Shilo Sanders bankruptcy case: Judge issues ruling before start of trial

Sanders' attorneys wanted to pick up a small victory in court and failed

Sep 16, 2023; Boulder, Colorado, USA; Colorado Buffaloes safety Shilo Sanders (21) runs for a touchdown after making an interception against the Colorado State Rams during the first half at Folsom Field. Mandatory Credit: Andrew Wevers-USA TODAY Sports / Andrew Wevers-USA TODAY Sports

A federal judge issued a ruling in Shilo Sanders' bankruptcy case this week. The Colorado Buffaloes defensive back and his attorneys tried to dismiss a complaint from John Darjean whom Sanders owes $11.8 million stemming from a judgement tied to a 2015 assault.

One of Sanders’ attorneys called it an “overreaching intimidation tactic filled with meritless allegations." However, Judge Michael Romero wasn't buying it. He ruled at this stage in the case that a majority of Darjean’s claims were valid enough to be carried over into the upcoming trial. The former security guard, who was allegedly assaulted by Sanders, is trying to gain information on LLCs controlled by Coach Prime's son, which he's allegedly using to bankroll name, image and likeness deals. 

“The complaint contains sufficient allegations that Sanders’s companies function as his alter egos and that the corporate veils of the LLCs should be pierced,” Romero ruled on Thursday. He went on to detail the alleged non-disclosure of NIL funds prior to trial. 

“One of the primary issues in this case is Sanders’ treatment of his Name, Image, Likeness rights as a college athlete," Romero said. Darjean's attorneys argued that "Sanders’s wholly-owned LLCs are his alter egos whose corporate veils should be pierced." This is a process where the court will reveal assets of someone trying to shields assets from liability. "This Court is unwilling, at this stage of the proceedings, to rule out application of the alter ego or veil piercing doctrines," the judge said.

Romero also stated that Colorado law “appears to generally recognize both alter ego and veil piercing, or more accurately, outside reverse piercing, as legitimate remedies. The Court therefore denies Sanders’s request to dismiss Darjean’s claim purely on the basis it might involve assets owned by Sanders’s LLCs,” the judge said. “However, the Court cautions Darjean that "reverse piercing" is considered an 'extraordinary remedy' and he faces a high burden to demonstrate all necessary factors at trial.”

Outside of court, Sanders was part of Nike's campaign for his father's signature Diamond Turf line on Friday's global release date. He appeared in the latest ads for the world's largest outfitter with his brothers. There's was behind-the-scenes look of the entire Nike photoshoot put together by Well Off Media.

This has been a saga in the making over the past six years. Sanders was a no-show for court and it prompted a Texas judge to render the multi-million dollars judgement against him. Since that time, Darjean has been looking to collect damages in the case that started before the assault in 2015. But will Shilo duck out of the trial for a second time? Not likely as his attorneys have told CBS Sports that he "Cannot wait" to tell his side of the story in court.

"Darjean filed the Lawsuit because of the horrible and vicious attack committed by
Shilo on Darjean that occurred on September 17, 2015, according to court filings. "Shilo was represented by counsel and was a full participant in all proceedings through and until the trial. 

"For example, counsel for Shilo defended his deposition, brought motions for leave to file third party actions, appealed an associate judge’s decision denying a motion, filed motions to exclude expert testimony, and participated in discovery, among other pretrial activities. In an effort to escape liability and accountability, and after diligently contesting the Lawsuit through and until the trial, Shilo simply ignored all notices and refused to appear for trial." 

Sanders has since employed a team of lawyers to help wipe his slate clean. It's never a good look to have a bankruptcy case at the age 24 with more than $11 million in debt

What has to be proven in the case is the malice intent by Sanders to cause permanent injuries to Darjean. While there is enough evidence to prove responsibility in the matter, what can be said about Shilo's history of violence? The court filings in the case tell the story of Deion Sanders taking his son to a Juvenile Detention Center in Dallas, where he stayed for a month.  

"Prior to the attack, Shilo had numerous disciplinary and troublesome issues at FA. Shilo was disciplined for threatening a teacher just two weeks prior to the attack on Darjean, and the disciplinary problems FA had with Shilo were too numerous to list them all. In fact, every time Deion Sanders “turned around, someone [was] talking to him about a discipline problem that Shilo had.

"After the Incident, Darjean immediately filed a police report with the Dallas Police Department. Shilo was suspended from school immediately after the attack on September 17, 2015, and sent home. FA and/or the Academy barred Shilo from returning to school the following day. However, on September 18, 2015, Shilo returned to FA despite being suspended, to hunt down the student who supposedly “snitched” on him for shooting dice in class. Shilo found student “D.A” (a minor) and attacked him, committing assault and battery on D.A. Again, FA and/or the Academy barred Shilo from the school, and Shilo was sent home again.

"Deion Sanders took Shilo to the Dallas County Juvenile Detention Center due to Shilo’s violent, erratic, and dangerous conduct assaulting and battering Darjean and another student within 24 hours of each other. 

"On September 18, 2015, Deion Sanders transported Shilo to, and admitted Shilo into the Letot Center crisis intervention program where he stayed for 30 days. The Texas Department of Family and Protective Services investigated Shilo’s actions while Shilo was incarcerated and determined, based upon Deion’s testimony and video evidence from the school, that Shilo instigated the attack on Darjean and was to blame"

Sanders' attorneys are currently working to seal records in the case. It's unclear if that request will be granted by the judge at this stage. The judge’s ruling keeps the complaint active and will put Sanders truly on the defensive to try and discharge his debt. The case will be heating up into the heart of summer with several factors expected to be presented by both sides.