XCHANGE TECH. RENTALS LLC v. UK ATLANTA HOLDINGS, LLC, 2026 NCBC 36

STATE OF NORTH CAROLINA
WAKE COUNTY
IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
24CV012890-910
XCHANGE TECHNOLOGY
RENTALS LLC and JEFF
MCFARLANE,
Plaintiffs,
v.
UK ATLANTA HOLDINGS, LLC and
LARES HOLDINGS, LLC,
Defendants.
ORDER AND OPINION ON CROSS
MOTIONS FOR SUMMARY
JUDGMENT
[PUBLIC]1
THIS MATTER is before the Court on Plaintiffs Xchange Technology Rentals
LLC (“Xchange”) and Jeff McFarlane’s Motion for Summary Judgment (ECF No. 63)
and Defendants UK Atlanta Holdings, LLC (“UK Atlanta”) and Lares Holdings,
LLC’s (“Lares”) Motion for Summary Judgment (ECF No. 58) (together, “Motions for
Summary Judgment” or the “Motions”).
The Court, having considered the Motions; the briefs, affidavits, depositions,
exhibits, and other submissions of the parties; the arguments of counsel; the
applicable law; and all appropriate matters of record, concludes that Plaintiffs’
Motion for Summary Judgment should be DENIED and Defendants’ Motion for
Summary Judgment should be GRANTED in part and DENIED in part for the
reasons set forth below.
1 The Court elected to file this Opinion under seal on 10 April 2026 and permitted the parties
an opportunity to propose redactions to the public version of this document. Since that time,
the parties have agreed that no portions of this Opinion are required to be placed under seal.
Accordingly, the Court now files the fully unredacted Opinion publicly.
Xchange Tech. Rentals LLC v. UK Atlanta Holdings, LLC, 2026 NCBC 36.

James deNobriga Long PLLC, by Charles Bridgmon and Jeffrey Long,
for Plaintiffs Xchange Technology Rentals LLC and Jeff McFarlane.
Brooks, Pierce, McLendon, Humphrey & Leonard LLP, by James Whalen
and Eric David, for Defendants UK Atlanta Holdings, LLC and Lares
Holdings, LLC.
Davis, Judge.
INTRODUCTION
1. 	This case involves a dispute between a group of companies and their
former chief executive officer regarding his entitlement to certain monetary benefits
following his termination. 	In the present Motions, each side argues that the Court
should rule in their favor as a matter of law. 	The Court concludes, however, that a
factual dispute exists as to all of the key issues in this case that will require resolution
by a jury.
FACTUAL AND PROCEDURAL BACKGROUND
2. 	“The Court does not make findings of fact on motions for summary
judgment; 	rather, 	the 	Court 	summarizes 	material 	facts 	it 	considers 	to 	be
uncontested.” 	McGuire v. LORD Corp., 2021 NCBC LEXIS 4, at *1–2 (N.C. Super.
Ct. Jan. 19, 2021) (cleaned up).
3. 	Plaintiff 	Jeff 	McFarlane 	is 	a 	resident 	of 	Durham 	County, 	North
Carolina. 	(Complaint, 	ECF 	No. 	3 	[sealed], 	ECF 	Nos. 	11, 	20 	[public], 	¶ 	2;
Counterclaims, ECF No. 13 [sealed], ECF Nos. 22, 27 [public], ¶ 2.)
4. 	Plaintiff 	Xchange 	Technology 	Rentals 	LLC 	is 	a 	Delaware 	limited
liability company that maintains its principal place of business in Durham, North
Carolina. 	(Compl. ¶ 1; Countercls. ¶ 1.) 	Xchange is engaged in various lines of

business, including technology consulting. (Jeffrey McFarlane Deposition Transcript,
ECF Nos. 60.1 [sealed], 65.1 [sealed], ECF Nos. 88.1 [public], 89.1 [public], at 15–16.)
5. 	McFarlane is also the sole owner of Xchange. (Countercls. ¶ 1; Reply to
Counterclaims, ECF No. 28 [sealed], ECF No. 30 [public], ¶ 1.)
6. 	At various times McFarlane chose to enter into business contracts using
Xchange as the contracting entity on his behalf. 	(McFarlane Dep. Tr., at 24–25.)
Because he did so in one of the contracts that is central to this lawsuit, both Xchange
and McFarlane are co-Plaintiffs in this action.2
7. 	Defendant UK Atlanta Holdings, LLC is a North Carolina limited
liability company that maintains its principal place of business in Raleigh, North
Carolina. (Compl. ¶ 3; Countercls. ¶ 3.)
8. 	Defendant Lares Holdings, LLC is a North Carolina limited liability
company whose principal place of business is in Denver, Colorado. 	(Compl. ¶ 5;
Countercls. ¶ 4.)
9. 	UK Atlanta is primarily a holding company for various other entities
throughout 	the 	United 	States 	and 	Europe—which 	are 	collectively 	known 	as
“Damovo” or the “Damovo Group”—and is currently the ultimate parent entity of
2 For ease of reference, the Court will largely refer to Plaintiffs collectively as “McFarlane”
throughout this Opinion.

Lares.3 (Ex. 71, ECF No. 65.11 [sealed], ECF No. 89.1 [public]; see also Countercls.
¶¶ 3–4; Reply to Countercls. ¶¶ 3–4.)
10. 	As of 2019, UK Atlanta and the other then-existing Damovo Group
entities were wholly owned by Global Growth Holdings, Inc. (“Global Growth”).
(McFarlane Dep. Tr., at 19–20; Christopher Nickerson Deposition Transcript, ECF
Nos. 60.2 [sealed], 65.2 [sealed], ECF Nos. 88.1 [public], 89.1 [public], at 16–17.)
11. 	In July of that year, Global Growth’s sole owner and manager, Greg
Lindberg, met with McFarlane to discuss the possibility of McFarlane serving as a
consultant for the Damovo Group. (McFarlane Dep. Tr., at 20.)
12. 	Following their meeting, in September 2019, Lindberg and McFarlane
negotiated and ultimately executed an initial services agreement whereby McFarlane
would serve as the chief executive officer of the Damovo Group. (McFarlane Dep. Tr.,
at 20–21; Hugh Steven Wilson Deposition Transcript, ECF Nos. 60.3 [sealed], 65.3
[sealed], ECF Nos. 88.1 [public], 89.1 [public], at 9.)
13. 	At the beginning of McFarlane’s tenure, none of the Damovo Group
entities were under the direction of a board of directors that was independent from
Global Growth or Lindberg. 	(Wilson Dep. Tr., at 10; Ian Quigley Deposition
Transcript, ECF Nos. 60.4 [sealed], 65.4 [sealed], ECF Nos. 88.1 [public], 89.1
[public], at 19.)
3 It appears that the reason why none of the other Damovo Group entities are parties to this
case is that UK Atlanta and Lares are the only such entities with whom McFarlane had a
direct contractual relationship.

14. 	One of McFarlane’s initial responsibilities and priorities upon joining
the Damovo Group was to work with Global Growth to oversee a series of mergers,
acquisitions, 	and 	re-structuring 	initiatives—codenamed 	“Project 	Copenhagen.”
(McFarlane Dep. Tr., at 17, 234–35.)
15. 	As part of Project Copenhagen, McFarlane helped to plan and oversee
the integration of Lares—which had been separately acquired and managed by
Global Growth—into the Damovo Group structure. 	(McFarlane Dep. Tr., at 17–18;
Nickerson Dep. Tr., at 17–18.)
16. 	On 8 December 2020, as Lares was being integrated, McFarlane entered
into two separate Incentive Unit Award Agreements—one with Lares and one with
UK Atlanta (together, the “Incentive Unit Agreements”). (Compl. Ex. D; Compl. Ex.
G.) 	The Incentive Unit Agreements incorporated the terms of UK Atlanta’s and
Lares’s respective operating agreements and stated that McFarlane would receive
600 “incentive units” in each of the companies, which were “intended to constitute
profits interests.” (Compl. Ex. D; Compl. Ex. G.)
17. 	Pursuant to the Incentive Unit Agreements, each of the 1,200 total
incentive units would begin as “Restricted Incentive Units,” which would then vest
and 	convert 	into 	“Unrestricted 	Incentive 	Units” 	in 	thirty-six 	equal 	monthly
increments.4 (Compl. Ex. D; Compl. Ex. G.) As is discussed in greater detail below,
4 Although the record is unclear as to exactly when this occurred, at some point prior to 31
December 2022, the Incentive Unit Agreements were amended to accelerate the incentive
units’ vesting schedule, such that all outstanding Restricted Incentive Units would be
converted into Unrestricted Incentive Units “[u]pon the successful refinancing of the Ares

the 	primary 	difference 	between 	Restricted 	Incentive 	Units 	and 	Unrestricted
Incentive Units concerned the circumstances under which the companies could
declare such incentive units to be forfeited pursuant to the terms of their respective
operating agreements. (See Nickerson Dep. Tr. Ex. 56, at 16; Compl. Ex. F, at 16.)
18. 	In March 2020, Lindberg was convicted of various crimes stemming from
conduct unrelated to Global Growth’s management and control of the Damovo Group.
(McFarlane Dep. Tr., at 19; Wilson Dep. Tr., at 8); see also United States v. Lindberg,
File No. 5:19-CR-22 (W.D.N.C.).
19. 	In response to Lindberg’s conviction, an irrevocable trust was formed
under English law, and in June 2021, a trustee—Hugh Wilson—was appointed to
direct the management of the Damovo Group. 	(McFarlane Dep. Tr., at 19; Wilson
Dep. Tr., at 7–9; Quigley Dep. Tr., at 10–11; Walter A. Jones Deposition Transcript,
ECF Nos. 60.5 [sealed], 65.5 [sealed], ECF Nos. 88.1 [public], 89.1 [public], at 27; see
also Ex. 71, at 1.)
20. 	Around the 	same 	time, 	McFarlane’s 	focus 	shifted to 	an initiative
codenamed “Project Chicago,” whereby the Damovo Group began searching for a
potential buyer to acquire the companies or a senior finance partner willing to
refinance the Damovo Group’s outstanding debt. 	(McFarlane Dep. Tr., at 87–88;
Wilson Dep. Tr., at 56; Quigley Dep. Tr., at 15.)
Senior Facilities Agreement (‘SFA’) and the Oakley Deferred Consideration[.]” (Compl. Ex.
E; Compl. Ex. H.)

