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Well-known self-driving engineer Anthony Levandowski was forced to declare bankruptcy last year after losing a legal battle with Google over allegations that he stole trade secrets on behalf of Uber. Now Uber is objecting to the proposed terms of its bankruptcy, arguing that it has legally used dubious techniques to protect its wealth from creditors.
Levandowski faces a skeptical bankruptcy judge. “I remain pleased with many of the transactions in which Mr Levandowski entered the bankruptcy case immediately before the filing of this bankruptcy case,” Judge Hannah Blumenstiel said in a telephone conversation last week.
Levandowski received tens of millions of dollars in compensation in 2015 and 2016 for his work on self-management technology. In October 2016, Google began an arbitration process to withdraw the money, arguing that Levandowski stole Google’s trade secrets when he was out the door. Uber claims that Levandowski subsequently took a number of steps to make it difficult for Google, Uber or other creditors to get their money back.
Some of the deals that sparked Uber’s anger: Levandowski is using a fund donated by donors to donate $ 175,172 to Way of the Future, an AI church that Levandowski founded in 2017. The church received an in-depth letter through our sister publication Wired in 2017. Levandowski said at the time that he would not receive any salary from Way of the Future.
The focus of Uber’s objection is Levandowski’s request that courts protect creditors’ $ 17.2 million in a Roth IRA. Tax legislation limited Roth IRA contributions to $ 5,500 a year when Levandowski opened it in 2016 – a figure that has since risen to $ 6,000. So how did he raise $ 17.2 million in five years?
According to Uber, around April 2016, Levandowski paid $ 4,326 in cash and used the money to buy 4,326,000 shares of Otto Trucking at a price of 0.1 cents per share. When Uber acquired Otto, these shares became worth millions of dollars. Uber says Levandowski sold half of it for $ 11.9 million and kept the cash within the IRA. He sold the rest of the shares to his business partner Robert Miller, in exchange for a $ 5.3 million bond.
Retirement accounts are often protected from creditors in bankruptcy. But Uber argues that the rule should not apply here because Levandowski violated several IRA rules when he drafted the bill. Tax legislation requires IRA money to be used for arms length investments. Uber claims that investing in Levandowski’s own company does not qualify.
Uber says Levandowski has also taken other steps to protect 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 the stepmother for $ 720,000. Instead of paying cash, she gave him an unpaid promissory note with a balloon payment that would be payable in 2048 so she could live in the house rent-free for 30 years.
According to Uber, Levandowski invested $ 4 million 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 entities controlled by his college friend and longtime business partner Randall Miller. He moved millions more to his new self-management business, Pronto.ai.
Uber has asked Judge Blumenstiel not to accept Levandowski’s claim that he needs the $ 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. Even though his various assets are being plundered in the bankruptcy process, the 40-year-old’s skills as an engineer and manager have enabled him to make a good living over the next 20 years.