Famous self-driving engineer Anthony Levandowski was forced into bankruptcy last year after losing a legal battle with Google over allegations that he stole trade secrets on behalf of Uber. Uber is now protesting against the proposed terms of his bankruptcy and arguing that he used legally dubious techniques to hide his assets from creditors.
Levandowski meets a skeptical bankruptcy judge. “I continue to see many of the transactions that Mr. Levandowski engaged in immediately before the filing of this bankruptcy case with an incredible yellow eye,”
Levandowski received tens of millions of dollars in compensation from Google in 2015 and 2016 for his work with self-driving technology. In October 2016, Google started an arbitration process to get the money back, claiming that Levandowski had stolen trade secrets from Google on his way out the door. Uber claims that Levandowski then took a number of steps to make it difficult for Google, Uber or other creditors to get their money back.
Among the transactions that sparked Uber’s ire: Levandowski used a donor-funded fund to raise $ 175,172 for Way of the Future, an AI “church” that Levandowski founded in 2017. The church received a thorough writing of our sister publication Wired in 2017. At that time Levandowski said he would not receive any salary from Way of the Future.
The focus of Uber’s objection is Levandowski’s request that the courts protect creditors’ $ 17.2 million in a Roth IRA. Tax law limited the Roth IRA contribution to $ 5,500 per year when Levandowski opened it in 2016 – a figure that has since risen to $ 6,000. So how did he accumulate $ 17.2 million in five years?
According to Uber, Levandowski deposited $ 4,326 in cash around April 2016 and used the money to buy 4,326,000 shares in Otto Trucking at a price of 0.1 øre per share. When Uber bought Otto, these shares were worth millions of dollars. Uber says Levandowski sold half of them for $ 11.9 million and kept cash in the IRA. He sold the rest of the shares to business partner Robert Miller, in exchange for a $ 5.3 million bond.
Pension accounts are often protected against creditors in bankruptcy proceedings. But Uber argues that the rule should not apply here because Levandowski broke several IRA rules when he created the account. Tax law requires that IRA money be used for investments in arms length. Uber claims that investing in Levandowski’s own company does not qualify.
Uber says Levandowski also took other steps to shield its assets from creditors. In 2017, for example, he bought a house for his father and stepmother for $ 949,000. He then “sold” it back to his stepmother for $ 720,000. Instead of paying cash, she gave him an unsecured promissory note with a balloon payment due in 2048, so she can effectively live in the home without renting for 30 years.
According to Uber, Levandowski invested $ 250,000 in a company founded by his fiancée on March 4, 2020, the same day he filed for bankruptcy.
In addition, Uber said Levandowski lent more than $ 10 million to units controlled by his colleague and longtime business partner Randall Miller. He drew millions more to his new self-propelled startup Pronto.ai.
Uber urged Judge Blumenstiel not to accept Levandowski’s claim that he needed $ 17.2 million in his IRA to support himself in retirement. Uber pointed out that Levandowski has more than $ 400,000 in more conventional retirement accounts that are likely to be protected in bankruptcy. Although his various other assets are removed in the bankruptcy process, the company argued that the 40-year-old’s skills as an engineer and manager should enable him to earn a living for the next 20 years.