GloriFi: The $1.7 Billion Bank That Never Opened
Published October 30, 2026
GloriFi, the Texas fintech founded by billionaire Toby Neugebauer to serve politically conservative customers, planned to go public through a merger with a special-purpose acquisition company at an estimated valuation of $1.7 billion. The deal with DHC Acquisition Corp. collapsed, the company filed for Chapter 7 bankruptcy in February 2023, and its trustee later sued the law firm Winston & Strawn for more than $1.7 billion, alleging the firm prioritized the founder's personal interests over the business and helped drive the company's valuation to zero within months. The firm denies the claims and sought dismissal, but a Texas bankruptcy judge let the malpractice claim proceed in 2026, and on October 5, 2026, Neugebauer asked to join the suit to defend himself.
GloriFi was founded to be a bank for customers who felt alienated by mainstream institutions. The Texas fintech, legally known as With Purpose Inc., aligned itself with conservative values and pitched itself as a bulwark against what its founder called cancel culture, attracting high-profile conservative investors. Its founder was Toby Neugebauer, a Texas oil and gas investor. By late 2021 the company had ambitions to match its branding: it hired the law firm Winston & Strawn to guide a proposed merger with a special-purpose acquisition company, a deal that would have taken GloriFi public at an estimated valuation of 1.7 billion dollars.
The merger never closed. The transaction with DHC Acquisition Corp. fell apart, and in February 2023 GloriFi filed for Chapter 7 bankruptcy, the form of bankruptcy that liquidates a company rather than reorganizing it. A startup that had been valued in the billions on paper was suddenly worth nothing, and the question of who was responsible for the collapse moved into the courts, where it has stayed ever since.
In September 2025, the Chapter 7 trustee, Scott M. Seidel, sued Winston & Strawn and one of its partners, Michael Blankenship, for more than 1.7 billion dollars. The complaint alleged legal malpractice and breach of fiduciary duty, arguing that the firm prioritized the personal interests of the company's founder over the business itself. The trustee contended that the firm's work helped drive GloriFi's valuation from 1.7 billion dollars to zero within months, and that its wrongdoing was a proximate cause of nearly 2 billion dollars in lost enterprise value. The complaint references Neugebauer at least 176 times.
The specific allegations concern governance. The trustee accused the firm of helping Neugebauer orchestrate the removal of independent directors who opposed what the suit calls self-dealing transactions, replacing them with allies, and of helping amend corporate documents to enable those transactions. The suit also seeks payback of nearly 800,000 dollars in attorneys' fees. The firm has pushed back firmly: it argues it performed routine legal work at the company's direction, that it had no obligation to override the decisions of the company's governing principals, and that it is not liable for GloriFi's business failures. A separate suit by the trustee against another law firm, Chapman & Cutler, makes similar allegations about its role.
In April 2026, the case cleared a significant hurdle for the trustee when a Texas bankruptcy judge ruled that the malpractice claim could mostly proceed, rejecting the firm's bid to dismiss it. Then, on 5 October 2026, Neugebauer himself asked to intervene in the suit. He argued that because the case centres on accusations of his alleged fraud and self-dealing, he should be allowed to defend himself: findings of fact or conclusions of law entered in a proceeding where he has no seat at the table, his motion said, could be used against him in several related cases. He is also seeking a declaratory judgment that he did not breach any fiduciary duties to GloriFi, and an order compelling the company to pay his legal defence fees.
Whatever the courts ultimately decide about who is at fault, the shape of the loss is already clear. GloriFi's brand was its pitch, but a brand is not a balance sheet, and a public listing is not a business. The company's value depended on closing a complex merger, and the governance fights around that merger consumed the company instead. The lesson is a sober one for any founder: the directors who push back on a founder's plans are not always obstacles to be removed. Sometimes they are the last guardrail between a billion-dollar valuation and zero, and once they are gone, there may be nothing left to argue about except who pays for the wreckage.
The lesson: A company built on a cultural brand still lives or dies on governance: when the directors who object to self-dealing are removed, the value tends to follow them out the door.
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