raises $100 million annually for the 150-year-old organization. Judge Hale isn’t expected to rule until after the multiday trial ends. Both sides will focus on the results of James’s investigation, which concluded the NRA executives illegally diverted tens of millions of dollars away from the group’s charitable mission.

Victims of childhood sexual abuse are challenging the Boy Scouts of America for control of the youth group’s multibillion-dollar bankruptcy case, saying they can save scouting’s future while compensating those who have suffered from its history of abuse, WSJ Pro Bankruptcy reported. An official committee representing sex-abuse victims said that because the Boy Scouts have been unable to come up with a viable settlement offer, victims themselves should be able to float a competing chapter 11 plan. “The committee filed this motion because abuse survivors are not fairly treated under the Boy Scouts proposed plan,” said James Stang, lawyer for the committee. The Boy Scouts have said they need to exit chapter 11 by the end of the summer for financial reasons, but don’t have the support of victims’ groups, which have largely rejected an opening settlement offer. “We wholeheartedly share the official tort claimants’ committee’s determination and commitment to equitably compensate survivors,” the Boy Scouts said in a statement. The committee’s challenge to extended exclusivity for the Boy Scouts amounts to a nuclear option in bankruptcy court that, if approved, could take the chapter 11 case in a radically different direction. In court papers filed on Thursday, the committee sharpened its criticism of the Boy Scouts plan as legally flawed and financially insufficient for the nearly 84,000 men who have stepped forward seeking compensation. To settle with victims, the organization last month offered to furnish cash, artwork and other assets, plus the rights to insurance policies dating back to 1935. The Boy Scouts also said they would seek $300 million for victims from hundreds of affiliated local councils spread across the country, which aren’t themselves in bankruptcy but are seeking to participate in a broad victim settlement through the chapter 11 proceeding.

The National Rifle Association rolled the dice by filing for chapter 11 protection earlier this year, gambling that it could use the power of U.S. bankruptcy law to consolidate litigation and combat allegations of fraud and mismanagement brought by the New York attorney general, WSJ Pro Bankruptcy reported. The gun-rights group is about to find out how well that bet is playing out. A federal bankruptcy judge in Dallas has scheduled six days of virtual hearings starting today that are likely to determine the course of the bankruptcy and, potentially, of the NRA itself. Among those whose fates are on the line is Wayne LaPierre, the chief executive who has led the not-for-profit group for three decades and become the public face of one of America’s most powerful advocacy organizations. LaPierre and other top NRA officials are poised to testify in public for the first time on allegations of spending abuses at the group. New York’s attorney general is expected to call other witnesses, possibly including LaPierre’s longtime travel consultant, who arranged NRA-funded private jet flights for him and his relatives, and sat for a deposition last week. “The legal issues here have nothing to do with the Second Amendment — the NRA could be selling shoes,” Adam Levitin, a bankruptcy-law professor at Georgetown University, noted. “This is about whether a major charitable organization has been looted by its managers.” There are four possible outcomes to the hearings, bankruptcy specialists said. U.S. Bankruptcy Judge Harlin Hale could simply allow the NRA bankruptcy to continue rolling along. He could dismiss the case altogether. Or he could leave it in place, but appoint either an independent trustee or an examiner to probe the fraud allegations.

Chief Bankruptcy Judge Carl L. Bucki of the U.S. Bankruptcy Court in the Western District of New York has temporarily blocked three dozen Child Victims Act cases against area Catholic parishes and schools from moving forward in State Supreme Court, the Buffalo (N.Y.) News reported. The judge put the 36 cases on hold until Oct. 1, saying their advancement now would threaten the Buffalo Diocese’s bankruptcy reorganization effort. “At a time when the vast majority of interested parties are working to find a way for the debtor to reorganize, the distraction of state court litigation for the benefit of a few will endanger the prospects of an outcome for the benefit of everyone,” Judge Bucki said in a written ruling on Wednesday. A chapter 11 bankruptcy filing in 2020 automatically stopped 260 Child Victims Act lawsuits against the diocese from advancing in state courts. Catholic parishes, schools and other entities that are separate nonprofit corporations did not file for bankruptcy. Judge Bucki last July temporarily protected parishes and schools from lawsuits. Those protections became more permanent when abuse survivors who make up the committee of unsecured creditors struck a deal with the diocese to not press forward with lawsuits against individual parishes. In exchange, the diocese agreed to hand over thousands of pages of confidential internal documents on abuse, clergy records, finances and other matters.

A lawyer representing New York’s attorney general accused National Rifle Association leader Wayne LaPierre of hiding from its board his plan to put the gun rights group into bankruptcy, WSJ Pro Bankruptcy reported. LaPierre unilaterally authorized the January chapter 11 filing without proper NRA board approval, Gerrit Pronske, a lawyer representing the New York attorney general’s office, said during a virtual hearing on Wednesday in the U.S. Bankruptcy Court in Dallas. “Filing this bankruptcy was NRA’s best-kept secret,” Pronske said, “Except, you can’t keep an act secret from the persons who need to approve the act.” The allegation, which the NRA denies, is a basis for New York Attorney General Letitia James’s argument that the bankruptcy case was filed in bad faith and should be thrown out or, alternatively, that an independent trustee should be appointed to take charge of the NRA, wresting control from LaPierre and the board. James filed a lawsuit last August seeking to dissolve the organization. The NRA, a New York registered nonprofit organization since 1871, said in a news release that the bankruptcy was appropriately filed and is part of a broader strategy to depart a “toxic political environment” and reincorporate in Texas.