21. 	During this process, in January 2022, the managing director of the
Damovo Group’s northern region—who was responsible for the companies’ operations
in Belgium, Luxembourg, Sweden, and Finland—announced that he would be
retiring in March of that year. 	(McFarlane Dep. Tr., at 71–73, 138–39; Ex. 8, ECF
No. 60.8.) 	However, rather than hiring a permanent replacement, McFarlane
appointed an interim managing director to oversee the northern region’s operations.
(McFarlane Dep. Tr., at 78, 138–39.)
22. 	After more than a year of working on Project Chicago, the Damovo
Group entered into a Senior Facilities Agreement with Triton Debt Opportunities and
Kartesia Securities (together, “Triton and Kartesia”) in September 2022 to refinance
the Damovo Group’s outstanding debt obligations. 	(Quigley Dep. Tr., at 15–17;
Michael Workman Deposition Transcript, ECF No. 60.6 [sealed], ECF No. 88.1
[public], at 25; Ralf Joedicke Deposition Transcript, ECF Nos. 60.7 [sealed], 65.6
[sealed], ECF Nos. 88.1 [public], 89.1 [public], at 25–26; see also Ex. 59, ECF No. 65.8
[sealed], ECF No. 89.1 [public].)
23. 	Following the conclusion of Project Chicago, Wilson and McFarlane
began discussing a proposal whereby (1) UK Atlanta would terminate its existing
services agreement with McFarlane; and (2) McFarlane would resign as the Damovo
Group’s chief executive officer. 	(Wilson Dep. Tr., at 20–23; McFarlane Dep. Tr., at
211–12; see also Wilson Dep. Tr. Ex. 45.)
24. 	Around that same time, Wilson began the process of assembling an
independent 	unified 	board 	of 	directors 	to 	provide 	additional 	oversight 	and

management 	for 	the 	Damovo 	Group 	(the 	“Board”), 	which 	was 	composed 	of:
McFarlane, 	Christopher 	Nickerson, 	Michael 	Workman, 	and 	Walter 	Jones.
(McFarlane Dep. Tr., at 91–92; Nickerson Dep. Tr., at 36–37; Workman Dep. Tr., at
12–13; Jones Dep. Tr., at 13; Quigley Dep. Tr., at 22; Wilson Dep. Tr., at 11, 55–56.)
25. 	One of the first major initiatives presented to the newly formed Board
in October 2022 was given the codename: “Project Sydney.” 	(Ex. 11, ECF No. 60.10
[sealed], ECF No. 88.1 [public], at 7.) In a nutshell, the goal of Project Sydney was to
effectuate an internal corporate restructuring—for example, by consolidating the
Damovo Group’s four operational regions into one “Global Damovo” model—in order
to streamline the Damovo Group’s business, reduce costs, and increase profitability.
(Jones Dep. Tr., at 68; McFarlane Dep. Tr., at 92, 105, 109–10; see also Ex. 11, at 7.)
26. 	However, by early 2023, Global Growth had fallen behind in making
payments to one of its lenders, Oakley Capital, which had provided the original
financing for Global Growth’s acquisition of the Damovo Group—resulting in Global
Growth being declared to be in default of its lending agreements. 	(McFarlane Dep.
Tr., at 100–01; Nickerson Dep. Tr., at 65–66; Workman Dep. Tr., at 40–41.)
27. 	In response to this default, in February 2023, Triton and Kartesia, in
turn, declared the Damovo Group to be in default under the terms of the Senior
Facilities Agreement. (McFarlane Dep. Tr., at 100–01; Nickerson Dep. Tr., at 64–66;
Workman Dep. Tr., at 40–41; Jones Dep. Tr., at 76.)
28. 	As a result of its default as to the Senior Facilities Agreement, the
Damovo Group incurred financial penalties (including being subject to a higher

interest rate), and Triton and Kartesia began exerting pressure on the Board to make
certain management decisions that would maximize the value of Damovo, including
hiring third-party consultants to evaluate Project Sydney and the effectiveness of
Damovo’s managers. 	(Jones Dep. Tr., at 43–44, 76; McFarlane Dep. Tr., at 18, 35,
152–53; Workman Dep. Tr., at 86–89; Nickerson Dep. Tr., at 38–39; Wilson Dep. Tr.,
at 42.)
29. 	On 	7 	February 	2023, 	Lindberg—through 	Global 	Growth’s 	legal
counsel—sent a letter to Wilson, Nickerson, Workman, and Jones concerning the
Damovo Group’s management. 	(Jones Dep. Tr. Ex. 40; see also Wilson Dep. Tr., at
27; Nickerson Dep. Tr., at 44–45; Workman Dep. Tr., at 28–30; Jones Dep. Tr., at 20–
21.) Lindberg’s letter stated, in relevant part, as follows:
As the shareholder of [Global Growth], it is with deep regret that I must
inform you that the Settlor of Damovo Financial Services Trust and the
[Global 	Growth] 	Board 	are 	considering 	legal 	action 	against 	[ 	]
McFarlane for willful misconduct, gross negligence and fraudulent
inducement. [McFarlane] should be immediately replaced with [sic] as
CEO of Damovo.
(Jones Dep. Tr. Ex. 40, at 1.)
30. 	In response to Lindberg’s letter, on 27 February 2023, Nickerson,
Workman, and Jones wrote to Global Growth’s then-chief executive officer, Justin
Holbrook, as follows:
We refer to the letter dated 7 February 2023 from [ ] Lindberg received
by [ ] Workman, [ ] Jones, [ ] Nickerson and [ ] Wilson in relation to the
Damovo Financial Services Trust (the “Letter”) on 8 February 2023, by
way of email from Anya Goldin, [Global Growth’s] external legal counsel.
. . .

The Letter demands, amongst other things, the removal of [ ] McFarlane
as Group Chief Executive Officer (“CEO”) of the Damovo Group and his
replacement with a [ ] Lindberg / [Global Growth] nominated candidate.
The tone and content of the Letter, and the manner of its delivery, is
extremely concerning to the Damovo Boards. While the Damovo Boards
do not believe that the allegations set out in the Letter warrant a
detailed response, there are certain aspects of the Letter which the
Damovo Boards feel compelled to respond to, as follows:
. . .
2. 	We note the allegations made by [ ] Lindberg in the Letter with
respect to [ ] McFarlane. The Damovo Boards have carried out an
independent review of many of the concerns raised in respect of
[ ] McFarlane, and believe the allegations are unfounded and lack
any credible or evidential basis whatsoever. The Damovo Boards
continue to support [ ] McFarlane in his role as CEO.
(Jones Dep. Tr. Ex. 41, at 1–2 (emphasis omitted); see also Nickerson Dep. Tr., at 48–
49; Workman Dep. Tr., at 33–36; Jones Dep. Tr., at 36.)
31. 	Shortly thereafter, on 12 May 2023, Wilson and McFarlane executed an
Amended 	and 	Restated 	Services 	Agreement 	(“Amended 	Services 	Agreement”)
between UK Atlanta and Xchange. (McFarlane Dep. Tr., at 22–23; Wilson Dep. Tr.,
at 31–32; Quigley Dep. Tr., at 23–24; see also Compl. Ex. A.) In the Amended Services
Agreement, McFarlane (via Xchange) agreed that he would continue to serve as the
chief executive officer for the Damovo Group entities in exchange for, inter alia,
guaranteed “Termination Payments” if the Amended Services Agreement was later
terminated by UK Atlanta. (Compl. Ex. A, at 1.)
32. 	Appended to the Amended Services Agreement was a Non-Disclosure
and Non-Solicitation Agreement (“Non-Disclosure Agreement”), in which McFarlane
agreed that “immediately upon the cessation of [his] employment [he] w[ould] . . .

return . . . all copies in any form whatsoever, any . . . property and Confidential
Information[ ]” belonging to the Damovo Group. (Compl. Ex. A, at 6–9.)
33. 	On 9 August 2023 (later that same year), McFarlane informed the Board
that senior members of the Damovo Group’s office in Poland were under government
investigation for criminal fraud. (Quigley Dep. Tr., at 27; McFarlane Dep. Tr., at 128;
Ex. 16, ECF No. 60.14 [sealed], ECF No. 88.1 [public], at 41.) 	Having already
authorized an independent investigation into the matter, McFarlane reported that
the initial investigation revealed that the managing director, “Paulina,”5 and the
operating director, Marek Matejek, had been detained and questioned by Polish
authorities for allegedly falsifying invoices for more than 200,000 euros as part of a
tax evasion scheme. (McFarlane Dep. Tr., at 121–24; Nickerson Dep. Tr., at 50–52;
Quigley Dep. Tr., at 28–29; Workman Dep. Tr., at 73–74; Ex. 16, at 41; see also Ex.
15, ECF No. 60.13 [sealed], ECF No. 88.1 [public], at 1.)
34. 	Despite these allegations, McFarlane did not immediately terminate
Paulina or Matejek. 	(McFarlane Dep. Tr., at 125–27; Jones Dep. Tr., at 48–50;
Quigley Dep. Tr., at 77–80; Nickerson Dep. Tr., at 54–55.)
35. 	As the investigation into Damovo’s Poland office continued, the Damovo
Group prepared for the impending retirement of Karl-Heinz Sänger, who had been
serving as its legal representative in Germany and as the managing director of its
central region in Europe. (McFarlane Dep. Tr., at 107.)
5 Because her last name does not appear to be contained in the record, the Court will refer to
her in this Opinion simply by her first name.

36. 	As a part of this process, in September 2023, McFarlane terminated the
still-serving interim managing director for the Damovo Group’s northern region and
assumed the role of interim managing director himself. (McFarlane Dep. Tr., at 188.)
37. 	By January 2024, at least two different individuals had been hired to
serve as managing directors for the Damovo Group in Germany—Oliver Gronau and
Thilo Cramer.6 (McFarlane Dep. Tr., at 157–59; Nickerson Dep. Tr., at 104; see also
Ex. 23, ECF No. 60.18.) 	Furthermore, rather than retiring, Sänger continued to be
employed by the Damovo Group as a consultant. (Nickerson Dep. Tr., at 103–04.)
38. 	Shortly 	thereafter, 	on 	8 	April 	2024, 	the 	Damovo 	Group’s 	general
counsel, Ian Quigley, sent a letter to McFarlane advising him that the Board had
decided 	to 	terminate 	his 	employment 	as 	Damovo’s 	chief 	executive 	officer.
(“Termination Letter,” Compl. Ex. B.) The Termination Letter stated in relevant part
as follows:
I write on behalf of the Board of Directors of [UK Atlanta] to give notice
that [Xchange] and you (together, ”you”) have materially breached the
[Amended] Services Agreement and, accordingly, effective as of today,
such [Amended] Services Agreement is terminated, and all of [UK
Atlanta’s] obligations under the [Amended] Services Agreement have
ceased, including, without limitation, any obligation of [UK Atlanta] to
pay any “Termination Payments” (as defined in the [Amended] Services
Agreement).
As a result of this termination, you are no longer providing services to,
or serving as a manager, officer or director of, [UK Atlanta] or any of its
subsidiaries, including Lares Holdings, LLC (“Lares”). In addition, as a
direct result of your breaches of the [Amended] Services Agreement and
the resulting termination of your services with [UK Atlanta] and Lares
6 It appears that in addition to serving as the managing director for Damovo in Germany,
Gronau also took over responsibility for the Damovo Group’s northern region. (McFarlane
Dep. Tr., at 188.)

for Cause (as defined in the Operating Agreements), the Board hereby
gives notice to you that all Incentive Units awarded to you by [UK
Atlanta] and Lares are hereby forfeited without further consideration
under Section 3.8 of the Operating Agreements. . . .
As further detailed below, you have materially failed to fulfill your
obligations set forth in the [Amended] Services Agreement, failed to
work diligently on behalf of [UK Atlanta], and failed to act with the
requisite degree of diligence, care and attention required for the job for
which you were retained.
Under the [Amended] Services Agreement, you agreed to fulfill the
following “Responsibilities”: (1) provide day-to-day leadership to senior
management and all functional areas of [UK Atlanta]; (2) conform
to/execute all reasonable and lawful directions by the board and trustee
of [UK Atlanta]; (3) promote, develop and extend the interests of [UK
Atlanta]; and (4) drive profitable growth for [UK Atlanta] through
development/execution [sic] of a strategic plan.
Below 	are 	examples 	of 	your 	material 	breaches 	in 	fulfilling 	these
Responsibilities. 	These examples are not an exhaustive list, but they
are illustrative of your non-performance.
. . .
In accordance with the May 12, 2023 Non-Disclosure [ ] Agreement,
please return all company property to [ ] Nickerson within one week of
this letter, including any company laptops. All other obligations under
the 	Non-Disclosure 	[ 	] 	Agreement 	survive 	the 	termination 	of 	the
[Amended] Services Agreement.
(Compl. Ex. B, at 1–2, 4 (emphasis omitted).)
39. 	The Termination Letter specifically provided the following examples of
McFarlane’s purported breaches of the Amended Services Agreement:
(a) 	Causing the Damovo Group to decline in topline revenue and EBITDA
(earnings before interest, taxes, depreciation, and amortization) for the
2023 and 2024 fiscal years;
(b) 	Failing to provide the Board with an updated strategic plan;

