Shilo Sanders has been fighting through a long and complicated bankruptcy case for more than two years, but the newest dispute may be the most consequential yet.
The defensive back, who filed for bankruptcy with about $11 million in debt, is now at the center of a challenge from a court-appointed trustee who says Sanders improperly moved roughly a quarter-million dollars.
Sanders‘ attorney, Keri Riley, has pushed back sharply, calling the accusation a misunderstanding of both the money and the law.
According to USA Today, Riley has filed a response asking the court to dismiss trustee David Wadsworth‘s complaint entirely.
Wadsworth argued that Sanders violated bankruptcy rules by transferring about $250,000 through Big 21, one of the companies Sanders uses for his NIL activity. Riley countered that the trustee is chasing money he was never entitled to in the first place.
“All of the funds paid into, and subsequently out of Big 21 post-petition were post-petition earnings of the Debtor,” she wrote.
“The Trustee acknowledges in the Complaint that the Debtor was earning money from NIL Deals both pre- and post-petition. As evidenced by the allegations in the Complaint, the NIL Deals were and are the Debtor’s primary source of income.”
That income, his attorney says, flowed through Big 21 LLC and Headache Gang LLC, the two business entities he formed to handle his brand deals. Because those earnings were created after the bankruptcy began, Riley maintains they fall outside the bankruptcy estate, meaning the trustee never had authority over them.
Trustee says Sanders violated one of bankruptcy’s strictest rules
Wadsworth, however, insists that the timeline doesn’t excuse the transfer. He has argued that Sanders moved funds that legally belonged to the bankruptcy estate, and by shifting that money, Sanders violated the automatic stay.
If the money should have been under Wadsworth‘s control, Sanders had no right to redirect it, no matter which business account it passed through.
The law is clear that trustees can collect anything earned before the filing date, but money earned afterward is usually off-limits. NIL deals, which can be structured in shifting or ongoing payments, complicate that boundary.
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