The Ecom Authority lawsuit story runs in two directions at once. In October 2024, the South Florida e-commerce management company sued Amazon over the mass shutdown of 595 seller accounts it managed, seeking roughly $28.6 million in damages.1Verified complaint, Ecom Authority, LLC v. Amazon.com Services, LLC, Case No. 1:24-cv-24084-CMA (S.D. Fla., filed Oct. 22, 2024). That case collapsed within months. Meanwhile, Ecom Authority’s own clients say the company took their money under false pretenses, and more than 400 investors are now pursuing legal action against it as it works through Chapter 11 bankruptcy in the Southern District of Florida.
What Ecom Authority Alleged Against Amazon
Ecom Authority filed its verified complaint on October 22, 2024, in the U.S. District Court for the Southern District of Florida, represented by Miami-based NT Legal. The suit was brought on behalf of the company and 595 Amazon seller accounts it managed for clients.
According to the complaint, Amazon began deactivating all 595 accounts around March 21, 2024, in what Ecom Authority called an “arbitrary and unjust” enforcement action tied to vague fraud concerns Amazon never substantiated. The company alleged that seller support agents refused to give real explanations, offering scripted lines such as “there is absolutely no path forward here” and “Amazon literally does not allow us to tell you anything.” Ecom Authority also argued that Amazon applied its policies inconsistently, suspending its accounts while leaving other sellers using the same suppliers and processes untouched.
Beyond the shutdowns, the suit alleged Amazon froze seller funds, seized inventory, and in some cases destroyed products unrelated to any alleged policy violation while continuing to charge storage and removal fees on the confiscated goods. Ecom Authority put total damages at roughly $28.6 million: about $7.9 million in inventory value, $524,759 in frozen funds, $1.7 million in Amazon fees, and $18.5 million representing the value of its management agreements with the affected clients.
The legal claims were breach of contract under Amazon’s Service Provider Network agreement, breach of the implied covenant of good faith and fair dealing, and breach of a third-party beneficiary contract. Ecom Authority asked for a preliminary injunction forcing Amazon to reinstate the accounts, unfreeze funds, return inventory, and stop further deactivations.
How the Amazon Case Ended
The court denied Ecom Authority’s request for a preliminary injunction twice, first on October 23, 2024, and again on November 25, 2024. On January 7, 2025, Chief Judge Cecilia M. Altonaga partially granted Amazon’s motion to dismiss, throwing out the third-party beneficiary claim without prejudice and allowing the remaining counts to proceed.
Court records show the case marked “terminated” as of February 10, 2025, though some docket activity continued into April 2026. A mediation had been scheduled for April 24, 2025, and a trial for October 2025, but neither appears to have gone forward given the termination and the company’s collapse that summer.
What Ecom Authority Sold Its Clients
Ecom Authority, formerly known as Dropshipping Direct LLC, marketed itself as a hands-off investment. For startup fees of $35,000 to $75,000, plus ongoing costs and a 10 percent cut of profits, it promised to launch and run “fully automated” Amazon seller accounts for clients, many of whom were small investors with no e-commerce experience. Daniel Cohen is identified in court filings as an affiliate of the LLC. Membership in Amazon’s Service Provider Network was used to establish credibility with prospects.
When Amazon began mass-suspending the accounts in early 2024, Ecom Authority pivoted to Walmart’s marketplace. That did not last. In May 2025, law enforcement notified the company that AirDoctor air purifiers in its inventory were suspected to be stolen goods. On May 23, 2025, Walmart terminated more than 600 stores linked to Ecom Authority, citing a code of conduct violation. A court filing described the effect bluntly: those terminations “effectively shut down ECom’s operations.”
Client Lawsuits and Fraud Allegations
Former clients had been raising alarms well before the shutdown. Better Business Bureau records show 32 complaints against Ecom Authority in the three-year period through mid-2026, with 20 closed in the most recent 12 months and 17 left unanswered by the company. Ecom Authority is not BBB accredited.
The complaints describe a consistent pattern. Clients say they paid large sums for store management services that were never properly delivered: stores that failed to launch, inventory that was never procured, and profits that never materialized. Individual losses frequently exceeded $100,000, with one complainant reporting approximately $171,000 in total losses. Clients also allege they were pushed into an affiliated tax filing service at $99 per month that they considered unnecessary but that generated substantial revenue for company leadership.
A group of more than 200 former clients has compiled data suggesting over $17 million in startup fees and unused inventory capital was collected, with some estimates from that group putting total losses across all affected clients at roughly $120 million. More than 400 investors are pursuing legal action against the company.
The Bankruptcy Case
Ecom Authority announced a permanent shutdown on June 4, 2025. The next day, it executed an Assignment for the Benefit of Creditors under Florida law, appointing Philip J. von Kahle as assignee to liquidate assets. At that point the company reported $780,359 in cash, $96,000 owed by Walmart, and just over $1 million in paid inventory not yet received from vendors, plus additional inventory held at a warehouse in Medley, Florida, and with Amazon and Walmart. Settle Funding, LLC held a blanket lien on the company’s assets with an outstanding balance of $3.1 million.
The state-level liquidation was cut short. On July 9, 2025, five former clients filed an involuntary Chapter 7 bankruptcy petition against Ecom Authority in the U.S. Bankruptcy Court for the Southern District of Florida (Case No. 25-17808-LMI). The company asked the bankruptcy court to abstain and send the matter back to state court; that request was denied on August 28, 2025. The next day, Ecom Authority moved to convert the case to Chapter 11, which the court approved on October 6, 2025.
Von Kahle was retained as Chief Restructuring Officer under the Chapter 11 case. His duties include selling remaining inventory, auctioning returned goods, receiving and processing creditor claims, and investigating the “historical flow of funds” through the company. The CRO’s office has been working through more than 1,300 pallets of inventory to sort out ownership and collateral rights.
On June 8, 2026, the debtor filed a motion to compel documents from Dawson Gant and GNA Investments, LLC, with a hearing set for July 15, 2026. The specific relationship between those parties and Ecom Authority has not been publicly detailed, but the use of a Rule 2004 examination, a broad bankruptcy discovery tool, suggests the CRO is casting a wide net in tracing where client money went.
Deadlines and What Clients Can Do
The proof of claim deadline for general creditors was December 12, 2025. Governmental units had until April 6, 2026. Store owners who could not be reached were given 60 days from a May 2026 court order to claim their share of net sale proceeds before those funds are deemed abandoned.
Ecom Authority has filed a Chapter 11 Plan of Liquidation and a supporting Disclosure Statement. A hearing to consider approval of the Disclosure Statement was scheduled for June 17, 2026. The case was reassigned from Judge Laurel M. Isicoff to Judge Peter D. Russin on June 7, 2026. Former clients tracking recovery should watch the bankruptcy docket under Case No. 25-17808 for further orders on the plan and any results of the fund-flow investigation.