(c) 	Hiring 	an 	unqualified 	“interim” 	managing 	director 	for 	Damovo’s
northern region without ever hiring a permanent replacement;
(d) 	Failing to successfully integrate one of Damovo’s technology services
entities into the Damovo Group structure;
(e) 	Delaying the implementation of a furlough and cost restructuring plan
for Damovo’s northern region;
(f) 	Spending too much time on personal business ventures unrelated to the
Damovo Group;
(g) 	Missing important deadlines and meetings and/or coming to meetings
disorganized and unprepared;
(h) 	Scoring poorly on internal employee engagement surveys;
(i) 	Failing to execute a strategic management transition in Damovo’s
central region;
(j) 	Engaging in inappropriate and unprofessional behavior at Damovo-
sponsored events; and
(k) 	Submitting 	excessive 	and 	inappropriate 	expense 	reimbursement
requests, including $6,147 per month for an executive assistant to
perform non-Damovo work.
(Compl. Ex. B, at 2–4.)
40. 	McFarlane initiated this lawsuit approximately two weeks later by filing
a Complaint in Wake County Superior Court. (ECF No. 3 [sealed], ECF Nos. 11, 20
[public].) 	In the Complaint, McFarlane has asserted claims for (1) breach of the

Amended Services Agreement against UK Atlanta; (2) unjust enrichment (in the
alternative); (3) breach of UK Atlanta’s Operating Agreement and Incentive Unit
Agreement; 	(4) 	breach 	of 	Lares’s 	Operating 	Agreement 	and 	Incentive 	Unit
Agreement; and (5) declaratory judgment.7
41. 	This 	case 	was 	subsequently 	designated 	as 	a 	mandatory 	complex
business case on 8 May 2024 and assigned to the undersigned on the following day.
(ECF Nos. 1–2.)
42. 	On 24 June 2024, Defendants filed their Answer and Counterclaims, in
which Defendants asserted the following counterclaims: (1) UK Atlanta’s claim for
breach of the Amended Services Agreement; (2) Defendants’ claim for breach of
fiduciary 	duty; 	(3) 	UK 	Atlanta’s 	claim 	for 	fraud; 	(4) 	UK 	Atlanta’s 	claim 	for
constructive fraud; (5) UK Atlanta’s claim for embezzlement under N.C.G.S. § 1-
538.2; and (6) UK Atlanta’s claim for conversion. (ECF No. 13 [sealed], ECF No. 22
[public].) 	Defendants have also requested that the Court grant them declaratory
relief concerning the parties’ rights and obligations under the Amended Services
Agreement and Incentive Unit Agreements.
43. 	Defendants subsequently filed an Amendment to Counterclaims on 6
September 2024, in which UK Atlanta asserted an additional counterclaim for breach
of the Non-Disclosure Agreement. (ECF No. 34.)
7 The declaratory judgment claim seeks a declaration regarding McFarlane’s right to the
incentive units in UK Atlanta and Lares under the terms of the Incentive Unit Agreements.

44. 	Both sides filed their respective Motions for Summary Judgment on 24
October 2025.
45. 	This matter came on for a hearing before the Court on 26 February 2026
at which all parties were represented by counsel.
46. 	The Motions are now ripe for resolution.
LEGAL STANDARD
47. 	It is well established that “[s]ummary judgment is proper ‘if the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of law.’ ” Morrell v. Hardin
Creek, Inc., 371 N.C. 672, 680 (2018) (quoting N.C. R. Civ. P. 56(c)). 	“[A] genuine
issue is one which can be maintained by substantial evidence.” 	Kessing v. Nat’l
Mortg. Corp., 278 N.C. 523, 534 (1971). 	“Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion and
means more than a scintilla or a permissible inference.” 	Daughtridge v. Tanager
Land, LLC, 373 N.C. 182, 187 (2019) (cleaned up).
48. 	On a motion for summary judgment, “[t]he evidence must be considered
‘in a light most favorable to the non-moving party.’ ” McCutchen v. McCutchen, 360
N.C. 280, 286 (2006) (quoting Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470
(2004)). 	“[T]he party moving for summary judgment ultimately has the burden of
establishing the lack of any triable issue of fact.” 	Pembee Mfg. Corp. v. Cape Fear
Constr. Co., 313 N.C. 488, 491 (1985).

49. 	The party moving for summary judgment may satisfy its burden by
proving that “an essential element of the opposing party’s claim does not exist, cannot
be proven at trial, or would be barred by an affirmative defense, . . . or by showing
through discovery that the opposing party cannot produce evidence to support an
essential element of [the] claim[.]” Dobson v. Harris, 352 N.C. 77, 83 (2000). “If the
moving party satisfies its burden of proof, then the burden shifts to the non-moving
party to ‘set forth specific facts showing that there is a genuine issue for trial.’ ” Lowe
v. Bradford, 305 N.C. 366, 369–70 (1982) (quoting N.C. R. Civ. P. 56(e)). 	If the
nonmoving 	party 	does 	not 	satisfy 	its 	burden, 	then 	“summary 	judgment, 	if
appropriate, shall be entered against [the nonmovant].” United Cmty. Bank (Ga.) v.
Wolfe, 369 N.C. 555, 558 (2017) (quoting N.C. R. Civ. P. 56(e)).
50. 	When a party requests offensive summary judgment on its own claims
for relief, “a greater burden must be met.” 	Brooks v. Mt. Airy Rainbow Farms Ctr.,
Inc., 48 N.C. App. 726, 728 (1980). The moving party “must show that there are no
genuine issues of fact, that there are no gaps in his proof, that no inferences
inconsistent with his recovery arise from the evidence, and that there is no standard
that must be applied to the facts by the jury.” 	Parks Chevrolet, Inc. v. Watkins, 74
N.C. App. 719, 721 (1985). For that reason, it is “rarely . . . proper to enter summary
judgment in favor of the party having the burden of proof.” Blackwell v. Massey, 69
N.C. App. 240, 243 (1984).

ANALYSIS
51. 	At the outset, it is necessary to understand the myriad of written
agreements executed by the parties that are at issue in this case.8
52. 	First, the Amended Services Agreement is the primary contractual
relationship between McFarlane and Defendants. The Amended Services Agreement
details (1) McFarlane’s responsibilities as chief executive officer; (2) the compensation
and reimbursements McFarlane would be entitled to receive; and (3) the process by
which McFarlane could be terminated from his position.
53. 	Second, the Incentive Unit Agreements awarded to McFarlane 600
incentive units in each of the Defendant companies. The Incentive Unit Agreements
expressly incorporated the terms of UK Atlanta’s and Lares’s respective operating
agreements with regard to the disposition of the incentive units upon McFarlane’s
termination.
54. 	Third, 	UK 	Atlanta’s 	Fourth 	Amended 	and 	Restated 	Operating
Agreement 	and 	Lares’s 	Third 	Amended 	and 	Restated 	Operating 	Agreement
(collectively, the “Operating Agreements”) are Defendants’ respective operating
agreements, which provide the substantive terms governing McFarlane’s entitlement
to the incentive units.
8 Although the interrelation between these documents for purposes of the present Motions is
at times somewhat confusing, the Court has attempted in this Opinion to explain as clearly
as possible how they relate to each other.

55. 	Fourth, the Non-Disclosure Agreement is appended to the Amended
Services Agreement and governs McFarlane’s post-termination obligation to return
confidential documents, property, and information belonging to the Damovo Group.
56. 	In Plaintiffs’ Motion for Summary Judgment, McFarlane is seeking
summary judgment as to (1) each of his own claims for relief; (2) each of Defendants’
counterclaims; and (3) two of his affirmative defenses in which he asserts that
Defendants’ counterclaims are time-barred (either in whole or in part).
57. 	In Defendants’ Motion for Summary Judgment, Defendants are seeking
summary judgment as to each of McFarlane’s claims for relief as well as their own
counterclaims for: (1) breach of the Amended Services Agreement; (2) breach of the
Non-Disclosure Agreement; (3) conversion; and (4) declaratory relief.
58. 	The primary issues raised by the present Motions concern (1) whether
McFarlane’s 	termination 	automatically 	entitled 	him 	to 	receive 	Termination
Payments under the terms of the Amended Services Agreement; and (2) whether
McFarlane was discharged for “cause” such that he has forfeited his right to retain
the 1,200 total incentive units that had previously been given to him by Defendants
collectively.
59. 	Because the parties’ respective arguments significantly overlap as to
their contract-based claims, the Court finds it helpful to discuss their arguments as
to those claims together.

I. 	Unjust Enrichment
60. 	As a preliminary matter, the Court will address McFarlane’s alternative
claim for unjust enrichment.
61. 	Under North Carolina law, “to recover on a claim of unjust enrichment,
a party must prove that it conferred a benefit on another party, that the other party
consciously accepted the benefit, and that the benefit was not conferred gratuitously
or by an interference in the affairs of the other party.” Se. Shelter Corp. v. BTU, Inc.,
154 N.C. App. 321, 331 (2002) (citing Booe v. Shadrick, 322 N.C. 567, 570 (1988)).
62. 	“However, since an action for unjust enrichment is quasi-contractual in
nature, it may not be brought in the face of an express contract. 	For that reason, if
there is a contract between the parties, the contract governs the claim and the law
will not imply a contract.” 	SciGrip, Inc. v. Osae, 373 N.C. 409, 432 (2020) (cleaned
up); see also Catoe v. Helms Constr. & Concrete Co., 91 N.C. App. 492, 498 (1988)
(holding that a plaintiff cannot sustain a claim for unjust enrichment “when an
express contract has been proved”).
63. 	Here, it is undisputed that enforceable written contracts govern the
legal relationships between the parties in this case. As such, McFarlane cannot seek
recovery under a theory of implied-in-law contract or quasi-contract. 	See Atl. & E.
Carolina Ry. Co. v. Wheatly Oil Co., 163 N.C. App. 748, 753 (2004) (“The doctrine of
unjust enrichment is based on ‘quasi-contract’ or contract ‘implied in law’ and thus
will not apply . . . where a contract exists between two parties.” (cleaned up)).

