The Court of Chancery recently issued its latest decision in the contentious case captioned In re Shawe & Elting LLC. This decision addresses Elizabeth Elting’s motion seeking the imposition of sanctions against Philip Shawe. After conducting a hearing on the request, the Court found,
clear evidence adduced at the sanctions hearing establishes that Shawe acted in bad faith and vexatiously during the course of the litigation in three respects: (1) by intentionally seeking to destroy information on his laptop computer after the Court had entered an order requiring him to provide the laptop for forensic discovery; (2) by, at a minimum, recklessly failing to take reasonable measures to safeguard evidence on his phone, which he regularly used to exchange text messages with employees and which was another important source of discovery; and (3) by repeatedly lying under oath—in interrogatory responses, at deposition, at trial, and in a post-trial affidavit—to cover up aspects of his secret deletion of information from his laptop computer and extraction of information from the hard drive of Elting’s computer.
The Court stated that Mr. Shawe’s conduct “impeded the administration of justice” and “needlessly complicated and protracted these proceedings to Elting’s prejudice, all while wasting scarce resources of the Court.” As a result, the motion was granted and the following sanctions imposed:
Shawe will be ordered to pay Elting the following amount: (1) 33% of her attorneys’ fees and expenses incurred in connection with the litigation of the Merits Trial (including computer expert expenses but not including other experts) from December 2, 2015 up to the resolution of the Merits Trial, i.e., the date on which the Merits Opinion was issued, plus (2) 100% of her attorneys’ fees and expenses (including computer expert expenses) incurred in connection with the litigation of the Sanctions Hearing.
The decision may be read in its entirety here.