Indiana pickleball entrepreneur Rodney Grubbs forced into bankruptcy over unpaid loans

A federal judge has forced an embattled Indiana pickleball apparel and equipment entrepreneur into bankruptcy after his investors testified they had no confidence he will ever repay loans they gave him.

Judge Robyn L. Moberly granted the creditors' petition to open an involuntary Chapter 7 bankruptcy case Wednesday for Rodney "Rocket" Grubbs of Brookville. Grubbs is accused of convincing hundreds of people from across the U.S. to giving him loans in exchange for short-term, high-interest investment opportunities with his company, All About Pickleball LLC, which does business as Pickleball Rocks.

As part of the bankruptcy case, Moberly will appoint a trustee to take over Grubbs' assets and determine what can be sold in order for creditors to possibly recoup their funds.

More: Pickleball apparel CEO, dubbed sport's 'ultimate ambassador,' accused of Ponzi scheme

Separately, the Indiana Secretary of State's securities division has issued a cease and desist order to Grubbs for issuing unregistered promissory notes for the loans. Grubbs said during court that he immediately complied with the order.

Several of Grubbs' investors traveled to Indianapolis from other states — including Florida, Kansas, Ohio and North Carolina — to attend the hearing. Others came from across Indiana. They all accused Grubbs of allegedly operating a Ponzi scheme, a claim he denies.

The spurned investors typically met Grubbs, who is described as personable and friendly, at pickleball tournaments where he participated as a player and promoted his business. They say he asked them for money, in some cases soliciting additional funds before paying off earlier loans, under the pretense they were among an exclusive handful of investors.

Now, they claim Grubbs failed to pay up when the loans came due, ignoring texts, emails and other requests to give back their money.

In court Wednesday, several investors testified Grubbs asked them for loans — typically in the amount of $25,000 — to buy inventory or to repay others cashing out their investments in his company. He would roll over loans when he couldn't repay them or ask for additional investments, they told the judge.

Joe Gilmore, a retired commodities trader from Tennessee, testified he considered Grubbs a friend. Grubbs and his family even stayed at his home several times during their travels to pickleball events. Gilmore said he invested in Pickleball Rocks after Grubbs told him another investor was cashing out and needed to pay for their adult child's wedding. Gilmore said after the hearing that he is owed a total of $50,000.

Jennifer Butler of Florida testified she had four promissory notes totaling $90,000.

"He won't answer," Butler testified.

Investors have also said Grubbs continued soliciting new investors despite a pattern of defaulting.

Grubbs appeared at the hearing without an attorney. In an opening statement to the court, Grubbs explained he has retained legal representation for the state's securities investigation and that attorney — whom he identified as Paul Vink of Bose Mckinney & Evans in Indianapolis — advised him not to answer questions about individual personal loans. Vink is not representing Grubbs in the bankruptcy case, Grubbs said. IndyStar reached to Vink to confirm Grubbs' claim but he did not immediately respond.

Early on in the hearing, Grubbs asserted his Fifth Amendment rights to any questions about individual personal loans. When cross-examined later by Indianapolis attorney Matt Foster of Foster Law LLC, he answered more questions than he originally indicated he would.

Grubbs testified his bank accounts are empty, and he's two months behind on his mortgage. Under questioning from Foster, Grubbs did not dispute that he owed the debts. He also said in court that he "borrowed" a lot of money for "projects." After the hearing, when IndyStar asked about the nature of those projects, Grubbs declined to say what they were. However, he did say his debts go as far back as 2005.

In response to Foster, Grubbs admitted signing the promissory notes submitted to the court as evidence and said Pickleball Rocks has never had more than two workers, who were independent contractors. He also acknowledged that he did not appear for three civil lawsuits filed in Franklin County by investors. Those cases resulted in more than $9 million in default judgements against him.

Grubbs pleaded the Fifth Amendment again when asked happened to the investors' funding.

"It involves a lot of people," he said. "It goes way back."

In both his answer to the petition and in open court, Grubbs argued he should not be forced to sell Pickleball Rocks at his time. Investors would get more if they waited, he said, telling the judge the brand is his most valuable asset. And while 2023 sales were an estimated $367,000, he said the value of Pickleball Rocks will appreciate in the future, given the popularity of the fast-growing sport, if the company is acquired by a new owner. Under the right management, Grubbs said, the company could reach a $1 million in 36 months and investors would get more if they waited.

Moberly was not moved. The judge told Grubbs she wasn't buying his "sales pitch."

Foster said Grubbs used connections and friendships in the pickleball world to find investors. What troubles Foster is that many pulled from their retirement and savings accounts to help Pickleball Rocks grow. Another invested their child's college fund. The attorney said he spoke to one person who had promissory note that goes back to the 1990s. Some investments also concerned real estate.

Grubbs is unremorseful, Foster said, adding "he's a sociopath."

The case landed in Foster's lap in early December. It's his first involuntary bankruptcy case. As of Wednesday morning, Foster said he had 135 clients and has communicated his concerns to federal agencies given the use of wire transfers and potential tax issues. Connersville attorney Wayne Greeson of the Law Offices of Wayne Greeson said after court he was in an unusual position. In addition to representing clients who've joined the bankruptcy case, he's also a victim.

Greeson said he played pickleball with Grubbs at least once a week for years in the Brookville area. Grubbs approached him for an investment and he loaned him $25,000. He, too, has yet to be paid back.

"I only gave it," Greeson said, "because I considered him a friend."

How many creditors Grubbs has is unclear. He told the judge Wednesday the number is approximately 265. But given how widespread he solicited for investors, attorneys said some people are still finding out about the accusations against Grubbs and could still come forward.

Foster expects the court to set a deadline for creditors to file claims. He said secured creditors would be first in line for repayment. Most of the promissory notes are unsecured loans, meaning Grubbs posted no collateral other than a promise to pay interest and penalties if he defaulted.

After the hearing, Grubbs told IndyStar he didn't use the investment dollars for personal gain. He said he didn't buy boats, fancy cars or other material items. He declined to say why he sought multiple investors for his for-profit company and denied the Ponzi scheme accusations, saying the fraud allegations needed to be handle with more care.

"There's nothing illegal about using their money to pay off another person, and I did use it for that," he said.

Foster, however, called that a "textbook Ponzi scheme."

Contact IndyStar investigative reporter Alexandria Burris at aburris@gannett.com. Follow her on X, formerly Twitter, at @allyburris.

This article originally appeared on Indianapolis Star: Pickleball entrepreneur pushed into bankruptcy in alleged loan scam