64. 	At 	the 	26 	February 	hearing, 	McFarlane’s 	counsel 	conceded 	that
dismissal of the unjust enrichment claim was appropriate.
65. 	Accordingly, the Court concludes that Defendants’ Motion for Summary
Judgment should be GRANTED with respect to McFarlane’s claim for unjust
enrichment, and that claim is DISMISSED with prejudice. 	Plaintiffs’ Motion for
Summary Judgment as to this claim is DENIED.
II. 	Amended Services Agreement
66. 	McFarlane and Defendants have each asserted claims accusing the
other of breaching the Amended Services Agreement. 	Defendants have also sought
declaratory relief concerning the parties’ current rights and obligations under the
terms of that Agreement.
67. 	McFarlane contends that he fully performed his obligations pursuant to
the terms of the Amended Services Agreement and that Defendants committed a
material breach by failing to make the agreed-upon Termination Payments as
required thereunder.
68. 	In response, Defendants assert that McFarlane failed to fulfill his
contractual duties as the chief executive officer of the Damovo Group and that, as a
result, 	Defendants 	were 	justified 	in 	refusing 	to 	award 	him 	the 	Termination
Payments.
69. 	“The elements of a claim for breach of contract are (1) [the] existence of
a valid contract and (2) breach of the terms of that contract. The elements of a valid
contract are offer, acceptance, consideration, and mutuality of assent to the contract’s

essential terms.” Davis v. Woods, 286 N.C. App. 547, 561 (2022) (cleaned up). “It is
well established that in order for a breach of contract to be actionable it must be a
material breach, one that substantially defeats the purpose of the agreement or goes
to the very heart of the agreement[ ] or can be characterized as a substantial failure
to perform.” 	Supplee v. Miller-Motte Bus. Coll., Inc., 239 N.C. App. 208, 220 (2015)
(cleaned up).
A. 	McFarlane’s Claim
70. 	The Amended Services Agreement states in relevant part as follows:
Termination Events
The 	Agreement 	may 	be 	terminated 	in 	the 	following 	manner 	and
circumstances:
(a) 	Upon mutual consent;
(b) 	Upon 30 days[’] notice from the Company’ [sic] board of directors
or Atlanta Topco Limited’s board of directors (unless waived by
[McFarlane]); or
(c) 	By [McFarlane] with three (3) months’ notice.
On termination of this Agreement for any reason, [McFarlane] shall
immediately resign, as director, manager or other equivalent position in
relation to the Company or any of its subsidiaries, without any claim for
compensation, 	save 	and 	except 	for 	amounts 	owing 	prior 	to 	the
resignation or owing under the Termination Payments section below.
. . .
Termination Payments
In the event [McFarlane’s] contract is terminated by the Company,
[McFarlane] will be entitled to:
• 	Benefits for the period from the effective date of the termination
for twelve (12) months;

• 	[McFarlane’s] 	full 	compensation, 	including 	all 	Monthly
Compensation, 	prior 	period 	Performance 	Bonuses, 	and
Allowances 	(“Severance 	Payment”) 	for 	the 	period 	from 	the
effective date of the termination for twelve (12) months;
• 	Performance Bonuses for the next 4 quarters post-Termination
will be paid within 30 days from the end of each quarter on the
same schedule as if [McFarlane] w[as] not terminated; and
• 	Pursuant 	to 	the 	Company’s 	Operating 	Agreement 	and 	its
definition 	of 	“Fair 	Market 	Value”, 	the 	total 	sum 	owing 	to
[McFarlane] (the “LTIP Payment”) will be paid by the Company
in twelve (12) quarterly installments beginning ninety (90) days
after the Termination Event and continuing each subsequent
quarter until paid in full. 	To the extent such payments are not
paid, all payments shall remain due and owing to [McFarlane]
and shall accrue annual interest at 10% until such time as they
are satisfied in full. If the Company Group is more than 90 days
in arrears on any of the Payments to [McFarlane], the Interest
Rate 	will 	increase 	to 	15% 	per 	annum 	for 	all 	Payments 	to
[McFarlane]. For the avoidance of doubt, failure to pay any LTIP
Payment 	due 	to 	restrictions 	imposed 	by 	any 	covenants 	or
conditions contained in the relevant loan documentation by the
lenders of the Damovo Group shall not constitute a breach of this
Agreement or event of default[.]
(Compl. Ex. A, at 2 (emphasis added in part and omitted in part).)9
71. 	McFarlane’s argument on this issue is straightforward. He contends—
based on the first sentence of the “Termination Payments” section (as italicized
above)—that the only prerequisite to his receipt of the Termination Payments was
that his employment be terminated by Damovo (which it clearly was). 	McFarlane
asserts that this sentence does not place any other qualifications on his right to
9 Although the primary focus of McFarlane’s claim for breach of the Amended Services
Agreement is Defendants’ refusal to pay him the Termination Payments upon his discharge,
he also contends that he was not given the requisite thirty-day notice period prior to his
termination as required under subpart (b) of the above-quoted “Termination Events” section
of the Agreement.

receive the payments—regardless of the reasons for his termination. 	McFarlane
argues that the parties could have included contractual language conditioning his
right to receive the Termination Payments on one or more conditions (such as, for
example, upon the termination being without cause), but that the parties did not do
so.
72. 	However, McFarlane’s argument fails to take into account the fact that
Defendants have pled the affirmative defense of prior material breach in which they
allege that McFarlane’s prior breaches of the Amended Services Agreement have
excused their performance obligations. 	As a result, Defendants contend, they were
not required to comply with the “Termination Payments” provision.10
73. 	“It is well settled that where one party breaches a contract, the other
party is relieved from the obligation to perform.” Ball v. Maynard, 184 N.C. App. 99,
108 (2007) (cleaned up). However, “[a] breach discharges further performance only if
the breach was material.” 	Chesson v. Rives, 2016 NCBC LEXIS 92, at *34 (N.C.
Super. Ct. Nov. 30, 2016) (cleaned up). “Whether a failure to perform a contractual
obligation is so material as to discharge other parties to the contract from further
performance of their obligations thereunder is a question of fact[.]” 	Combined Ins.
Co. v. McDonald, 36 N.C. App. 179, 184 (1978) (cleaned up).
74. 	The assertion of the prior material breach defense “shifts the burden of
proof” 	to 	the 	party 	claiming 	its 	performance 	obligations 	were 	excused. 	CTS
10 For this same reason, Defendants maintain that they were not required to comply with the
thirty-days’ notice provision under the “Termination Events” section of the Amended Services
Agreement.

Metrolina, LLC v. Berastain, 2024 NCBC LEXIS 13, at *15 (N.C. Super. Ct. Jan. 19,
2024) (cleaned up).
75. 	As is discussed at length in the following section of this Opinion, the
Court finds that a genuine issue of material fact exists as to whether McFarlane did,
in fact, commit one or more prior material breaches of the Amended Services
Agreement. 	Accordingly, 	despite 	the 	seemingly 	unambiguous 	directive 	that
McFarlane would be entitled to the Termination Payments upon his termination for
any reason at all, Defendants’ refusal to make those payments would be justified if a
factfinder was to determine that McFarlane did—in fact—commit a prior material
breach of the Amended Services Agreement.
76. 	Therefore, 	the 	parties’ 	Motions 	for 	Summary 	Judgment 	as 	to
McFarlane’s claim for breach of the Amended Services Agreement are each DENIED.
See Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., P.C., 180 N.C. App. 257, 269
(2006) (concluding that a structural engineering firm was not entitled to summary
judgment on its claim that its client “fail[ed] to pay [the firm] the money due for
services performed pursuant to the contract[ ]” because “a genuine issue of material
fact exist[ed] whether [the firm] breached its contract with [the client] by supplying
a defective structural steel design for the project[ ]”); Lake Mary, L.P. v. Johnson, 145
N.C. App. 525, 537 (2001) (affirming the trial court’s denial of a motion for a directed
verdict based on the affirmative defense of a prior material breach because “[w]hether
[plaintiff’s] actions . . . constituted a breach of the agreement, and whether the alleged
breach was material, was an issue of fact that should have been determined by the

jury[ ]” 	(cleaned up)); Crosby v. Bowers, 87 N.C. App. 338, 345 (1987) (“Whether
plaintiff’s actions in the present case constitute a breach of the agreement, and
whether the alleged breach was material, is an issue of fact that should be determined
by the jury on remand if defendants assert antecedent breach as a defense to
plaintiff’s claim.”); Sports Quest, Inc. v. Dale Earnhardt, Inc., 2004 NCBC LEXIS 10,
at *12 (N.C. Super. Ct. Mar. 12, 2024) (“It is clear that Frady stopped paying royalties,
but the reasons therefore and the determination of whether or not there existed a
prior breach by DEI involve credibility issues that the jury must resolve.”).
B. 	Defendants’ Counterclaim
77. 	With respect to UK Atlanta’s counterclaim for breach of the Amended
Services Agreement, Defendants assert that McFarlane failed to comply with each of
the following terms contained in the “Responsibilities” section of the agreement:
Responsibilities:
• 	Carry out the management of the Damovo group of companies in
the capacity of Group CEO;
• 	Provide day to day leadership to the senior management team
and all functional areas of the Company;
• 	Conform to and execute all reasonable and lawful directions given
by the board and trustee of the Company[;]
• 	Promote, develop and extend the interests of the Company; and
• 	Drive 	profitable 	growth 	for 	the 	Company 	through 	the
development and execution of a strategic plan.
(Compl. Ex. A, at 1.)11
11 These purported breaches by McFarlane are also the same grounds for Defendants’
affirmative defense of prior material breach.

78. 	McFarlane, conversely, contends that he properly performed all of his
duties as the Damovo Group’s chief executive officer.
Disobeying Board Directives
79. 	Defendants contend that McFarlane failed to “[c]onform to and execute
all reasonable and lawful directions given by the [B]oard” in two primary ways: (1)
by failing to terminate the two Damovo employees in Poland accused of fraud; and (2)
by making unauthorized ex parte communications with potential capital investment
firms after being instructed not to do so.
80. 	First, Defendants assert that once the Board became aware of the
criminal investigation into the two leaders of Damovo’s Poland office, McFarlane was
given a deadline of January 2024 within which to fire Paulina and Matejek—a
deadline he failed to meet.
81. 	A careful review of the evidence of record, however, reveals that factual
disputes exist as to this issue. 	For example, it is unclear whether McFarlane was
given an explicit directive to terminate Paulina and Matejek “by January 2024” or,
alternatively, whether communications with—and instructions received from—the
Board were more fluid as the investigation into the alleged fraud was ongoing.
(Contrast Quigley Dep. Tr., at 28 (“[T]he arrangement and the agreement for the
board was that those individuals would be removed by January 2024. 	Again, that
deadline was not met.”) and Jones Dep. Tr., at 50 (“[T]he board had directed him to
terminate or remove them from any responsibility immediately, and many months
later, that had not been done.”) with McFarlane Dep. Tr., at 126 (“[W]e deferred to

legal counsel. The issues were brought to the board. The . . . document that we talked
about earlier was our guiding document with respect to next steps. 	The board was
informed at every point.”) and Nickerson Dep. Tr., at 81 (responding “yes” when asked
if it was accurate that the “Board approved a phased approach to remove implicated
management [and to] execute [a] transition[ ]”).).
82. 	Furthermore, the record is not settled as to the scope of the Board’s
purported directive, including whether McFarlane was required to “terminate”
Paulina’s and Matejek’s employment altogether or whether he was simply instructed
to “remove” them from their leadership positions.
83. 	When questioned in their depositions about the details of the Board’s
purported instruction, Jones, Nickerson, and Workman offered conflicting testimony.
Q: 	. . . And I want to make sure I understand. Was the directive to
[ ] McFarlane to terminate or remove [them] from authority?
A: 	I -- I do not recall specifically. I use those terms interchangeably
virtually, and I’m not sure specifically what the board thought at
that time.
Q: 	Okay. 	And if they, indeed, had been removed from any legal
authority while this investigation was ongoing, would that have
been satisfactory to the board?
A: 	If they were completely out of the management, yes, it would have
been satisfactory.
(Jones Dep. Tr., at 50–51.)
Q: 	Were any changes made to the role of either Paulina or [Matejek]
as a result of the allegation?
A: 	I -- I don’t recall. It was an extremely long period of time between
when 	the 	initial 	identification 	happened. 	The 	report 	was
conducted. The outcome of that report was delivered to the board.
The board immediately said to -- to, you know -- at immediate [sic]

to respond by removing both Paulina and [Matejek], and -- and
[McFarlane] failed to do so.
Q: 	And when you say you -- when you say “remove,” do you mean
remove from their role or terminate their employment?
A: 	Terminate.
Q: 	Sorry?
A: 	Terminate their employment.
(Nickerson Dep. Tr., at 54–55.)
Q: 	I want to take you back to the Poland investigation. 	And,
specifically, were the instructions to [ ] McFarlane to terminate
[them] and that’s it, or was he given the option to terminate or
remove [them] from authority?
A: 	I don’t recall.
(Workman Dep. Tr., at 102–03.)
84. 	While it is undisputed that McFarlane never terminated Paulina’s or
Matejek’s employment with Damovo, there is at least some evidence of record from
which a reasonable jury could find that McFarlane instead removed Paulina and
Matejek from their leadership positions by demoting them. (McFarlane Dep. Tr., at
127 (“They had been effectively demoted. . . . [Paulina] effectively had a dual role of
[finance director] and [managing director], and she was demoted to just [finance
director][.]”); see also McFarlane Dep. Tr., at 125–27; Jones Dep. Tr., at 48–50;
Quigley Dep. Tr., at 77–80; Nickerson Dep. Tr., at 54–55, 83.)
85. 	Second, Defendants argue that, after Triton and Kartesia declared the
Damovo Group in default of the Senior Facilities Agreement, McFarlane failed to obey
instructions by the Board to avoid any ex parte discussions with potential sources of
capital investment without another Board member present.

