Report: Judge dismisses parts of Shilo Sanders' bankruptcy case stemming from $11.89 million judgement for assaulting security guard

Shilo Sanders got some small wins in the ongoing Colorado lawsuit regarding a bankruptcy petition he’s made. According to a report from Sportico’s Michael McCann, the judge in the case partially dismissed John Darjean’s lawsuit claiming Sanders is using the bankruptcy process and some LLCs to avoid paying a multi-million dollar judgement against him.

Sanders has been seeking relief under Chapter 7 of the Bankruptcy Code, a move that, if successful, would offer relief from an $11.89 million judgement he owes Darjean. Sanders was found liable in 2022 for a 2015 assault of Darjean; Sanders did not attend the Texas civil trial in which a jury awarded the judgement to Darjean.

The remain portions of the current case will move to pre-trial discovery, giving both sides an opportunity to access certain records and information from the other. It also means both sides will be empowered to seek testimony, meaning Sanders’ family — including younger brother Shedeur and father Deion — could be asked to testify as they’ve evidently been closely involved in Sanders’ NIL activity.

And while the judge, Jay Romero, partially dismissed the lawsuit trying to stop Sanders’ bankruptcy petition, his recent 13-page ruling wasn’t wholly a win for the Buffaloes safety. And it all centers around a pair of LLCs that Sanders uses in relation to his NIL activities and questions about “piercing the corporate veil.”

Sanders contends that he is not party to certain NIL contracts, but that Big 21 LLC and/or SS21 LLC are, and therefore shouldn’t be counted among his property with respect to the bankruptcy proceeding. This coincides with other filings that showed his personal assets, including NIL earnings, were below what many anticipated — filings that excluded robust information about either LLC or respective NIL activities.

Darjean, however, rejected that assertion from Sanders and argued that the LLC’s are effectively alter egos and urged Romero to treat them as part of Sanders’ personal assets — i.e. “piercing the corporate veil.”

Romero did not make a definitive ruling on more closely tying Sanders to these LLCs in this bankruptcy case, but noted he could not rule it out but that Darjean would face a steep burden to convince the courts to take such an action later on.

Romero also took something of a middle path when addressing a counterclaim from Sanders that Darjean failed to state a claim of fraudulent intent. The judge wrote that there was a fair amount of good information from Darjean and his lawyers in that regard, but that certain portions required more investigation.

Darjean was given until June 27 to refile an amended complaint.