Chancellor Kathaleen St. Jude McCormick, sitting by designation on the Delaware Superior Court, recently issued an opinion that should serve as a reminder of the harsh consequences that a party may suffer if it fails to properly preserve evidence in the lead-up to litigation. In BDO USA v. Everglade Global, C.A. No. N22C-12-063 KSM, 2023 WL 1371097 (Del. Super. Ct. Jan. 31, 2023), Chancellor McCormick held that in light of the defendant’s egregious spoliation of evidence, the only fair and just outcome was a default judgment and fee shifting order in favor of the plaintiff.

The spoliation was mainly carried out by the defendant’s founder and CEO, Eric Jia-Sobota. Jia-Sobota is a former BDO partner who founded a rival consulting firm—the defendant—in spring 2020, while he was still at BDO. Acrimonious litigation commenced almost immediately, with BDO initiating arbitration proceedings and filing a related action for injunctive relief against the defendant and Jia-Sobota in the Superior Court of the District of Columbia.