86. 	However, the record is hazy with regard to this issue.
Q: 	Okay. Do you have any specific recollection of a conversation with
[ ] McFarlane about not following the directives from the board?
A: 	Yes.
Q: 	All right. And tell me about that conversation.
A: 	After Damovo Group had fallen into default over amounts owed
to Oakley Capital, we collectively as a board and he as CEO
started seeking other sources of capital that would allow us to
cure the default and continue doing business as we were. During
that time, [McFarlane] raised a number of candidates, as he
described them, for people or entities that might put some money
in to help us cure the default.
As we understood more about those contacts, we realized that
[McFarlane] was conflicted somewhat in seeking new capital
because 	of 	his 	interest 	and claims 	over some 	compensation
arrangements that would be maximized if he were able to recruit
new capital into the company.
At 	that 	time, 	in 	a 	specific 	discussion 	with 	the 	board 	and
[McFarlane], we mentioned that concern about a conflict. 	He
acknowledged that there was a conflict, and the board directed
him not to have any discussions with potential capital sources
without a board member present, period.
Subsequent to that, I’ll call it “formal discussion between the
board and [McFarlane],” he continued to have conversations with
potential sources of capital. 	I then had a one-on-one discussion
with him reminding him of the board’s direction to not engage in
discussions with capital sources without a board member present,
and 	he, 	again, 	said 	he 	would 	follow 	that 	dictate. 	And,
subsequently, there were further discussions. I do remember he
tried to excuse the further discussions saying it wasn’t about
additional capital; it was about some other subject. But it was a
potential capital source that we thought should have been covered
by our directive not to have conversations without an independent
board member present.
(Jones Dep. Tr., at 39–41.)

Q: 	Okay. 	Would the board have been having conversations with
lenders about things like this covenant test, or is that something
that fell to [ ] McFarlane or somebody else?
A: 	Well, the -- the -- [ ] McFarlane was under instructions to not have
independent discussions with the lenders. 	And -- and so I think
if he was following those instructions, then the answer to your
question would be, yes, the board would have been aware, or
somebody on the board. 	However, there are multiple instances
that he had discussions without another member of the board
present.
. . .
Q: 	Okay. Explain -- can you be more specific about -- you know, for
example, what could [ ] McFarlane have done with the lenders
that would have given the board any concern?
A: 	To be more explicit, the -- the agreement was that no one
independently went off and started having discussions with the
lenders by themselves. So in the case of [ ] McFarlane, we asked
that [Jones] would be present on those discussions. . . .
. . .
Q: 	Do you believe after those instructions were given to [ ] McFarlane
that he continued to have independent discussions with lenders?
A: 	Yes.
Q: 	All right. 	Are you aware of any examples or specific instances
where that occurred?
A: 	I’m aware that they did occur. I can’t cite the specific examples.
I just know that they did occur.
Q: 	How do you know they occurred?
A: 	Because at the time, we had discussions, and the board -- not --
not in a board meeting, but in a management -- or an executive
discussion 	between 	myself 	and 	[Jones] 	for 	example, 	of
“[McFarlane] had this discussion; were you there?”
“No.” 	The answer is “no.” 	And so we had verbal conversations
saying he’s not -- he’s not abiding by our direction, which is don’t
have independent meetings with -- with lenders or discussions.

(Workman Dep. Tr., at 77–80.)
87. 	Even putting aside the inability of Workman or Jones to specifically
identify any details as to when, where, or with whom McFarlane allegedly spoke,
ambiguity exists as to whether McFarlane actually received (and subsequently
violated) a formal directive from the Board. 	(Contrast Jones Dep. Tr., at 41
(describing it as a “directive”) and Workman Dep. Tr., at 77 (describing it as an
“instruction”) with Jones Dep. Tr., at 40 (describing it as a “discussion”) and
Workman Dep. Tr., at 78 (describing it as an “agreement”).)
88. 	Obviously, it is the role of the jury at trial—not the Court at the
summary judgment stage—to resolve these questions of credibility and apparent
inconsistencies. See, e.g., Aldrige v. Hasty, 240 N.C. 353, 362 (1954) (recognizing that
the 	jury 	is 	responsible 	for 	“reconcil[ing] 	[any] 	inconsistent, 	conflicting, 	or
contradictory testimony” (cleaned up)).
89. 	Based on the totality of the record before the Court, the Court finds that
there are genuine issues of material fact as to whether McFarlane breached his
contractual duty to “[c]onform to and execute all reasonable and lawful directions
given by the [B]oard.” See Meehan v. Am. Media Int’l, LLC, 214 N.C. App. 245, 256
(2011) 	(noting 	that 	“whether 	Plaintiff 	engaged 	in 	the 	conduct 	alleged 	by 	his
employer[ ] . . . is a question of fact” 	(cleaned up)); see also Blair v. Young Phillips
Corp., 235 F. Supp. 2d 465, 475 (M.D.N.C. 2002) (denying summary judgment where
there was conflicting evidence as to whether the plaintiff was terminated for “willful
violation[s] of specific and lawful directions” and for his “failure or refusal to perform

the 	services 	required 	under 	the 	[a]greement” 	or 	whether 	“he 	excelled 	in 	his
performance of his duties . . . and that neither [of his supervisors] informed him at
any point that they had any problem with his performance” (cleaned up)).
Failure to Drive Growth
90. 	Next, Defendants argue that McFarlane breached his duty to “[d]rive
profitable growth for the [Damovo Group] through the development and execution of
a strategic plan” by (1) failing to develop and execute a strategic plan to reduce
operational costs; and (2) failing to improve the Damovo Group’s year-to-year
financial performance.
91. 	Defendants first assert that McFarlane failed to make material updates
to his presentations to the Board between 2022 and 2024. 	(Compare Ex. 11 with
McFarlane Dep. Tr. Ex. 21 and Ex. 25, ECF No. 60.19 [sealed], ECF No. 88.1 [public];
see also McFarlane Dep. Tr., at 172 (noting that he “d[idn’t] see any [changes] of
substance” that had been made to the Damovo Group’s strategic plan between
January 2023 and February 2024).)
92. 	However, 	given 	the 	extensive 	conflicting 	evidence 	regarding
McFarlane’s role in planning and executing Project Copenhagen, Project Chicago, and
Project Sydney, there is plainly a dispute of material fact as to this issue.
Q: 	Okay. 	Got you. 	So -- well, let me ask it this way: Were there
strategic plans?
A: 	I think that’s debatable. [McFarlane] presented things labeled as
strategic plans, but they were generally a collection of goals and
objectives rather than specific tactics and -- and executable
actions that would lead to a successful strategy. 	So I think
debatable. 	No, I don’t think we were ever presented with a
cohesive strategic plan that was executable.

. . .
Q: 	Did you ask him to make any revisions?
A: 	Yes. 	Again, we were looking forward to the presentation of a
complete and cohesive strategic plan that we never saw in -- in --
I’ll leave it at that.
(Jones Dep. Tr., at 61–62.)
Q: 	And so just focusing on this fifth point, you would agree that this
requires both the development and execution of the strategic
plan, correct?
A: 	Yes.
Q: 	So failure to develop a strategic plan would be a violation of this
-- of one of these responsibilities in your agreement, correct?
A: 	It is a theoretical statement but yes.
Q: 	Why do you say it’s theoretical?
A: 	Because it [sic] was always a strategic plan.
Q: 	Understood. 	Your point is you think you did, in fact, develop a
strategic plan?
A: 	Continuously.
(McFarlane Dep. Tr., at 34.)
93. 	Defendants also contend that McFarlane breached his contractual
duties by failing to improve the Damovo Group’s long-term financial performance. In
support of this contention, Defendants rely primarily on the testimony and evidence
submitted by Ralf Joedicke, the Damovo Group’s chief financial officer, and the report
of Defendants’ putative expert witness, Vir Lakshman. (See generally Joedicke Dep.
Tr.; see also ECF No. 60.37 [sealed], ECF No. 88.1 [public]; Ex. 72, ECF No. 65.12.)

94. 	However, McFarlane has offered countervailing testimony detailing
areas in which the Damovo Group saw financial improvement during his tenure. (See
McFarlane Dep. Tr., at 146–48 (detailing “2.5 million worth of cost improvement[ ]”
between September 2023 and April 2024); at 151 (describing “2- to 300,000 euros in
savings [ ]” in Germany).)
95. 	Moreover, the record suggests that throughout McFarlane’s tenure as
the Damovo Group’s chief executive officer, Damovo faced various financial hurdles
that McFarlane could not have prevented. 	For example, nothing in the record
indicates 	that 	McFarlane 	was 	personally 	responsible 	for 	Triton 	and 	Kartesia
declaring the Damovo Group in default of its Senior Facilities Agreement following
Global Growth’s default to Oakley Capital. See Wilson Dep. Tr., at 43 (testifying that
he did not know of a way McFarlane could have prevented the default); see also
Workman Dep. Tr., at 41 (“[W]e were put in default as a result of Global Growth not
making its payment. 	That’s my understanding.”); Jones Dep. Tr., at 42 (“It’s my
understanding that based on our agreements with our senior secured lender, we were
not able to make that payment. So I’m not sure that anyone literally made a decision
not to pay; but, rather, we made a decision that we were prohibited from paying the
Oakley payment.”).
96. 	Finally, 	the 	record 	contains 	inconsistent 	testimony 	as 	to 	whether
McFarlane’s termination actually improved Damovo’s financial performance.
Q: 	Okay. And following [ ] McFarlane’s termination in about a year
-- a little over a year ago, a year and three months ago, what has
the company done as far as profitable growth? 	Has it fallen?
Grown? Stayed the same?

