Winston & Strawn Sued in ‘Anti-Woke’ Banking Startup Bankruptcy

A trustee administering the bankrupt “anti-woke” financial services startup GloriFi sued Winston & Strawn LLP and one of its partners for more than $1.7 billion, alleging they prioritized the personal interests of the company’s founder over the business.

The firm and its Houston office managing partner, Michael Blankenship, engaged in legal malpractice and breached their fiduciary duty, trustee Scott M. Seidel said in a complaint Wednesday in the US Bankruptcy Court for the Northern District of Texas.

With Purporse Inc.—the legal name of GloriFi— hired the firm at the end of 2021 to guide a proposed merger with a special-purpose acquisition company to go public and reach an estimated valuation of $1.7 billion, the suit said.

“Winston Strawn’s wrongdoing was a proximate cause in the nearly $2 billion in lost enterprise value suffered by GloriFi,” the trustee alleged.

The complaint is part of a complex legal back and forth between Texas oil and gas investor Toby Neugebauer and investors related to the control and eventual closure of the banking and financial services company he founded. The company, which filed for Chapter 7 in February 2023, aligned itself with conservative values of potential customers and aimed to serve as a bulwark against “cancel culture” and liberal institutions, according to court papers.

Neugebauer is also the co-founder of Houston private equity firm Quantum Energy Partners LP.

GloriFi was allegedly run out of Neugebauer’s Dallas home and was backed by investors that included Peter Thiel, Ken Griffin, former presidential candidate Vivek Ramaswamy, and former Vice President Mike Pence’s chief of staff Nick Ayers, according to a separate suit filed earlier this year against the former CEO.

The suit comes after Judge Michelle V. Larson earlier this year approved a deal allowing GloriFi Acquisitions LLC, an entity tied to investor and claimant Jackson Investment Group LLC, to pursue potential claims in the name of Seidel, the Chapter 7 trustee of With Purpose. That settlement allowed Seidel to transfer Glorifi’s assets and potential causes of action to GloriFi Acquisitions.

The trustee’s suit accuses Winston & Strawn and Blankenship of negligence, aiding and abetting breaches of fiduciary duty, and fraudulent transfers related to the failed de-SPAC deal and GloriFi’s collapse. The trustee alleged the firm saw Neugebauer as a “cash cow” and protected his interests over GloriFi, according to the complaint.

Winston & Strawn helped Neugebauer develop plans to “remove independent directors who stood in the way of” his “self-dealing,” stack the company’s board with his friends and business partners who would approve his wishes, the trustee said. That board changed GloriFi’s governing documents to force through self-interested transactions, the complaint alleges.

The firm’s “negligence and intentional bad acts” caused GloriFi’s potential investors, including Thiel, Griffin, and Ramaswamy, to lose confidence in GloriFi and not be able to close the deal and go public, the suit said.

The trustee seeks damages related to GloriFi’s alleged $1.7 billion in lost enterprise value and payback of nearly $800,000 in attorneys fees based on allegations of conflicted and improper representation, according to the complaint.

The trustee earlier this year also sued Chapman & Cutler LLP on allegations that it played a role in the company’s downfall by aiding Neugebauer’s alleged self-dealing efforts.

The trustee is represented by Iacuone McAllister Potter PLLC. Neugebauer is represented by Texas Trial Group.

The case is With Purpose Inc., Bankr. N.D. Tex., No. 23-30246, complaint 9/17/25.