A federal bankruptcy judge has ruled against Shilo Sanders, denying the former Colorado safety’s attempt to dismiss a lawsuit filed by the trustee overseeing his bankruptcy case. The decision allows the trustee’s complaint to move forward and potentially head to trial, marking the latest development in Sanders’ ongoing legal battle over millions of dollars in debt.
According to USA Today, the ruling, issued March 4 by Judge Michael Romero, rejects arguments from Sanders’ legal team that the trustee’s case should be thrown out before it reaches the evidence stage. Instead, the judge determined that the trustee had presented enough factual allegations for the case to continue through the court process.
“The Court’s role in deciding the Motion to Dismiss is not to resolve factual disputes or weigh potential evidence outside the four corners of the Complaint,” Romero wrote in the ruling.
He added that the trustee “has otherwise sufficiently pled the necessary elements of his claims,” including allegations tied to Sanders’ bank accounts, deposits related to his name, image, and likeness (NIL) income, and Sanders’ involvement with two companies connected to those earnings.
The dispute centers on roughly $250,000 that the trustee claims Sanders improperly transferred after filing for Chapter 7 bankruptcy in October 2023. According to court filings, some of the money flowed through businesses Sanders created—Big 21 and Headache Gang—which handled earnings connected to his NIL activity during his college career.
However, the trustee disputes that interpretation and says the funds may instead be tied to contracts or activity that existed before the bankruptcy case began.
Judge Romero said resolving that question will require a deeper examination of evidence. “Identifying the true nature of the funds will require presenting evidence and resolving numerous factual issues,” he wrote.
The judge noted that determining whether the money qualifies as pre- or post-petition earnings will depend on factors including when Sanders performed services and the terms of any related contracts.
The trustee’s lawsuit is just one part of Sanders’ broader bankruptcy case. Sanders filed for bankruptcy in 2023 in an attempt to discharge more than $11 million in debt. That financial obligation stems largely from a 2022 default judgment tied to a lawsuit filed by John Darjean, a former school security guard in Dallas.
Darjean alleged that Sanders caused severe injuries during a 2015 altercation when Sanders was a teenager. Sanders claimed self-defense during earlier court proceedings but did not appear for the 2022 trial, resulting in a $11.89 million judgment against him.
Darjean is now challenging Sanders’ attempt to eliminate that debt through bankruptcy. A separate trial scheduled for August 31 will address whether the judgment can legally be discharged.