The NRA's chapter 11 filing last week has possible implications for mass torts, public policy and chapter 11 law. Why? Because the NRA is a lightning rod for attention, and that attention may produce a new focus on the general use of chapter 11 to seek to avoid paying claims by government agencies and tort creditors. In addition, the NRA explicitly acknowledged moving to Texas to seek to limit or avoid its risks and liabilities, which may produce new scrutiny into similar steps used by commercial businesses to prepare to invoke chapter 11 in a bankruptcy court viewed as a friendly forum.
Also, this is not yet clear, but it may well be that the NRA has used or will seek to use the so-called "Texas two step." The two step is a process to separate liabilities from assets using an outlier Texas statute for "divisive mergers" of entities, as explained in a January 17, 2017 post by Joe Struble of Strasburger Price. In addition, the NRA explicitly acknowledged moving to Texas to seek to limit or avoid its risks and liabilities, which may produce new scrutiny into similar steps used by commercial businesses to prepare to invoke chapter 11 in a bankruptcy court viewed as a friendly forum.