Well yes, but I think who he's trying to fool is Wizards of the Coast, the IRS, and his very small support base. All of which are likely to bite him in the ass.
He's listed himself and his companies as the major creditors in the bankruptcy, but hasn't listed everyone who bought Dungeon Crawl or Cult of Abaddon. So while he's doing a little of book juggling to try to make debts go away, he's probably also trying to do a little tax fraud. He's also probably concluded or just been told outright by his lawyer he's going to lose the original lawsuit, and so thinks this way lets him back out and not have to pay Wizard of the Coast's costs.
By declaring debts owed by a bankrupt company with zero dollars in assets, to himself and his main business, he's creating an opportunity to file them as bad debt write offs on his tax returns and thus deduct them from his revenue - thus massively lower his tax exposure.
This is honestly not that uncommon a scam, and people of varying degrees from small business owners to Donald Trump can often cruise by if they don't get pinged or get triaged out of the files for the IRS to investigate that year.
But, it's going to be substantially harder to do when you have dozens of nerds looking to facilitate your downfall, and also are trapped in a lawsuit with a mega-corporation who would be more than happy for the government to do the heavy lifting for them, particularly in a way that impeaches their adversary and makes them look like "objective good guys".
It's also important to note that Justin is
compounding his risk at every step here.
If he just stops at the bankruptcy fraud, and the trustee concludes everyone who has purchased but not received products is a creditor, and the FBI choose to prosecute - then he's only on the hook for like six months of jail time (
Offence Level 8)
If he goes ahead and claims that bad debt, and the IRS decide to prosecute, he's looking at probably two years (Offence Level 16)
If Wizards of the Coast are awarded costs for their suit with TSR LLC, and those costs are greater than $250,000 (quite possible because their lawyers are not cheap and they've already done a lot of discovery, etc) then he could be on the hook for two and a half years (Offence Level 18).
All this is assuming no mitigating factors either way, with the maximum sentence being five years if Justin really, really pisses off the court. There are also fines and there can be other charges involved as well.
But seriously at this point he's risking two years in a federal big boy prison just so he can try to cost Wizards of the Coast a bunch of money, while also not having to give up any of his inventory or intellectual property... that nobody was buying... and also trying to turn it into a tax dodge. This is like a combination of The Most Dangerous Game and Play Stupid Games, Win Stupid Prizes.
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