Shilo Sanders Accused of Unauthorized Bank Transfers in Bankruptcy Case

A new development has emerged in the bankruptcy case of Shilo Sanders, former Colorado Buffaloes player and son of Deion Sanders. The trustee overseeing his bankruptcy has accused Sanders of making unauthorized bank transfers totaling approximately $250,000 from his company’s account. This accusation could have significant implications for his ongoing legal and financial situation.

Allegations of Violating Bankruptcy Laws

According to court filings made on October 22nd by Trustee David Wadsworth, Sanders allegedly violated bankruptcy laws by transferring these funds after filing for Chapter 7 bankruptcy in October 2023. Wadsworth is now seeking to recover this money, claiming Sanders acted improperly by moving funds from his business, Big 21, LLC.

The bankruptcy filing came after Sanders was ordered to pay a default judgment of $11.89 million to a security guard who accused him of assault back in 2015. The trustee is specifically looking to recover funds that include Sanders’ Name, Image, and Likeness (NIL) earnings from his college years. Wadsworth asserts that Sanders’ actions constituted a “willful violation of the automatic stay,” a legal protection that prohibits creditors from pursuing collection efforts once a bankruptcy petition is filed.

NIL Earnings and Business Control

The complaint details that after the bankruptcy petition was filed, only the trustee, as the sole member of Defendant Big 21, LLC, should have had the authority to authorize transfers from its bank account. However, the trustee claims that approximately $250,000 was transferred out for Sanders’ benefit without authorization. This includes income potentially derived from pre-petition NIL contracts.

Furthermore, the trustee claims Sanders received NIL contract money through another company, Headache Gang, after filing for bankruptcy. This company reportedly received $202,500 in December 2023. The trustee argues that any revenue from pre-petition NIL contracts, regardless of when it was received, is considered property of the bankruptcy estate and should be turned over.

Seeking Turnover of Funds

As a result of these alleged violations, the trustee is seeking the “turnover of all revenue and proceeds” related to any pre-petition NIL contracts entered into by Sanders and other defendants. This legal action aims to ensure that all assets belonging to the bankruptcy estate are accounted for and properly managed according to bankruptcy law.