IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE AVANDE, INC., a Delaware corporation ) ) Plaintiff, ) ) v. ) C.A. No. 2018-0203-AGB ) SHAWN EVANS and DC RISK ) SOLUTIONS, INC., ) ) Defendants. ) MEMORANDUM OPINION Date Submitted: May 21, 2019 Date Decided: August 13, 2019 Thad J. Bracegirdle and Julie M. O’Dell, WILKS, LUKOFF & BRACEGIRDLE, LLC, Wilmington, Delaware; Jerome R. Bowen, BOWEN LAW OFFICES, Las Vegas, Nevada; Attorneys for Plaintiff Avande, Inc.. Sean J. Bellew, BELLEW, LLC, Wilmington, Delaware; Attorney for Defendants Shawn Evans and DC Risk Solutions, Inc. BOUCHARD, C. This post-trial decision resolves various claims that Avande, Inc., a privately held medical claims management company, brought against its former CEO and director Shawn Evans and a company he owns, DC Risk Solutions, Inc. Avande contends that Evans breached his duty of loyalty by engaging in self-interested transactions, authorizing improper expenditures of company funds, and failing to maintain appropriate documentation of company expenditures. For this, Avande seeks over $5.3 million of damages, which equals approximately 45% of all the expenses Avande incurred to operate its business from its inception in 2013 until Evans was terminated as CEO in February 2018. As explained below, the court concludes that Avande is entitled to damages, but only in the amount of $21,817.70, and to an accounting of payments that Avande made to DC Risk Solutions, Inc., which it quantifies to be $235,845.83 Defendants are entitled to judgment in their favor on all other claims. I. BACKGROUND The facts recited in this opinion are my findings following a three-day trial held in February 2019. The record includes live testimony from five witnesses, approximately 450 exhibits, stipulations of fact in the Pre-Trial Stipulation and Order (“PTO”), and twelve depositions.1 1 Two of the trial witnesses have the same last name: defendant Shawn Evans and an outside accountant Avande hired named Rick Evans. This decision refers to Shawn Evans as “Evans” and to Rick Evans by his full name. 1 A. The Players Avande, Inc is a privately held Delaware corporation that was formed on February 23, 2016, before which time its business was pursued through Avande, LLC, a Delaware limited liability company that was formed in April 2013. 2 For simplicity, unless otherwise noted, the court refers to both entities together as “Avande” or the “Company.” Avande’s principal place of business is in North Augusta, South Carolina.3 Defendant Shawn Evans is a resident of San Francisco, California who served as a director and the Chief Executive Officer of Avande, Inc. from February 23, 2016 until February 15, 2018.4 Evans previously served as the Managing Member and Chief Executive Officer of Avande, LLC.5 Evans is the owner of defendant DC Risk Solutions, Inc. (“DC Risk”), an insurance brokerage and consulting firm based in San Francisco, California, where it is incorporated.6 Two other individuals prominent in this action are Dr. Norman Kato and Mehmet Ergun, who both served as managers of Avande LLC and then as directors 2 PTO ¶¶ ...
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