A black line was scrawled over a ShotStop Ballistics logo on a sign at the Stow business park earlier this year where the company had been headquartered.
ShotStop Ballistics, a maker and supplier of ballistic plates, body armor and related products in Stow, Ohio — which ceased operations several months ago amid an ongoing federal investigation into the business — has filed for Chapter 7 bankruptcy.
ShotStop was founded in 2015 by president and majority owner Vall Iliev, an immigrant entrepreneur and serial businessman with a background in industrial engineering and product design.
In its bankruptcy petition, filed May 4 in the U.S. Bankruptcy Court in Akron, Ohio, ShotStop reported $357,015 in estimated assets and approximately $642,200 in liabilities. The company lists at least 191 creditors, seemingly all of which are investors.
ShotStop reported approximately $5 million in annual revenue for 2023 and $4.5 million in revenue for 2022.
Attorney Peter Tsarnas of Akron law firm Gertz & Rosen Ltd. is representing ShotStop in the case. Tsarnas has so far been paid $20,000 for pre-bankruptcy services and $10,000 in other attorney fees, according to the Chapter 7 petition.
Tsarnas and Iliev did not immediately respond to a request for comment on May 9.
Cleveland Business Journal was first to report the bankruptcy filing.
Federal investigation
As Crain’s previously detailed, Iliev has been moving to wind down ShotStop since a federal raid of the company on Oct. 18.
The federal investigation remains ongoing, and as of publication, a review of court dockets indicates that any federal charges have yet to be formally filed against the company.
“Homeland Security Investigations, with assistance from the Ohio Bureau of Criminal Investigations, recently began an investigation into ShotStop, LLC, an Ohio-based provider of ballistic body armor,” according to a notice from the Ohio Attorney General’s office sent to Ohio law enforcement agencies in conjunction with the raid and obtained by Crain’s through a records request. “During the course of the investigation, information was received that certain ShotStop Level III and IV ballistic rifle plates may not have been manufactured in the United States or (National Institute of Justice) certified, as represented. The investigation is continuing. At this time, all efforts are being made to identify the impacted plate models and dates of manufacture.”
Out of an abundance of caution, we are making law enforcement agencies who may have purchased or are currently using ShotStop Level III and IV ballistic rifle plates aware of this potential misrepresentation, which could impact the integrity and stopping power of the plates,” the notice continues. “Additional information will be provided as it becomes available. If your agency believes they may have any impacted plates contact [email protected].”
The raid caught many investors in the business by surprise.
“In angel investing, sometimes some things wither on the vine,” said one ShotStop investor, who spoke with Crain’s confidentially earlier this year amid the pending investigation. “But we didn’t expect something like this to happen.”
In past emails to investors, Iliev stated that the company had not received any orders or fulfilled any sales since Oct. 18.
Other lawsuits stayed
ShotStop and Iliev have also been the subjects of a couple investor lawsuits in Summit County, which Crain’s reported on in detail.
The lead plaintiffs in those cases include the entities News Ventures LLC (of Avon Lake) and M&M Management Solutions LLC (of Berea), both of which were created for the purpose of investing in ShotStop.
In lawsuits brought by both groups, ShotStop and Iliev are accused of breach of contract and tortious interference with contractual relations.
There are claims in each case involving allegations of the company refusing to allow plaintiff investors to access company books and records — something they would purportedly be entitled to, per related operating agreements.
Both M&M and News Ventures are being represented in their suits by Wayne Serra, an attorney specializing in intellectual property law who also is an indirect investor in ShotStop via News Ventures.
Due to the bankruptcy proceedings, however, both of those cases are now stayed, according to court filings.
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