Print
More News

CloudWyze Bankruptcy Filing Follows Wage Dispute

By Cece Nunn, posted Aug 30, 2017
Leland-based CloudWyze Inc. filed for bankruptcy this month after a June court case over an employee’s wages resulted in a judgment of nearly $500,000 against the company, according to court documents.
 
CloudWyze Inc. is a separate legal entity from the company that offers internet and other technology services to clients in the Wilmington area, said Cloudwyze President Shaun Olsen and CloudWyze Inc.’s attorney, David Ennis. That company is Olsen Enterprises, doing business as CloudWyze, Olsen and Ennis said.
 
In the Chapter 11 reorganization filing signed by Olsen on Aug. 7, CloudWyze Inc. of Suite 203, 503 Waterford Way in Leland, is listed as having no assets and one creditor, Phillip Everhart, a former CloudWyze employee. The defendant in a lawsuit filed by CloudWyze Inc., Everhart was awarded about $484,000 in New Hanover County Superior Court after a trial that ended June 12.
 
Everhart was hired in 2013 to manage sales and product marketing for CloudWyze with a base salary of $72,000, according to an offer letter dated Aug. 6, 2013, in court documents. His annual compensation, including commissions, was $97,420, Olsen said.

Everhart resigned in April 2015 and filed a complaint with the N.C. Department of Labor, claiming he was owed unpaid wages. But before the state complaint was resolved, CloudWyze Inc. filed a lawsuit against Everhart in September 2015.

The CloudWyze Inc. complaint against Everhart said that a company audit had shown that Everhart had been overpaid by more than $20,000. The court ended up dismissing Cloudwyze’s complaint, but as the defendant in the CloudWyze lawsuit, Everhart had countersued, saying among other counterclaims that the company owed him $90,000.

At the end of the trial in June, the jury’s verdict awarded Everhart more than $268,000, which in addition to the nearly $90,000 in wages, commissions and vacation pay Everhart sought, also included nearly $80,000 "for breach of contract" and $100,000 in punitive damages, the judgment says. Superior Court Judge Imelda J. Pate also later ordered CloudWyze to pay court costs and attorney’s fees and expenses, for a total judgment of about $484,000, according to court documents.
 
That is the same and only amount in Cloudwyze Inc.’s bankruptcy filing, which lists Everhart’s disputed employment wages as its sole debt.
 
CloudWyze appealed the Superior Court judgment in July – an appeal that is still in place, CloudWyze’s attorney said. At the same time, the bankruptcy is moving forward, Ennis said.

CloudWyze’s appeal argues that during pretrial proceedings, Pate had ruled that CloudWyze Inc. was precluded from offering any evidence, witness testimony or arguments to the jury about the defendant’s job performance.

Everhart’s attorney, Grady Richardson, said in an interview this week that not only did Everhart dispute CloudWyze’s claims, all of those claims were successfully defeated in the June court case.

“It’s clear to me the bankruptcy petition was done solely to avoid having to pay Mr. Everhart yet again the money to which he’s entitled,” Richardson said.

Richardson said George Oliver of New Bern is Everhart’s bankruptcy counsel and that he and Oliver are working together to get a full recovery for Everhart.

Despite the ongoing dispute and bankruptcy filing in the U.S. Bankruptcy Court for the Eastern District of North Carolina, the CloudWyze that provides internet and other technology services to local businesses and organizations remains in operation, Olsen said.

“At the end of the day, from a client standpoint, nothing changes,” he said. “They still get serviced. Our employees are getting paid, our vendors are still getting paid and we’re still receiving payments from our customers. And none of that’s changed, and it won’t change – no matter which direction this goes.”
Ico insights

INSIGHTS

SPONSORS' CONTENT
Jim ellis headshot 10311631058

Facebook Ads: What’s Changing

Jim Ellis - Signal
Sabrinaheadshot300x300

What are We Selling?

Sabrina Davis - Port City Signs & Graphics
Webilm julieformal kellystarbuckcom mg 5471

Nonstop Flights Drive Real Estate Investment While Keeping Family and Friends Connected

Julie Wilsey - Wilmington International Airport

Trending News

Chops Deli Co-owner Explains Financial Woes Behind Fundraising Campaign

Jessica Maurer - Jun 18, 2018

Hendrick Automotive To Operate Stevenson Honda Of Wilmington

Johanna Cano - Jun 19, 2018

At ILM, Regional Carrier's Technical Issues Cancel Flights

Christina Haley O'Neal - Jun 18, 2018

Plan A Advertising Adds Recent UNCW Grad

Christina Haley O'Neal - Jun 19, 2018

During Port Of Wilmington Visit, Cooper Says Port Jobs, Growth Good For NC Economy

Christina Haley O'Neal - Jun 19, 2018

In The Current Issue

Using The State's Brownfields Program As A Catalyst For Development

The N.C. Brownfields Program has helped facilitate millions of dollars in investments in underused downtown Wilmington property and many oth...


Berry Farms Weather The Ups And Downs

The weather might have made the 2018 growing season challenging for local berry farmers thus far, but it has not slowed demand for straight-...


Millennials And Money

The age demographic that now represents the largest percentage of the workforce doesn’t feel confident about its saving and investing habits...

Book On Business

The 2018 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2018 Power Breakfast - Dishing on the Restaurant Biz
2018 WilmingtonBiz Expo - Keynote Lunch with Eric Dinenberg, Rouse Properties
2017 Health Care Heroes