Flipcause Lawsuit and the $29M Nonprofit Donation Collapse

The Flipcause lawsuit is a federal class action filed in October 2025 accusing the Oakland-based fundraising platform, its CEO Sean Wheeler, and co-founder Emerson Ravyn of running a “nationwide scheme to defraud” more than 3,200 nonprofits out of roughly $29 million in donated funds. The case, LMSA-NE et al. v. Flipcause, Inc. et al. (Case No. 4:25-cv-09047, N.D. Cal.), was stayed on December 19, 2025 after Flipcause filed for bankruptcy, and the proceeding has since converted to a Chapter 7 liquidation. Affected nonprofits now recover through the bankruptcy claims process, though personal fraud claims against the executives remain live.

What the Class Action Alleges

The Latino Medical Student Association-Northeast filed the original complaint in October 2025. An amended complaint on November 11, 2025 grew the case to 29 plaintiff organizations from 18 states.¹

At the center of the complaint is a simple accusation: Flipcause collected donations for charities, promised to remit them after a 1.5 percent processing fee, and then didn’t. Instead, according to the pleading, the company commingled nonprofit donations in a “Settlement Fund” registered in its own name rather than segregating them as California law requires.²

The 29 named plaintiffs say Flipcause is holding $782,992 from them alone. Individual amounts range widely:

Chicago Coalition for Family Building: $88,292
LMSA-NE: $75,224
Angels for Change: $72,962
Keeping Our Promise: $51,198
Friends of Manual High School: $39,837
Black Girls Smile: $29,097

The suit seeks class certification for all U.S. nonprofits that used the platform since November 2022, and asks for at least $5 million in damages. Plaintiffs are represented by Juyoun Han and Eric Baum of Eisenberg & Baum, LLP, with The Buche Law Firm as local counsel.²

Where the Money Went

Bankruptcy filings supplied the answer that months of delayed payouts had left nonprofits guessing at. Between December 2024 and the December 19, 2025 bankruptcy filing, Flipcause paid $3,830,975 to executives, their family members, and companies they controlled. The executives described these transfers as “bridge financing” or repayment of loans they said they had made to the company.³

Court records disclosed at a December 22, 2025 hearing broke the payments down:

Emerson Ravyn (co-founder, executive chairman): $3,285,069, including $455,400 to himself, $2.76 million to his corporation RGI Venture Studio, and $66,469 to Lockwell, a cybersecurity firm he runs.
Rolando Valiao (co-founder, former CEO, also known as “Romeo Ocean”): $270,125.
Sean Wheeler (CEO) and Jessica Wheeler (employee, spouse): $275,781 combined.

At the same hearing, Ravyn testified that Flipcause’s position was that donations made through the platform were payments to Flipcause rather than donations to the nonprofits.⁴

Insider loan repayments made within a year of a bankruptcy filing are vulnerable to clawback actions. The bankruptcy trustee has confirmed an investigation into these payments, but no formal clawback lawsuits have been filed against the executives as of mid-2026.⁵

The California Attorney General’s Cease-and-Desist Order

On November 14, 2025, Attorney General Rob Bonta issued a cease-and-desist order to Flipcause and Sean Wheeler, ordering the company to stop all charitable solicitations in California.⁶

The order cited three violations of Assembly Bill 488, the state’s fundraising platform law: failing to register with the California Registry of Charities and Fundraisers despite being notified of the requirement in October 2019, failing to file mandatory annual reports, and failing to remit donations within the required five business days. The state identified 14 organizations with unreturned donations aged over 60 days, with individual balances ranging from $805 to $144,746.⁷

The order assessed $70,000 in penalties, added $100 per day until compliance, and required Flipcause to provide a full accounting of all charitable assets it had handled since 2015 and to transfer its cash into a blocked bank account. Flipcause appealed.⁸

What the Bankruptcy Did to the Lawsuit

Flipcause filed for Chapter 11 bankruptcy on December 19, 2025 in the U.S. Bankruptcy Court for the District of Delaware (Case No. 25-12246). The petition listed $30 million in total liabilities, with $29 million owed to 3,276 unsecured creditors, nearly all of them nonprofits. Flipcause reported $70,000 in its primary bank account and claimed $20.2 million in assets, though $15 million of that was attributed to the intangible value of its web platform.⁸

The filing triggered an automatic stay of the class action. The federal case was administratively closed on December 19, 2025, and class certification was never sought or ruled on before the stay took effect. Bankruptcy does not eliminate the personal fraud claims against Wheeler and Ravyn, so those claims survive even while the corporate defendant is frozen.⁹

