There’s been another turn in the ongoing bankruptcy case involving Shilo Sanders, with the court-appointed trustee pushing back against Sanders’ attempt to shut the case down.
In a new court filing dated December 17, obtained by USA Today, the trustee reiterated his claim that Sanders violated bankruptcy law and should be required to return roughly $250,000 to the bankruptcy estate.
The trustee, David Wadsworth, is seeking recovery of money he alleges Sanders improperly transferred to himself after filing for Chapter 7 bankruptcy in October 2023.
Sanders’ legal team previously asked the court to dismiss that complaint, arguing the trustee misunderstood the nature and timing of Sanders’ earnings. The trustee’s response rejects that argument outright.
“The Defendants are wrong,” trustee attorney Peter Cal wrote in court documents, disputing Sanders’ claim that all of the funds at issue were protected as post-bankruptcy earnings.
At the center of the dispute is the income Sanders earned through name, image, and likeness (NIL) activity that flowed through two companies—Big 21 and Headache Gang—both named as defendants in the case.
The trustee argues that some of that money should be treated as property of the bankruptcy estate and, therefore, subject to turnover to creditors.
Sanders’ attorney, Keri Riley, previously argued the funds belonged to Sanders personally because they were earned after he filed for bankruptcy. But the trustee responded that this issue can’t be resolved at this stage of the case and challenged the factual basis of Sanders’ claims.
“Sanders relies on the unsupported argument that all funds in the Big 21 Bank Account were post-petition earnings,” the trustee’s attorney wrote, adding that the argument hinges on facts not established in the complaint.
A footnote in the filing went further, stating that funds were in the account as of the bankruptcy petition date, undercutting Sanders’ position.
The trustee also argued that even deposits made after the bankruptcy filing could still be subject to recovery if they stemmed from NIL contracts entered into before Sanders filed for protection. “It is more than plausible that at least certain of the post-petition deposits were based on the Debtor’s prepetition NIL contracts,” the filing states.
The bankruptcy case traces back to a 2022 default judgment of $11.89 million entered against Sanders in Texas. Former school security guard John Darjean sued Sanders over a 2015 incident at a Dallas-area school, alleging permanent injuries. Sanders claimed self-defense but did not appear at trial, resulting in the judgment.
When Darjean moved to collect in 2023, Sanders filed for bankruptcy. Darjean is now fighting to keep the debt from being discharged, arguing it stems from a “willful and malicious” injury. Those complaints remain pending, along with a separate lawsuit from a law firm seeking more than $164,000 in unpaid legal bills tied to Sanders’ cases.