A: 	Sales growth has improved and profitability has improved.
Q: 	All right. Do you -- do you attribute that to the termination of [ ]
McFarlane?
A: 	No.
(Jones Dep. Tr., at 54.)
Q: 	All right. 	Before I ask you some details about this, to your
knowledge, had any discussions about terminating [ ] McFarlane
started by about February 2024?
A: 	To my recollection, yes.
Q: 	Do you recall when those termination -- excuse me -- when those
conversations began?
A: 	I don’t recall exactly, no.
Q: 	All right. Do you know of any one particular thing that led to the
beginning of those discussions?
A: 	Yes.
Q: 	What was that?
A: 	Poor performance.
Q: 	Poor performance of Damovo?
A: 	Yes.
Q: 	All right. And when you say “poor performance,” are you talking
about financially?
A: 	Yes.
. . .
Q: 	Very, very fair. And I’m not -- to be clear, . . , I am not asking you
for specific numbers. 	I am asking: Your understanding is -- let
me break it down. 	Did the revenue improve from 20 -- from
calendar year ’23 to calendar year ’24?
A: 	My answer is a function of -- there’s too many things in there. 	I
don’t know the answer to that.

Q: 	Okay. 	Do you have any knowledge as a board member whether
the revenue for 2024 was higher than the revenue for 2023?
A: 	Some things improved.
Q: 	All right. 	Total revenue. 	Did the total revenue improve from
2023 to 2024?
A: 	I believe on my -- my recollection is that we started showing
improvement for sure after some of the work that [Nickerson]
began to do, but I don’t recall the exact data point and which
calendar year we’re talking about. I mean, I don’t recall the exact
calendar year summary. 	So if you take a snapshot in time, it
depends on what date you use to say -- to look at the numbers and
compare them. So the answer is, no, I don’t recall.
(Workman Dep. Tr., at 81–82, 85.)
Q: 	Did [ ] McFarlane’s termination improve the balance sheet of UK
Atlanta [ ]?
A: 	It is -- I’m pausing to answer because it’s not an easy question to
answer. The termination, as seen on that sheet that we have just
talked about, it 	improved the 	performance 	of 	the 	company.
However, if we’re talking -- your question was with regards to the
financial position or balance sheet?
Q: 	Correct.
A: 	On 	the 	balance 	sheet, 	I 	would 	say 	that 	situation 	has 	not
improved.
(Joedicke Dep. Tr., at 30.)
97. 	Thus, a factual dispute exists as to this issue as well.
Providing Poor Leadership
98. 	Defendants also assert that McFarlane breached his responsibility to
provide appropriate leadership to the senior management team of the Damovo Group.
99. 	Specifically, 	Defendants 	contend 	that 	McFarlane 	made 	poor
management decisions, including: (1) not finding a permanent replacement for the

retired managing director of Damovo’s northern region; and (2) creating confusion
regarding who would succeed Sänger as the managing director of Damovo’s central
region and legal representative in Germany.
100. 	Here too, however, the parties have offered conflicting testimony and
evidence as to the circumstances surrounding the leadership transitions throughout
Damovo’s northern and central regions, resulting in a dispute of fact.
Q: 	An interim managing director was appointed after [Damovo’s
managing director for the northern region] resigned, correct?
A: 	Correct.
Q: 	And his name was Serge Carlier?
A: 	Correct.
Q: 	How long was [ ] Carlier in the interim [managing director]
position?
A: 	Roughly a year and a half.
Q: 	And then what happened to him?
A: 	We were ready to take the next step in the consolidation of the
two European regions in a singular region and we dismissed them
[sic].
Q: 	Did you ever hire a permanent managing director during that
year and a half period?
A: 	We never intended to.
. . .
Q: 	So as of January of 2024, had you settled on a replacement for
[Sänger] in Germany?
A: 	Yes.
Q: 	Who was that going to be?
A: 	There was not a replacement. There were multiple replacements.

Q: 	And who were they?
A: 	So by this time we were restructuring towards the One Damovo
integrated operating model so [ ] Gronau took over the sales
responsibility from [Sänger]. . . .
. . .
Q: 	And so is it true that as of January 30th of 2024 the decisions
were still being made about who would be [managing director] in
Germany?
A: 	There was no question at this point in time who would be running
the business operationally. There was still some fine-tuning to be
done with respect to the legal representation and the ability to
bind the company as Geschaftsfuhrer.
Q: 	Hadn’t you known about [Sänger’s] retirement for more than a
year now?
. . .
A: 	You 	are 	missing 	the 	distinction 	between 	operational
responsibility which was fully covered off in December when [ ]
Gronau was hired from trying to decide where we go to a multi
[managing director] structure for the purpose of legally binding
the 	company, 	more 	akin 	to 	a 	directorship 	than 	an 	actual
operational leadership.
Q: 	Well, is it fair to say that at the end of January of 2024 there was
confusion 	within 	the 	company 	about 	who 	was 	succeeding
[Sänger]?
. . .
A: 	You are once again missing the point. There was zero confusion
about who was replacing [Sänger] operational [sic] with [ ]
Gronau. There was still some debate as to the optimal structure
for the [managing director] replacement which was the legal
authority for the company.
(McFarlane Dep. Tr., at 78, 160–61.)
Q: 	. . . And what was the massive problem of [Sänger] leaving?

A: 	[Sänger] 	had 	signaled 	his 	retirement 	without 	any 	effective
secession [sic] planning.
Q: 	And that was in Germany?
A: 	Correct.
Q: 	Now, when you -- when you say he had announced his retirement
without secession [sic] planning, do you mean -- for clarification,
was he responsible for the secession [sic]?
A: 	[ ] McFarlane was responsible for the secession [sic].
Q: 	Okay. And, ultimately, how was the secession [sic] accomplished,
if it was?
A: 	Yes. I can’t say with certainty that it was given that [ ] McFarlane
made [Sänger] an advisor gesture, which ended up increasing the
amount of cost that we were paying and failing to find an
adequate successor.
(Nickerson Dep. Tr., at 103–04; see also Ex. 18, ECF No. 60.16; Ex. 19, ECF No. 60.17
[sealed], ECF No. 88.1 [public]; Ex. 23; Ex. 26, ECF No. 60.20; Ex. 29, ECF No. 60.23.)
101. 	Accordingly, summary judgment as to this issue is improper. See Home
Meridian Int’l, Inc. v. Longnecker, 2014 U.S. Dist. LEXIS 74168, at *27 (M.D.N.C.
May 29, 2014) (denying summary judgment because whether defendant breached his
duty to “assert [his] best efforts while conducting business on behalf of [p]laintiff[ ]”
raised “a genuine issue of material fact”).
Improper Expense Reimbursements
102. 	Finally, Defendants assert that McFarlane made unreasonable and
unauthorized expense reimbursement requests designed to benefit himself and his
other businesses at the expense of the Damovo Group.
103. 	First, Defendants contend that McFarlane repeatedly requested and
received reimbursements for a travel club membership called “Inspirato” under the

guise that it would be used for business travel related to Damovo when—in reality—
it was primarily used to finance McFarlane’s personal vacations.
104. 	The record shows that McFarlane first registered for the Inspirato
membership in September 2019 with the expectation that it could be used, at least in
part, for work-related travel. (McFarlane Dep. Tr., at 189–90; Ex. 30, ECF No. 60.24;
see also Ex. 31, ECF No. 25.) 	McFarlane’s Inspirato membership remained active
from September 2019 through the date of his termination, and throughout that time,
McFarlane regularly requested and received reimbursements from the Damovo
Group for the ongoing costs of the membership (approximately $2,500 per month).
(McFarlane Dep. Tr., at 193–94.)
105. 	However, 	following 	the 	onset 	of 	the 	COVID-19 	pandemic 	and 	its
associated effects on global travel, McFarlane primarily (though not exclusively) used
the Inspirato membership to finance his personal travel. 	(McFarlane Dep. Tr., at
193–99; Ex. 33, ECF No. 60.27; Ex. 36, ECF No. 60.29; see also Ex. 32, ECF No. 60.26.)
106. 	In response, McFarlane argues that under the terms of the Amended
Services 	Agreement 	he 	was 	entitled 	to 	seek 	reimbursement 	for 	the 	Inspirato
membership regardless of whether it was used for personal or business travel.
Specifically, McFarlane asserts that the following provisions of the Amended Services
Agreement authorized him to obtain reimbursement for the Inspirato membership:
Expenses
[McFarlane] will be reimbursed no later than monthly in arrears for any
customary and reasonable business expenses incurred and documented.
. . .

Other Allowances:
Travel related credit card fee reimbursement - $1,000 annually[;]
Life Insurance supplement - $2,000 annually[; and]
All 	existing 	professional 	associations, 	subscriptions 	and 	club
memberships.
(Compl. Ex. A, at 1, 10 (emphasis added).)
107. 	The Court finds that there is a genuine dispute of material fact as to
whether the Inspirato membership was, in fact, a “customary and reasonable”
business expense under the terms of the Amended Services Agreement.
108. 	McFarlane also asserts that because the Inspirato membership was an
“existing” subscription or club membership at the time the Amended Services
Agreement was executed, he was entitled to continued reimbursement for the
membership. However, Defendants maintain that McFarlane actively concealed and
omitted critical details concerning his use of the Inspirato membership in order to
personally benefit himself and his family at the expense of the Damovo Group. Once
again, the Court finds that there are genuine issues of material fact concerning this
issue.
Q: 	Is it fair to say at some point in 2023 Damovo, particularly the
board, asked you to justify the expense of the Inspirato travel
membership?
A: 	Never.
. . .
Q: 	And isn’t it true that [Workman] and others within the company
within Damovo had been asking you questions about the expenses
you were submitting?
A: 	He never asked me questions.

(McFarlane Dep. Tr., at 202–03.)
Q: 	All right. 	Had you asked [ ] McFarlane to, kind of, explain his
expenses?
A: 	Had I asked him to?
Q: 	Yes.
A: 	Multiple times, yes.
(Workman Dep. Tr., at 60.)
Q: 	Okay. Do you recall [ ] McFarlane’s expenses including something
for an Inspirato membership?
A: 	I do, yes.
Q: 	Did you approve those expenses?
A: 	I regularly pushed back on those expenses as they were personal
and not company use.
(Nickerson Dep. Tr., at 88.)
Q: 	[Plaintiffs’ counsel] asked you whether [ ] McFarlane disclosed
the expenses related to Inspirato. 	Do you know whether [ ]
McFarlane 	disclosed 	what 	he 	was 	using 	the 	Inspirato
membership for and whether that was personal or work-related
travel?
A: 	I don’t remember him disclosing anything about that.
(Jones Dep. Tr., at 85–86; see also Ex. 35, ECF No. 60.28; Ex. 55, ECF No. 60.33
[sealed], ECF No. 88.1 [public].)
109. 	Second, Defendants contend that McFarlane improperly requested and
received reimbursement for the “full loaded cost” of his executive assistant (who was

an Xchange employee rather than a Damovo employee)12 while actually using her to
further McFarlane’s personal businesses—separate and apart from the Damovo
Group.
110. 	The 	evidence 	of 	record 	indicates 	that 	beginning 	in 	May 	2023,
McFarlane: (1) employed an executive assistant through Xchange; (2) charged
Defendants the full cost of her salary and retirement benefits; and (3) assigned her
to work on matters both related to Damovo and related to McFarlane’s other
businesses. (McFarlane Dep. Tr., at 209–12; see also Ex. 38, ECF No. 60.31; Ex. 39,
ECF No. 60.32.)
111. 	McFarlane asserts that in doing so he acted in conformity with the terms
of the Amended Services Agreement because the utilization of an executive assistant
was a “customary and reasonable” business expense. 	(McFarlane Dep. Tr., at 229.)
Furthermore, McFarlane argues that by having his executive assistant work on
matters related to his other business ventures, McFarlane was able to devote more of
his time and attention to his work for Damovo. (McFarlane Dep. Tr., at 211.)
112. 	The Court concludes that a factual dispute therefore exists as to whether
his efforts to obtain reimbursement for the costs associated with his executive
assistant constitute a breach of the Amended Services Agreement.
113. 	Accordingly, the parties’ respective Motions for Summary Judgment are
each DENIED as to (1) McFarlane’s claim for breach of the Amended Services
12 Defendants were aware that the executive assistant was technically an employee of
Xchange (rather than Damovo) and are not challenging McFarlane’s reimbursement requests
relating to those expenses on this ground.

