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The National Rifle Association’s former advertising agency requested that the gun group’s bankruptcy case be tossed out, saying it was filed in bad faith, WSJ Pro Bankruptcy reported. Ackerman McQueen Inc., which spearheaded the NRA’s ad campaigns for decades before getting caught up in a battle for control of the organization, is now the biggest unsecured creditor in the chapter 11 proceedings. Ackerman filed papers yesterday in the U.S. Bankruptcy Court in Dallas asking that the bankruptcy case be dismissed on the grounds that it amounts to an improper effort to gain a litigation advantage over the New York state authorities that have sued to break up the NRA. “It’s a disappointing, but predictable, response from a terminated vendor and defendant in litigation involving significant claims of wrongdoing,” said Michael J. Collins, partner at Brewer, Attorneys & Counselors. “Ackerman McQueen continues to attack the NRA and its advisors to deflect from the allegations against the agency. We will continue to operate within the parameters of the bankruptcy court — to the benefit of the NRA, its members, and its vendors.” The filing comes on the heels of a motion by a member of the NRA’s board, Phillip Journey, who asked for the appointment of an examiner “to bring to light the veracity of the alleged fraud, dishonesty, incompetence, and gross mismanagement that has plagued the NRA’s reputation.” At a court hearing yesterday, Judge Harlin Hale said that he had decided not to read any news accounts of the NRA’s high-profile bankruptcy, which is still in the early stages. Journey’s motion said last month’s bankruptcy filing was a surprise to one or more directors on the NRA board. In a statement, NRA lawyer William A. Brewer said Journey was mistaken in suggesting the bankruptcy filing was the product of a flawed process. Ackerman’s critique argues the NRA is improperly using bankruptcy to escape a raft of litigation that the NRA itself initiated, as well as official enforcement proceedings that threaten to expose financial wrongdoing, including by New York Attorney General Letitia James.

The National Rifle Association may have handed ammunition to its critics when it filed bankruptcy as part of an effort to defend itself from New York regulators and others and reincorporate in Texas, Bloomberg News reported. Sometime in the coming weeks, the group, known for its aggressive political and legal tactics in defense of gun rights, will be forced to release a detailed list of cash payments it has made to insiders in the last year and any unusual property transfers it has made to anyone within two years. And if the NRA had a stake in any other business of 5% or more in the last six years, that information must be made public as well. Before then, the U.S. Trustee, an arm of the U.S. Department of Justice, will set up an official committee of unsecured creditors with the power to launch new investigations into the NRA’s spending. “Each bit of information in that filing can open the door for more inquiries and discovery,” Dallas bankruptcy attorney John Penn said. The NRA filed for bankruptcy last month as part of a strategy to resolve many of the lawsuits it faces in one location and to reincorporate in gun-friendly Texas. The association claims it is the subject of a political attack by regulators in New York.