A federal judge has issued another decision regarding the bankruptcy case of Colorado football player Shilo Sanders, again denying his bid to completely dismiss a lawsuit filed by a former school security guard, to whom Sanders still owes $11 million.

This marks the second ruling since June on Sanders’ motion to dismiss one of the claims brought by former security guard John Darjean. Initially, Judge Michael Romero dismissed certain elements of Darjean’s complaint but allowed him to revise and resubmit those parts. Following this, Sanders’ legal team requested the court to dismiss the revised complaint as well.

However, in the latest ruling on Monday, the judge did not fully grant Sanders’ request. Consequently, much of Darjean’s complaint will proceed to trial as he seeks to ensure Sanders remains accountable for his $11 million debt. Sanders, 24, declared bankruptcy last October and is the son of Colorado head coach Deion Sanders.

“Darjean has sufficiently identified assets formerly owned by the Sanders, which are unavailable to pay creditors as they were not listed in the bankruptcy schedules,” the judge noted in his ruling on Monday. “Regarding those specific omitted assets, the Court finds Darjean has adequately stated a claim under (the law).”

Judge Addresses Shilo Sanders’ NIL Agreements

The ruling examined various concerns raised by Darjean related to Sanders’ earnings from name, image, and likeness (NIL) deals and whether Sanders may have hidden or failed to disclose assets from these agreements in bankruptcy proceedings.

Darjean argued that the omission of these records could justify denying Sanders a discharge of his debts, as legal regulations prohibit debtors from hiding or destroying financial records.

“In the Amended Complaint, Darjean claims that Sanders deleted certain social media posts about paid promotional activities and displaying various jewelry and other assets,” the judge remarked.

Sanders’ attempt to dismiss this claim was also rejected by the judge. He highlighted that the bankruptcy trustee had previously asked Sanders to submit certain documents, which were not provided, according to the trustee’s statements. Sanders’ legal team contended that he has been cooperative.

“In this case, Sanders’ income and business derive from his NIL rights,” the judge stated. “Should Sanders capitalize on his NIL rights via social media posts, as alleged by Darjean, those posts may be considered business records. Therefore, Darjean’s claims regarding the deletion of social media posts could substantiate his… claim. Thus, the Court will deny Sanders’ renewed motion to dismiss this claim, which is linked to records in the Trustee’s motion and social media posts.”

Additional Findings from the Ruling and the Situation Overview

The judge partially granted and partially denied Sanders’ motion to dismiss Darjean’s renewed complaint. However, he completely dismissed only one of Darjean’s five remaining claims, which sought to recover attorney fees from Sanders. Additionally, the judge rejected part of a claim alleging that Sanders fraudulently transferred his NIL rights or earnings, citing insufficient details to support that specific claim but allowed the rest of Darjean’s claims to move forward.

Shilo Sanders filed for bankruptcy after Darjean sought to enforce the $11 million debt stemming from an incident in 2015 when Shilo was in ninth grade. Darjean claimed that Shilo caused him permanent injuries after striking him in the chest with a roundhouse elbow while he was trying to confiscate Sanders’ phone at school.

Darjean subsequently sued Sanders for damages, but the case did not go to trial until 2022. Sanders did not present a defense during the trial, yet the court heard evidence and issued an $11 million default verdict against him.

What Does Shilo Sanders Aim to Accomplish?

By filing for bankruptcy, Sanders hopes to eliminate the debt so he can achieve a “fresh start in life, unburdened by financial obligations,” according to statements from his attorneys.

In contrast, Darjean is actively working to ensure Sanders remains responsible for the debt and has lodged two formal complaints in bankruptcy court to obstruct its discharge. One of these complaints, which was ruled on Monday, alleges that Sanders concealed or failed to disclose assets during the bankruptcy filings.

The other pending complaint contends that the law prevents Sanders from discharging the debt because it results from a willful and malicious act.

Currently, Sanders is a graduate student at Colorado and is sidelined with a forearm injury, but he is anticipated to return for the Buffaloes’ next game against Kansas State on October 12.