I don't think he is stupid at all. I think he is a cunning and experienced grifter who knows exactly what he is doing.He is stupid enough to believe that, but he has the AG's of three states plus big brother currently interested in him. They will get scooped up at some point, It will be fun to watch his brain break when his previous partner in crime turns on him to protect herself. Bankruptcy doesn't protect you when filed to try and escape defrauding thousands of people.
He has stolen small amounts of money from many people, the sort of sums that people are almost certainly going to write off than go to court over.
I have seen far more egregious cases than this get passed over because the bandwidth of the prosecuting authority is taxed to the limit. This has being going on in one form or another for almost 10 years and still there is no direct AG involvement.
The wheels of justice grind very slowly and cases like this can quickly be abandoned.
Bankruptcy does protect you from creditors, that's what it is designed to do. Certainly in this case it would be complex but you are talking years.........many years to unravel this mess and creditors would have to undertake to hold the financial liability if the costs exceed the collected assets. If I was a creditor for a $150 knife I would not do it.
If the company is structured correctly they could, in theory, walk away with no liability. Especially when they can put forward a credible case that the company relied on specialist vendors and suppliers and they let the company down. A case they have been developing in the past few weeks.