WASHINGTON (AP) — Federal officials have revoked the license of a Nevada-based gun manufacturer that was accused of illegally selling guns and went bankrupt but then rebranded itself.

The revocation comes after a lawsuit that alleged the Justice Department didn't conduct proper oversight before issuing the license.

The decision to revoke the license of JA Industries was spelled out in a court filing late Wednesday as part of the lawsuit brought by Illinois; Kansas City, Missouri; and gun control advocacy group Everytown for Gun Safety.

The lawsuit alleged that the Bureau of Alcohol, Tobacco, Firearms and Explosives, a law enforcement agency in the Justice Department, awarded the license to JA Industries, renamed from Jimenez Arms, after it violated federal firearms law. The suit also alleged that the company's guns were contributing to rising violent crime rates in Chicago and Kansas City.

Kansas City and Everytown had sued Jimenez Arms and several gun dealers previously, alleging they contributed to surging gun violence in the Kansas City region by ignoring evidence that guns were being sold illegally in the area. Jimenez Arms filed for bankruptcy about a month after the suit was filed.

That suit contended that Jimenez Arms every year made tens of thousands of cheap handguns that turned up at crime scenes in Kansas City and Chicago "at a rate disproportionate to the company's market share."

The plaintiffs alleged in their suit against the ATF that the company's owner, Paul Jimenez, applied for a new license under the name JA Industries and that it took the ATF less than a month to award the license. The suit alleged that company officials had made false statements to the ATF and had unlawfully shipped guns to a firearms trafficker, which should've made the company and its officials ineligible for holding a federal firearms license.

A message seeking comment from JA Industries on Thursday was not immediately returned.

Everytown for Gun Safety heralded the decision to revoke the company's license.

"We can only hope this decision marks the beginning of a new era at ATF, one that is consistent with President Biden's commitment to holding rogue and reckless members of the gun industry accountable for breaking the law and putting lives in danger," said John Feinblatt, Everytown's president.

In a statement, Kansas City Mayor Quinton Lucas said it was a "bold action to stop the flow of illegal firearms into Kansas City."

An ATF spokesperson, Erik Longnecker, declined to comment specifically, citing the ongoing case. But he said the agency "revokes Federal firearms licensees who are found to have committed willful violations of the Gun Control Act and have an adverse impact on public safety."