A Chapter 7 trustee has filed suit alleging that the controlling manager of a defunct internet-freedom company quietly transferred its entire operating business - a widely used censorship-circumvention platform called Lantern - into a nonprofit he personally founded and ran, just weeks before placing the original company into bankruptcy as an empty shell. The case, brought by trustee Alfred T. Giuliano against Adam Fisk and Brave New Software Project, Inc., centers on claims of fraudulent transfer, breach of fiduciary duty, and unjust enrichment tied to a tool that helps users in heavily censored regions reach the open internet.
Lantern belongs to a category of circumvention technology that sits alongside commercial VPN services but serves a distinct purpose: rather than simply encrypting traffic for privacy, it is designed to route around government-imposed blocks on websites and applications, often in countries where conventional VPN use is itself restricted or monitored. These tools typically rely on peer-assisted routing, obfuscation techniques that disguise traffic patterns, and distributed server networks to stay ahead of state-level blocking efforts. For ordinary users evaluating any such tool, understanding who actually owns and operates it - and what happens to their data once collected - matters as much as the technology itself, which is why independent guidance on what to check before installing a free VPN has become increasingly relevant as circumvention and privacy tools multiply and ownership structures grow more opaque.
A 2019 Deal and a Quiet Reversal
According to the complaint, BNS originally sold the Lantern business to Innovate Labs in 2019 through an asset purchase agreement that assigned Innovate the Lantern trademark, its core domains, its server infrastructure, its code repository, and all user data generated through the platform. That agreement explicitly barred BNS from using or benefiting from those assets going forward. The trustee alleges that five years later, in the period immediately preceding Innovate's bankruptcy filing, those same assets - domains, app-store listings, billing accounts, and the user base itself - were re-registered in BNS's name without any recorded payment to Innovate.
The filing describes a corporate structure in which one person, Fisk, occupied leadership roles on both sides of the transaction: as Innovate's chief executive and largest member, and simultaneously as BNS's founder and executive director. The two organizations reportedly shared staff, financial leadership, servers, and even a single product line, with cost-sharing arrangements that the trustee says shifted dramatically in BNS's favor over time. By the account given in the complaint, BNS grew from having no employees to eleven, began booking substantial subscription revenue from the paid "Lantern Pro" product starting in 2024, and listed Innovate as having ceased operations that same year.
Why Governance Failures in Nonprofit-Linked Tech Matter
Circumvention and privacy tools occupy a sensitive niche because they often depend on charitable or grant funding, government support, and user trust built over years of operating in hostile environments. When the entity controlling such a tool changes hands through insider dealing rather than transparent transaction, users have little visibility into who now holds their data or governs the service's policies. The lawsuit's core legal theories - fraudulent conveyance, breach of fiduciary duty, and equitable subordination of insider claims - are standard bankruptcy remedies, but their application here highlights a broader governance risk in mission-driven technology ventures: when one individual controls both a for-profit or member-owned entity and an affiliated nonprofit, conflicts of interest can go unchecked until insolvency forces disclosure.
The trustee is seeking recovery of the business and its revenues, which he estimates could exceed $20 million, along with a constructive trust over the Lantern platform and disallowance of claims filed by the insider defendants. Regardless of the case's outcome, it underscores a lesson for users of any circumvention or privacy tool: ownership and funding structures are not abstract legal details - they shape who ultimately controls the infrastructure that millions rely on to communicate freely.