I wouldn't question the honesty or competence of the judges at all.
What does concern me is that it's fair to say that "reasonable" business expenses vary with the business. We can look at Phil and we know he can't possibly be spending $5k / month on his streams. But a judge who has a life might not realize that, and I'm not sure who he'd go to to talk about it. Let's hope there's at least one person involved who can raise a red flag there.
Business expenses have a very clear definition and a precise context under which they must be used. This is a bankruptcy filing, not a tax filing where you can befuddle and obstruct visibility into your happenings clearly enough where you can make it seem that revenue distribution between partners can be considered a business expense since this money could be reinvested in the business.
If you derive money from your business to pay your mortgage, that's a
personal expense. If you derive money from your business to pay for your groceries, that's a
personal expense.
Usually, you have a bank account solely dedicated to your business and I'm not sure if Phil's PayPal has been qualified a PayPal Business Account. If he hasn't, then there is a complete merging of his business expenses and personal expenses that would absolutely require more scrutiny because you don't know if he's acting in good faith or no when it comes to the money he generates.
Plus, what exactly is content creation? In Phil's case, you capture videogame footage while videotaping yourself live and providing some type of commentary as you're capturing such footage. Anything not directly spent to improve such an experience is not a business expense, it becomes a personal expense.
If I was the judge presiding this filing, I would be extremely skeptical of such incurred expenses without understanding the nature of what you're doing first. And given the fact that "content creator" is a nebulous, undefined term, it will bring unwanted scrutiny from a third-party that has no idea what it is and how business expenses are applied onto such a profession.
Remember that the law has traditionally defined boundaries, and regardless or not if a job does not fit a standard, they will make it fit that standard so there are a set of rules on which they can apply it to.
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EDIT: I'm going to powerlevel here a bit and explain something personal in regards to business expense.
I own a few businesses and every quarter, my partners and I perform a revenue share -- a distribution of profits on a quarterly basis.
That money sits in our business bank account and is then transferred (via wire or check, mostly check) into my personal account once we figure out what amounts the revenue share can be performed upon.
The
moment that money is transferred into my account, it's exempt from any sort of business expense. Example: if I use part of that money to pay my rent, that's a personal expense and I can't go back and claim that as a business expense.
But that's exactly what he's doing: he's claiming that any money he has generated from Burnell Productions and then spent in any capacity is a business expense related to making his business work. Of course I could make the wonky, idiotic, almost insulting argument that without a fixed domicile I couldn't manage my businesses, but under the law, this won't fly. The moment an expense is incurred for personal reasons unrelated to making your business work, it cannot be counted as a business expense.
