Shilo Sanders, the former Colorado Buffaloes player, is facing accusations from a bankruptcy trustee regarding alleged unauthorized bank transfers totaling around $250,000. However, Sanders’ legal team is pushing back, asserting that he is entitled to the profits he earned after initiating his bankruptcy filing.
The Trustee’s Allegations
The core of the issue lies in a court filing from October 22, where Trustee David Wadsworth accused Sanders of circumventing bankruptcy laws by allegedly moving funds between accounts. The trustee is seeking the return of these funds to the original account. This situation arises from Sanders’ Chapter 7 bankruptcy filing in October 2023.
The bankruptcy was prompted by a lawsuit from a high school security guard, John Darjean, stemming from a 2015 incident. After Sanders failed to appear for the trial, Darjean was awarded a default judgment of $11.89 million, which remains unpaid. Sanders has also faced legal action from his former law firm, Barnes & Thornburg LLP, which claims it is owed nearly $165,000 for services related to both the Darjean lawsuit and the bankruptcy case.
Defense: Post-Petition Earnings Are Protected
Shilo Sanders’ attorney, Keri Riley, has formally requested the bankruptcy court to dismiss the trustee’s complaint. Riley’s argument hinges on the distinction between pre-petition and post-petition earnings. According to court filings obtained by USA Today Sports, the attorney stated, “All of the funds paid into, and subsequently out of Big 21 post-petition were post-petition earnings of the Debtor.”
The filing further clarifies that while the bankruptcy estate is entitled to proceeds from existing assets, the law explicitly excludes earnings from services performed by an individual debtor after the bankruptcy case has begun. The trustee himself acknowledges that Sanders was earning money from Name, Image, and Likeness (NIL) deals both before and after filing for bankruptcy, and these deals remain his primary income source.
What are your thoughts on the legal battle surrounding Shilo Sanders’ bankruptcy? Do you think post-petition earnings should be protected? Share your opinions in the comments below!
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