A federal judge in Denver this week addressed an ongoing issue in the bankruptcy case of Colorado football player Shilo Sanders:
How much privacy should Sanders be given related to his business dealings in this case?
Judge Michael E. Romero urged the parties involved to make progress on their disputes about this matter but also reminded Sanders’ attorney that Sanders’ overall financial situation is now a “public record.”
“This is a bankruptcy case, and the finances of Mr. Sanders is public record, so some of that information is going to be for the public to understand and everyone to understand,” Judge Romero said.
Sanders, son of Colorado football coach Deion Sanders, filed for bankruptcy in October 2023 after falling into more than $11 million in debt, almost all of it owed to one person – a former security guard at his school in Dallas named John Darjean.
Why is the privacy of Shilo Sanders’ information at issue?
Shilo Sanders, 24, is seeking to free himself of his debt in bankruptcy court − a taxpayer-funded judicial system in which one of the prices of trying to erase such debt is to go through a transparent, public process for it.
But he still wants certain aspects of his business information to be private and under a protective order that shields it from public disclosure, particularly his deals with those paying him for his name, image and likeness (NIL).
“The reason we’re having these hearings relates to Mr. Sanders and his present financial situation and how that information will get disseminated to creditors, the (bankruptcy) trustee, Mr. Darjean and anyone else who’s interested, as every other bankruptcy debtor is before this court,” Judge Romero said during a status conference in the case this week. “This is a transparent process, but the question is how widely disseminated (it will be). Eventually everyone is going to know. It will be fully public eventually, most likely, at least certain aspects of it. There will be certain aspects that will always be confidential, but in general, details will come out.”
Shilo Sanders’ NIL deals are a big part of it
After filing for Chapter 7 bankruptcy, Shilo’s finances are undergoing scrutiny from the bankruptcy trustee who is in charge of gathering his non-exempt property for the bankruptcy estate on behalf of Shilo’s creditors. In this case, Darjean also is fighting Shilo’s attempt to discharge the debt because he wants to collect on all of what Shilo owes him.
Darjean won an $11.98 million default judgment against Shilo in 2022 after suing Shilo and accusing him of severely injuring him during an assault by him in 2015, when Shilo was 15 years old and Darjean was trying to confiscate his phone at school. Shilo previously claimed he acted in self-defense but didn’t show up at trial to contest it in 2022.
Now as the bankruptcy case proceeds on multiple fronts, the trustee and Darjean are seeking detailed information from Sanders about his finances. But Sanders’ attorneys also want to guard against certain information being shared or disclosed in court as part of the public proceedings.
The judge said the “primary reason” for meeting in conference this week was the discovery evidence that is being requested of Shilo Sanders, his related NIL entities and family members. He wants to determine ‘to what extent that can be disclosed and under what condition.”
Shilo Sanders’ attorney, Keri Riley, said her client is trying to make sure he doesn’t violate confidentiality agreements in his NIL deals.
“Initially, the protective orders that we’ve proposed are really targeted to protect the confidential business information of the debtor (Shilo Sanders),” Riley told the judge this week. “Obviously he is a party to, or… his entities are a party to a number of name, image, likeness agreements that are fairly new in the world of college sports and are in fact confidential business information. A lot of them have confidentiality clauses and we don’t believe should be part of the public disclosure.”
Where does this bankruptcy case stand now?
The issues involving protective orders were not resolved yet, but the judge made clear he wanted them to be soon so the case can proceed with the discovery of evidence. He also denied a previous request by Darjean to expand the investigation into Shilo’s finances with so-called Rule 2004 examinations of Shilo and Deion Sanders. The judge instead said Darjean could pursue discovery of evidence through other means.
The case still appears to be months away from closing after Shilo recently completed his final college football season at Colorado. This week, the trustee in the case issued three subpoenas seeking financial information about Shilo from the University of Colorado, Wells Fargo bank and Redpoint Financial Group, an accounting firm, to help assess and round up Shilo’s property and financial condition on behalf of creditors.
The trustee also is pursing affidavits from Shilo’s family, including Deion Sanders, after Darjean previously raised the issue that Shilo may be funneling his earnings to a trust held by his father.
The trustee’s attorney, Peter Cal, said in court this week that he was going to work with Shilo’s attorney to get affidavits from Deion Sanders and Shilo’s mother to “make sure they provide sufficient information so the (bankruptcy) trustee understands… whether there’s any money in those trusts that belong to the bankruptcy estate and whether any money has been used that the bankruptcy estate is entitled to.”
No jury trial on nature of the alleged incident in 2015
In December, Romero denied a summary judgment request by Darjean, who had asked the court to rule that Shilo’s debt cannot be discharged under the law because it resulted from a “willful and malicious” injury inflicted by Shilo, the debtor. The judge’s denial of this request means that issue is headed to trial instead, but no trial date has been set. That narrow issue relates to Shilo’s state of mind during his incident with Darjean in 2015 and whether it was “willful and malicious.”
Darjean’s attorney, Ori Raphael, agreed this week to have that trial decided by the judge instead of a jury.
If the judge sides with Darjean, Shilo would be on the hook to pay back the debt, including from future earnings.
Follow reporter Brent Schrotenboer @Schrotenboer. Email: bschrotenb@usatoday.com