Agreement; (2) UK Atlanta’s counterclaim for breach of the Amended Services
Agreement; and (3) UK Atlanta’s claim for declaratory relief regarding the parties’
rights and obligations under the Amended Services Agreement.
III. 	Operating Agreements and Incentive Unit Agreements
114. 	In addition to the parties’ claims for breach of the Amended Services
Agreement, 	they 	have 	also 	asserted 	claims 	relating 	to 	Defendants’ 	Operating
Agreements13 and Incentive Unit Agreements. In support of these claims, the parties
take differing views as to the effect of McFarlane’s termination on his right to retain
the 600 incentive units that were previously given to him by each of the Defendants.
115. 	McFarlane has asserted claims against both UK Atlanta and Lares for
breach of their respective Operating Agreements and Incentive Unit Agreements
based on their attempt to strip him of those incentive units following his termination.
McFarlane also seeks a declaratory judgment stating that he remains the owner of
the combined 1,200 incentive units.
116. 	Defendants, 	in 	turn, 	seek 	a 	declaratory 	judgment 	providing 	that
McFarlane forfeited his right to the incentive units given that he was terminatrd for
“cause.”
117. 	Essentially, the Incentive Unit Agreements were designed to encourage
and reward executive longevity within the Damovo Group. 	(Compl. Ex. D; Compl.
13 Although McFarlane has asserted that UK Atlanta and Lares each breached their
respective Operating Agreements, the parties agree that the relevant portions of each of the
Operating Agreements are substantively identical. Therefore, the Court will analyze them
together.

Ex. G; see also Nickerson Dep. Tr., at 32.) Each Defendant awarded McFarlane 600
incentive units on 8 December 2020. (Compl. Ex. D; Compl. Ex. G.)
118. 	Although the incentive units were awarded pursuant to the Incentive
Unit Agreements, the substantive terms governing McFarlane’s rights to those
incentive units were contained in Defendants’ respective Operating Agreements.
(Nickerson Dep. Tr. Ex. 56; Compl. Ex. F; see also Quigley Dep. Tr., at 45.)
119. 	Defendants contend that McFarlane was terminated for “cause” (as that
term is defined in the Operating Agreements) and that based on the express terms
contained therein, his for “cause” termination automatically forfeited his right to the
incentive units.
120. 	In response, McFarlane asserts that no grounds for a “for cause”
termination existed—as that term is defined in the Operating Agreements.
121. 	Defendants’ Operating Agreements state in relevant part as follows:
As used in this Agreement, the following terms have the following
meanings:
. . .
“Cause,” with respect to any Member or Manager means such Member
or Manager has:
(a) 	been convicted of or pled guilty or nolo contendere to a felony;
(b) 	participated in a fraud or act of dishonesty against the Company;
(c) 	materially breached any agreement between such Member or
Manager and the Company or any written policy of the Company,
and not cured such breach within 15 days of the Company’s
written notice of such breach; or
(d) 	engaged in willful misconduct or refused to comply with any
lawful directive of the Company that is consistent with such

Member or Manager’s position and role, and not cured such
noncompliance within 15 days of the Company’s written notice of
such noncompliance.
. . .
3.7 	Issuance of Incentive Units.
3.7.1 	Subject 	to 	Section 	3.7.2, 	Incentive 	Units 	may 	be 	issued 	to
Managers, officers, employees, consultants or other service providers of
the 	Company 	or 	any 	Company 	subsidiary 	(collectively, 	“Service
Providers”). . . .
. . .
3.8 	Incentive Units Call Right.
3.8.1 	Call Right. At any time prior to a Change of Control, following
the termination of employment or other engagement of any Service
Provider with the Company or any of the Company subsidiaries (i) by
the Company for Cause, (ii) by the Company without Cause (subject to
the limitation set forth below), (iii) due to death or Disability, or (iv) due
to a resignation by the Service Provider without Good Reason, the
Company may, at its election, require the Service Provider and any or
all of such Service Provider’s Permitted Transferees, to sell to the
Company, or in the case of Restricted Incentive Units and certain
terminations with respect to Unrestricted Unit holders, forfeit, all or any
portion of such Service Provider’s Incentive Units as follows:
3.8.1.1 	For 	the 	Restricted 	Incentive 	Units, 	under 	all
circumstances of termination, such Restricted Incentive Units
shall be forfeited without consideration[.]
3.8.1.2 	Unrestricted 	Incentive 	Units 	shall 	be 	forfeited
without consideration in the event of the termination of such
Service 	Provider’s 	employment 	or 	other 	engagement 	by 	the
Company or any of the Company subsidiaries for Cause.
(Nickerson Dep. Tr. Ex. 56; Compl. Ex. F, at 2, 5, 14, 16 (emphasis added).)
122. 	Thus, the Operating Agreements are clear that a termination for “cause”
forfeits 	the 	holder’s 	right 	(without 	the 	payment 	of 	any 	consideration) 	to 	any
Unrestricted Incentive Units.

123. 	As a result, the key question that must be answered in order to resolve
the parties’ dueling arguments is: Was McFarlane properly terminated for “cause” as
defined by the Operating Agreements?
124. 	While 	Defendants’ 	respective 	Operating 	Agreements 	provide 	the
definition of “cause” for a termination, the other relevant provisions detailing the
scope 	of 	McFarlane’s 	employment 	and 	the 	procedures 	by 	which 	he 	could 	be
terminated are contained in the Amended Services Agreement.
125. 	As an initial matter, the Court notes that McFarlane’s termination did
not strictly comply with the procedural requirements contained in the Amended
Services Agreement, which—as quoted earlier in this Opinion—states as follows:
Termination Events
The 	Agreement 	may 	be 	terminated 	in 	the 	following 	manner 	and
circumstances:
(a) 	Upon mutual consent;
(b) 	Upon 30 days[’] notice from the Company’ [sic] board of directors
or Atlanta Topco Limited’s board of directors (unless waived by
[McFarlane]); or
(c) 	By [McFarlane] with three (3) months’ notice.
(Compl. Ex. A, at 2.)
126. 	Plainly, McFarlane was not terminated by mutual consent, nor did he
initiate 	his 	separation 	from 	Damovo. 	Therefore, 	the 	thirty-day 	notice 	period
contained in subpart (b) would be triggered, and it is undisputed that he did not
receive any prior notice of his termination at all (thirty days or otherwise).

127. 	However, although Defendants’ failure to comply with this provision
appears to constitute a breach of the Amended Services Agreement, a question of fact
exists as to whether (1) this was a material breach, and (2) whether this breach was
excused by McFarlane’s own prior material breaches. 	See McClure Lumber Co. v.
Helmsman Constr., Inc., 160 N.C. App. 190, 198 (2003) (“Whether a breach is material
or immaterial is ordinarily a question of fact.” (cleaned up)).
128. 	Putting aside the issue of notice, Defendants contend that McFarlane’s
termination was, in fact, for “cause” because he (1) participated in a fraud or act of
dishonesty as set out in subpart (b) of the definition of “cause”; (2) materially breached
the Amended Services Agreement as set out in subpart (c); and (3) engaged in willful
misconduct or refused to comply with lawful directives of the Board pursuant to
subpart (d).
129. 	Defendants’ arguments on this subject are identical to their contentions
discussed in detail above in connection with their affirmative defense of prior
material 	breach 	and 	their 	counterclaim 	for 	breach 	of 	the 	Amended 	Services
Agreement. 	Therefore, once again, the Court concludes that a genuine issue of
material fact precludes the entry of summary judgment as to this issue.
130. 	Finally, as McFarlane notes, subsections (c) and (d) of the definition of
“cause” required that McFarlane be given an opportunity to cure any such breach
following fifteen days’ written notice thereof.14 	It is undisputed, however, that
14 No such “cure provision” is contained within subpart (b), which concerns participation “in
a fraud or act of dishonesty against the Company.”

McFarlane was given no such cure period. (Compl. Ex. B; see also Quigley Dep. Tr.,
at 40–41; Wilson Dep. Tr., at 50.)
131. 	Defendants argue that—for at least some of the alleged misconduct at
issue—it was not feasible to provide McFarlane with a cure period. For example, they
contend, if McFarlane met with potential investors alone after having been ordered
not to do so, no opportunity to cure such a breach could logically exist because the
damage would have already been done.
132. 	The Court concludes that this issue is yet one more example of a factual
dispute that the jury will have to weigh in determining whether McFarlane’s
termination was—or was not—for “cause.”
133. 	For all of these reasons, the Court concludes that the parties’ respective
Motions for Summary Judgment as to the following claims are each DENIED: (1)
McFarlane’s claim for breach of UK Atlanta’s Operating Agreement and Incentive
Unit Agreement; (2) McFarlane’s claim for breach of Lares’s Operating Agreement
and Incentive Unit Agreement; (3) McFarlane’s claim for declaratory judgment as to
his entitlement to the incentive units; and (4) Defendants’ claim for declaratory
judgment as to McFarlane’s alleged forfeiture of the incentive units. 	See Wilson v.
McClenny, 262 N.C. 121, 131 (1964) (holding that whether an employer breached a
fixed-term employment contract by terminating the employee for “neglect[ing] the
business of [the employer]” was a “question for the jury”); Johnson v. Colonial Life &
Accident Ins. Co., 173 N.C. App. 365, 369 (2005) (holding that the question of whether
an employee was terminated for cause after allegedly “ma[king] false or misleading

statements” or whether such allegations were “a mere pre-text for the actual reason
he was fired[ ]” were issues of fact for the jury).
IV. 	Non-Disclosure Agreement
134. 	In 	support 	of 	UK 	Atlanta’s 	counterclaim 	for 	breach 	of 	the 	Non-
Disclosure 	Agreement, 	Defendants 	contend 	that 	following 	his 	termination,
McFarlane failed to return confidential documents belonging to the Damovo Group.
135. 	The Non-Disclosure Agreement states in relevant part as follows:
2. 	Return of Company Property
I acknowledge that I may have in my possession or under my control, at
the time of termination or resignation, various property and information
belonging to the Company, its subsidiaries and/or related corporations
and entities, including, without limitation, Confidential Information (as
defined in section 3 hereof), keys, pass cards, customer lists, inventory
lists, pricing lists, credit lists, computer hardware and software. 	I
acknowledge that immediately upon the cessation of my employment I
will forthwith, without delay, return to the Company all copies in any
form whatsoever, any such property and Confidential Information.
3. 	Confidentiality
I hereby acknowledge that in the course of carrying out my duties
hereunder, I will develop, have access to, and will be entrusted with
information relating to the business and affairs of the Company, its
subsidiaries and/or related corporations and entities, or their customers,
including, without limitation, trade secrets and know-how relating to
their present and planned businesses, marketing techniques, suppliers
and customers, customer lists and contacts, financing and debt structure
[(]collectively, the “Confidential Information”), I acknowledge that the
disclosure 	of 	any 	of 	the 	Confidential 	Information 	to 	suppliers,
competitors or the general public would be highly detrimental to the best
interests of the Company. 	I therefore covenant and agree that I shall
not disclose, without the Company’s express written consent, either
during or following the term of my engagement, any Confidential
Information to any person, firm, corporation or other entity other than
the directors and officers of the Company or as may be necessary In [sic]
connection with the business of the Company, nor shall use, directly or
indirectly, any Confidential Information for my own purposes or on