A Texas wind farm facing a $113 million bill from Citigroup Inc. for failing to deliver power during last month’s cold snap filed a lawsuit seeking to protect itself against the risk of a takeover and forced liquidation by the bank, WSJ Pro Bankruptcy reported. Stephens Ranch Wind Energy LLC filed the lawsuit Tuesday in the Supreme Court of New York County, accusing Citi of using the winter freeze that swept Texas last month “as a basis to seize control of Stephens Ranch and liquidate its assets.” Citi declined to comment. The bank declared defaults against Stephens Ranch after its wind turbines were “incapacitated” during the winter storm and the facility couldn’t meet contractual obligations to generate power, according to the complaint. Stephens Ranch, which operates 210 turbines with a capacity of 376 megawatts located between the cities of Lubbock and Odessa, said the notices of default, which it disputes, put it at “severe risk of losing its business.” Justice Robert R. Reed entered a restraining order on Wednesday blocking Citi from taking action against the wind farm based on the alleged default and scheduled a further hearing on the dispute for April 22.

The Texas Senate passed a sweeping bill to overhaul the state’s electricity market following last month’s historic blackouts by forcing power plants to winterize and barring the type of business model used by Griddy Energy, Bloomberg News reported. The measure, which still needs approval by the state’s House of Representatives, would require the owners of all power generators, transmission lines, natural gas facilities and pipelines to protect their facilities against extreme weather or face a penalty of up to $1 million a day. Nearly half of Texas’s power-plant capacity went down in February after a severe winter storm froze equipment, halted gas supplies and triggered blackouts that left more than 4 million homes and businesses in the dark for days. More than 100 people died during the crisis. In its aftermath, lawmakers have scrambled to address some of the power-system flaws laid bare by the catastrophe. The bill aims to rein in, albeit modestly, Texas’s laissez-faire approach to electricity markets, which some have argued contributed to the crisis. The state’s power system operates independently from other grids so as to avoid federal oversight, and the market relies almost exclusively on price signals to secure electricity rather than holding supply in reserve for emergencies. On Tuesday, the Texas house preliminarily approved its own package of bills designed to respond to the grid failure. They included a measure that would only require power plants and power line owners to weatherize. Notably, both the Senate and House measures would ban power providers from offering electricity plans tied to the state’s volatile wholesale power market, a practice that resulted in exorbitant bills for customers during the energy crisis. Griddy, whose customers received bills in the tens of thousands of dollars, declared bankruptcy in the wake of the crisis.

Electricity retailer Entrust Energy Inc. sought chapter 11 protection Tuesday as the latest corporate bankruptcy stemming from last month’s extreme weather events in Texas, WSJ Pro Bankruptcy reported. Entrust’s chapter 11 papers listed a disputed $270 million bill from the Electric Reliability Council of Texas, the grid operator at the center of the state’s energy crisis. Houston-based Entrust is among many municipal utilities, electric cooperatives and electricity retailers facing huge bills from Ercot for power they bought at vastly elevated prices during the cold snap in Texas last month. Brazos Electric Power Cooperative Inc., the state’s largest energy cooperative, was the first to file for chapter 11 after being overwhelmed with invoices. Energy retailers Just Energy Group Inc., Griddy Energy LLC and Brilliant Energy LLC also declared bankruptcy. Others have indicated they are in financial distress, are disputing the bills or need to borrow to pay Ercot, which allowed electricity prices to soar to the maximum level of $9,000 per megawatt hour, compared with the average price of roughly $22 last year, in an effort to get power generators to supply power amid widespread blackouts and equipment failures. Ercot cut off Entrust from the state power market after the company failed to make required payments and transferred its customers elsewhere, according to an Ercot notice. Rhythm, a renewable energy provider, said earlier this month it had acquired Entrust’s Texas customers as well as those of another retailer, Power of Texas Holdings Inc. totaling 40,000 residential and 10,000 commercial users.

The Texas attorney general’s office is asking a judge to approve the creation of a committee to represent customers in the chapter 11 case of Griddy Energy LLC, which went bankrupt in the wake of the state’s historic winter storm last month, Reuters reported. During a virtual hearing yesterday, Assistant Attorney General Abigail Ryan told U.S. Bankruptcy Judge Marvin Isgur in Houston that it would be helpful to have the thousands of Griddy customers who were affected by the devastating Texas winter storm in February be represented under one umbrella in the case. The retail electric provider filed for chapter 11 protection on March 15 after the storm left it owing $29 million to the state’s grid operator, the Electric Reliability Council of Texas Inc.

Archbishop of Santa Fe John C. Wester is living out of two rooms at an Albuquerque parish these days, his formal diocesan home sold to help pay for the sins of his predecessors and the damage done by priests and other clergy members who molested children, the Albuquerque Journal reported. The archdiocese reported selling the four-bedroom, tri-level house near its Catholic Center on Albuquerque’s West Side for about $425,000 as part of a stepped up liquidation of assets in its ongoing chapter 13 bankruptcy reorganization, which appears closer than ever to settlement. Basically every piece of property the Archdiocese of Santa Fe corporation-proper owns is ‘on the block,’ ” according to a bankruptcy update written earlier this month by archdiocese Vicar General Father Glenn Jones. He reported that Wester has moved to smaller quarters in an undisclosed “parish facility.” Properties being sold include a well-known archdiocese retreat center in Santa Fe and may ultimately include the St. Pius X High School property in Albuquerque.