Is the NRA Board Shooting Itself in the Foot By Doing Nothing?

In my previous blog post on the NRA bankruptcy, I was focused on the bankruptcy implications of the incredible examiner motion filed by an NRA board member against the NRA. But as I think about it more, it's also got some important corporate governance implications: did the NRA board violate its fiduciary duties?  

The NRA's board owes fiduciary duties to the NRA, which means to the NRA bankruptcy estate. Those duties include a duty of good faith (basically do your homework, pay attention, and examine red flags) and a duty of loyalty (no self-dealing. 

The examiner motion alleges that the NRA's board did not approve the bankruptcy filing and learned about it through the media. Moreover, my understanding is that the NRA board has not convened since the bankruptcy filing. If the filing was in fact an unauthorized freelance project of the special litigation committee, shouldn't the board be doing... something? If the filing wasn't authorized, then the failure to convene and be briefed strikes me as a pretty glaring violation of a duty of care. The duty of care is a pretty forgiving standard in general, but doing nothing is not going to suffice when care requires at least an inquiry. 

Now this question does put the cart before the horse a bit—was the bankruptcy filing in fact authorized? If it was, then there's no issue. But I real have trouble seeing so given the authorizing language quoted. Maybe all the board (except for Judge Journey) truly believe the filing was authorized. But if there's any doubt, this seems like the sort of thing the board should be convening to address, even if only to ratify the filing after being briefed. (I don't think it's possible to take inaction as implicit ratification, as there are many reasons any individual board member might not act.)

Now two practical issues: who could bring a breach of fiduciary duty claim here and what would damages be? The fiduciary duties are owed to the NRA bankruptcy estate. That means they could be pursued by a trustee if one is ultimately appointed. It might also be possible for the Official Creditors Committee to pursue them derivatively. It might be possible for individual NRA members could bring such a claim, although this goes beyond my knowledge of nonprofit law. And then there's possibility of the NYAG seeking to enforce such duties. 

I'm not sure what damages would be for a breach of fiduciary duty here—perhaps the NRA's legal bills in the bankruptcy?  What is clear to me is that this is a situation where the board itself needs its own separate, independent counsel: if the special litigation committee has potentially gone rogue, the rest of the board needs its own lawyers to help it navigate these waters.