In April 2026, Trustee Jeffrey Testa of McCarter & English LLP asked the court to convert the case from Chapter 11 to Chapter 7 liquidation, citing the absence of operating revenue. The conversion was finalized on April 29, 2026.¹⁰ Two settlements accompanied the shift: Stripe agreed to release roughly $550,000 to the estate, and Grand Avenue Investments, LP capped its secured claim at $825,000 and assigned its litigation claims against Ravyn to the bankruptcy estate. A “carve out reserve” set aside $300,000 to fund the incoming Chapter 7 trustee’s investigations and potential clawback actions against insiders.¹¹

Several nonprofits and attorneys for the proposed class have objected to the Stripe settlement, arguing that at least some of the frozen funds are charitable donations that belong to the nonprofits, not general assets of the Flipcause estate.¹¹

The platform itself was sold on March 18, 2026 to Software4Nonprofits, a Canada-based donor management company, for $400,000. S4NP acquired the assets free and clear of Flipcause’s debts, so buying the platform did not carry any obligation to repay affected nonprofits. CEO Scott Rassatt directed organizations still owed money to file claims through the bankruptcy court.¹²

If Your Nonprofit Is Owed Money

Recovery now runs through the bankruptcy claims process, not the class action. As of March 2026, only about 357 organizations had filed claims through the bankruptcy court, out of the more than 3,200 listed as creditors.¹² Case information and filing instructions are available through the trustee’s claims agent.¹⁰

Be realistic about what a claim recovers. The trustee estimated that priority claims from administrative professionals, bankruptcy lawyers, and secured creditors range from $2.5 million to $3.6 million. Unsecured creditors, which is the category nonprofits fall into, stand last in line. Full repayment is widely considered unlikely, and the Chapter 7 process could stretch for years.⁴

The scale of individual losses reflects the range of organizations caught. Sweet Relief Musicians Fund is owed $1.2 million, the largest single amount in the filings. 805 UndocuFund is owed $352,500 and Second Harvest of the Greater Valley is out $172,457.¹³ Smaller organizations were hurt in proportion to their budgets. R.A.C.E. Matters SLO, owed $27,000, closed its community hub. St. George Episcopal Mission in Leadville, Colorado, lost nearly $28,000 intended for a food pantry.⁴

The Official Committee of Unsecured Creditors includes Sweet Relief Musicians Fund, 805undocufund, LMSA-NE, Second Harvest of the Greater Valley, and The Michelle O’Neill Foundation, and represents unsecured creditor interests in the bankruptcy.¹⁰

The Separate Suit Against Emerson Ravyn

On January 27, 2026, Grand Avenue Advisors sued Ravyn personally in New York Supreme Court in Kings County. The suit alleges Ravyn “absolutely and unconditionally” guaranteed a $600,000 loan the investor made to Flipcause in August 2023, and that the company defaulted on payments in August, September, and October 2025. Grand Avenue is seeking at least $1,155,290. Bankruptcy records show Ravyn also personally guaranteed two additional loans, $100,000 from Firmage Investments and $50,000 from Willden Properties.¹⁴

No criminal charges have been filed against any Flipcause executive as of mid-2026.¹⁵

1
Oakland Voices. Nearly 30 Organizations Join Federal Lawsuit Against Flipcause
2
Eisenberg & Baum, LLP. LMSA-NE et al. v. Flipcause, Inc. et al., Amended Complaint
3
Oakland Voices. Flipcause Executives Paid Themselves Millions Nonprofits Waited Bankruptcy
4
Nonprofit Quarterly. Nonprofits in Limbo as Flipcause Bankruptcy Unfolds
5
Nonprofit News Feed. The Downfall of Flipcause: A Cautionary Tale
6
California Office of the Attorney General. Attorney General Bonta Warns Fundraising Platform Flipcause Immediately Stop Its Operations
7
Oakland Voices. Order to Cease and Desist, Case No. 2025-FP0003456
8
Oakland Voices. Flipcause Bankruptcy Chapter 11 Nonprofits Owed Millions
9
PACER Monitor. The Latino Medical Student Association-Northeast v. Flipcause, Inc. et al.
10
Epiq. Flipcause, Inc. Bankruptcy Case Information
11
Oakland Voices. Flipcause Chapter 7 Bankruptcy Conversion Lawsuits
12
Oakland Voices. Software4Nonprofits Flipcause Purchase
13
Oakland Voices. Flipcause Bankruptcy Sale Nonprofit Repayment Missing Donations
14
Oakland Voices. Private Equity Investor Sues Flipcause Founder Emerson Ravyn
15
Chronicle of Philanthropy. Lessons From the Flipcause Collapse