Shilo Sanders’ Bankruptcy Fight Escalates as Trustee Says $250K in NIL Money Must Be Returned
The legal back and forth around Shilo Sanders just took another sharp turn, and the bankruptcy court is not easing up.
In a December 17 court filing obtained by USA Today, the court-appointed trustee pushed back hard against Sanders’ attempt to shut the case down, saying the facts still point to serious bankruptcy violations. Trustee David Wadsworth is seeking the return of roughly $250,000 that he claims Sanders improperly transferred to himself after filing for Chapter 7 bankruptcy in October 2023.
Sanders’ legal team had previously asked the court to dismiss the complaint, arguing the trustee misunderstood both the timing and nature of Sanders’ earnings. That argument did not land. “The Defendants are wrong,” trustee attorney Peter Cal wrote, rejecting the claim that all disputed funds were protected as post-bankruptcy income.
The money at the center of the dispute comes from Sanders’ name, image, and likeness deals, which were routed through two companies, Big 21 and Headache Gang. Both companies are listed as defendants. The trustee argues that at least some of those funds should be treated as part of the bankruptcy estate and turned over to creditors.
Sanders’ attorney, Keri Riley, previously claimed the funds belonged to Sanders personally because they were earned after the bankruptcy filing. The trustee responded that the issue cannot be resolved this early and challenged the factual support behind Sanders’ position. “Sanders relies on the unsupported argument that all funds in the Big 21 Bank Account were post-petition earnings,” Cal wrote.
A footnote in the filing adds another wrinkle, stating funds were already in the account when Sanders filed for bankruptcy. The trustee also argued that even deposits made later could still be recoverable if tied to NIL contracts signed before the filing.
The bankruptcy traces back to an $11.89 million default judgment entered against Sanders in 2022. Former school security guard John Darjean sued Sanders over a 2015 incident, alleging permanent injuries. Sanders said he acted in self-defense but did not appear at trial, leading to the judgment.
When Darjean moved to collect in 2023, Sanders filed for bankruptcy. Darjean is now fighting to block the debt from being discharged, calling it a willful and malicious injury. A separate lawsuit from a law firm seeking more than $164,000 in unpaid legal fees is also still pending.
With the trustee standing firm, this case is far from over, and the court now has more questions than answers about where that NIL money really belongs.