behalf or in conjunction with any other person for any purpose other
than the business of the Company. This covenant shall not apply to any
Confidential Information that becomes public through no fault of mine.
(Compl. Ex. A, at 6–7 (emphasis added).)
136. 	Defendants have not presented any evidence suggesting that McFarlane
has actually used—or otherwise disclosed—any of their confidential information.
Instead, UK Atlanta’s counterclaim is predicated on McFarlane’s failure to return
confidential information in his possession upon the termination of the Amended
Services Agreement. This position is consistent with the plain language of the Non-
Disclosure Agreement, which (as quoted above) states, in pertinent part, that by
signing the agreement McFarlane agreed to “return to the Company all copies in any
form whatsoever, any such . . . Confidential Information” upon the termination of the
Amended Services Agreement.
137. 	Among the evidence relied upon by Defendants on this issue is the
following excerpt from McFarlane’s deposition:
Q: 	Okay. All right. I want to look at the exhibits to your reply. In
particular, can you turn to Exhibit L which I believe is the last
exhibit -- sorry, second to last exhibit.
A: 	Yes.
Q: 	At the top it says -- in the header it says “Confidential, Legally
Privileged, 	October 	2023” 	and 	the 	title 	of 	the 	document 	is
“Briefing Note - Damovo Poland Management Transition.”
Where was this document located within your files when you
discovered it?
A: 	I believe it was in the email attachment.
Q: 	This was an email that you still had access to?
A: 	It would have been within the email, yes.

Q: 	It was a Damovo email?
A: 	Yes.
. . .
Q: 	Hold on. 	Let me ask the question. 	Did you understand that
Damovo 	considered 	this 	document 	confidential 	when 	you
attached it to the reply.
A: 	Yes.
(McFarlane Dep. Tr., at 59–61; see also Reply to Countercls. ¶ 51.)
138. 	Moreover, at the 26 February hearing, McFarlane’s counsel conceded
that McFarlane has failed to return at least some of the information deemed to be
confidential and belonging to the Damovo Group under the terms of the Non-
Disclosure Agreement.
139. 	Therefore, Defendants’ Motion for Summary Judgment is GRANTED
as to the issue of liability on UK Atlanta’s counterclaim for breach of the Non-
Disclosure 	Agreement. 	Plaintiffs’ 	Motion 	for 	Summary 	Judgment 	as 	to 	this
counterclaim is DENIED. The issue of damages relating to this claim will be decided
by the jury at trial.
V. 	Conversion
140. 	Each 	side 	has 	also 	sought 	summary 	judgment 	on 	UK 	Atlanta’s
counterclaim for conversion.
141. 	The 	Amended 	Counterclaims 	summarize 	UK 	Atlanta’s 	conversion
theory as follows:
On or about 1 April 2024, UK Atlanta caused to be paid to McFarlane
his full compensation for the month of April ($52,667).

Because 	McFarlane’s 	services 	were 	terminated 	on 	8 	April 	2024,
however, he owes UK Atlanta reimbursement of $38,245.03, which is his
unearned compensation less certain approved expense reimbursements.
On 10 May 2024, UK Atlanta demanded that McFarlane pay the amount
owed by 17 May 2024. To date, he has failed or refused to reimburse UK
Atlanta the $38,245.03 he owes.
In addition, McFarlane has failed or refused to return work laptops he
was 	provided 	by 	UK 	Atlanta. 	Under 	the 	[Amended] 	Services
Agreement, he was required to return these laptops to UK Atlanta upon
termination of the agreement. 	On information and belief, the value of
these laptops is or exceeds $1,813.85.
. . .
As alleged herein, Plaintiffs have refused UK Atlanta’s demand that
they return the work laptop[s] provided to McFarlane and repay the
$38,245.03 in unearned pay they have retained after their services were
terminated (the “Converted Property”).
The Converted Property belongs to and is owned by UK Atlanta.
(Am. Countercls. ¶¶ 109–12, 155–56.)
142. 	In Defendants’ Motion for Summary Judgment, UK Atlanta has only
sought summary judgment with respect to its claim that McFarlane has converted
two laptops that were provided to him for work purposes.
143. 	“There are, in effect, two essential elements of a conversion claim:
ownership in the plaintiff and wrongful possession or conversion by the defendant.”
Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523
(2012) (cleaned up). 	“In cases where the defendant comes into possession of the
plaintiff's property lawfully, the plaintiff must show that it made a demand for the
return of the property that was refused by the defendant.” Morris Int’l, Inc. v. Packer,
2021 NCBC LEXIS 99, at *27 (N.C. Super. Ct. Nov. 2, 2021) (citing Hoch v. Young,
63 N.C. App. 480, 483 (1983)).

144. 	It is undisputed that McFarlane is currently in possession of two laptops
that were used by himself and his executive assistant for Damovo-related work.
(McFarlane Dep. Tr., at 40–42.)
145. 	Having thoroughly reviewed the evidence of record and the parties’
respective arguments, the Court concludes that there is a genuine dispute of material
fact as to whether UK Atlanta—as opposed to McFarlane—is the lawful owner of the
laptops at issue.
146. 	In his deposition, McFarlane testified as to his belief that he purchased
the laptops and then “expensed” them to UK Atlanta. (McFarlane Dep. Tr., at 42.)
However, even if UK Atlanta did, in fact, reimburse him for the costs of the laptops,
that fact in isolation is not dispositive of UK Atlanta’s claim of ownership.
147. 	Among other things, there is no clear evidence in the record as to the
intent of the parties regarding the ownership issue, any existing company policy on
this subject, or how the laptops were accounted for by UK Atlanta in its accounting
records.
148. 	Because of the factual dispute as to the ownership question, this issue
must be decided by a jury. 	See, e.g., Noa v. Khoury, 2017 U.S. Dist. LEXIS 233013,
at *30 (E.D.N.C. Sept. 5, 2017) (concluding that “where the evidence of record
contains minimal development of issues pertaining to” the ownership of the property
that is the subject of the conversion claim, “neither side has demonstrated the
absence of a genuine dispute of material fact as to conversion” (cleaned up)).

149. 	Accordingly, the parties’ respective Motions for Summary Judgment as
to UK Atlanta’s counterclaim for conversion are each DENIED. See Madey v. Duke
Univ., 336 F. Supp. 2d 583, 600 (M.D.N.C. 2004) (denying summary judgment where
there was “a genuine issue of material fact regarding whether [defendant] ha[d] an
ownership interest in the [property]”).
VI. 	Remaining Counterclaims
150. 	McFarlane 	has 	also 	moved 	for 	summary 	judgment 	on 	each 	of
Defendants’ remaining counterclaims for breach of fiduciary duty, fraud, constructive
fraud, and embezzlement.
151. 	However, the Court need not discuss these claims in any detail because
it suffices to say that each of them is based on the same alleged misconduct by
McFarlane as discussed in detail above. 	Once again, the Court has held that a
genuine issue of material fact exists as to whether he engaged in the wrongful acts
asserted by Defendants.
152. 	Therefore, Plaintiffs’ Motion for Summary Judgment as to each of these
counterclaims is DENIED.
VII. 	Release
153. 	Finally, McFarlane seeks summary judgment on his affirmative defense
that Defendants’ counterclaims are barred in whole or in part by the “mutual release
of claims” provision (the “Release”) contained in the Amended Services Agreement to
the extent those counterclaims are based on any conduct attributable to McFarlane
occurring on or prior to 12 May 2023.

154. 	A contractual release of claims “operates as a merger of, and bars all
right to recover on, the claim or right of action” that is the subject of the release. Fin.
Servs. of Raleigh, Inc. v. Barefoot, 163 N.C. App. 387, 392 (2004) (cleaned up).
155. 	The section of the Amended Services Agreement upon which McFarlane
relies states in relevant part as follows:
[I]n exchange for the consideration provided in this Agreement, the
Company, 	including 	each 	member 	of 	the 	Company 	subsidiaries,
affiliates, predecessors, successors, and assigns, and each of its and their
respective officers, directors, agents, members, trustees, and partners,
in their corporate and individual capacities (collectively, the “Company
Releasors”) irrevocably and unconditionally fully and forever waive,
release, 	and 	discharge 	[McFarlane], 	including 	each 	of 	his 	or 	its
respective officers, directors, agents, members, trustees, and partners,
in their corporate and individual capacities (collectively, the “Agent
Released Parties”) from any and all claims, demands, actions, causes of
actions 	[sic], 	judgments, 	rights, 	fees, 	damages, 	debts, 	obligations,
liabilities, 	and 	expenses 	(inclusive 	of 	attorneys’ 	fees) 	of 	any 	kind
whatsoever, whether known or unknown, that Company Releasors may
have or have ever had against the Agent Released Parties, or any of
them, by reason of any actual or alleged act, omission, transaction,
practice, conduct, occurrence, or other matter from the beginning of time
up 	to 	and 	including 	the 	date 	of 	[McFarlane’s] 	execution 	of 	this
Agreement.
(Compl. Ex. A, at 3 (emphasis added in part and omitted in part).)
156. 	It 	is 	undisputed 	that 	McFarlane 	signed 	the 	Amended 	Services
Agreement on 12 May 2023. Therefore, the Release—based on its plain language—
released McFarlane from liability for all existing claims, whether known or unknown,
based on his acts or omissions occurring on or before that date.
157. 	Defendants do not dispute the potential applicability of the Release.
Instead, they argue that questions of fact exist as to which, if any, of their

counterclaims are predicated on McFarlane’s conduct on or before the effective date
of the Amended Services Agreement. The Court agrees.
158. 	Accordingly, the effect of the Release on Defendants’ counterclaims
hinges on factual determinations that must be decided by the jury at trial. Therefore,
Plaintiffs’ Motion for Summary Judgment on this basis is DENIED.15
CONCLUSION
THEREFORE, IT IS ORDERED as follows:
1. 	Defendants’ Motion for Summary Judgment is GRANTED with respect
to 	Plaintiffs’ 	claim 	for 	unjust 	enrichment, 	and 	that 	claim 	is
DISMISSED with prejudice.
2. 	Defendants’ 	Motion 	for 	Summary 	Judgment 	is 	GRANTED 	as 	to
liability 	only 	with 	respect 	to 	UK 	Atlanta’s 	counterclaim against
Plaintiffs for breach of the Non-Disclosure Agreement. 	The amount of
damages UK Atlanta is entitled to recover with respect to this claim will
be determined at trial.
3. 	In all other respects, each of the Motions for Summary Judgment is
DENIED.
15 To the extent that McFarlane is also making a general statute of limitations argument
separate and apart from his argument based on the applicability of the Release, he is
similarly not entitled to summary judgment on that affirmative defense for this same reason.
See, e.g., Shelton v. Fairley, 72 N.C. App. 1, 9 (1984) (“If there is a question of fact as to when
the breach or discovery of it occurred, and when the statute of limitations thus began to run,
summary judgment on that issue is not appropriate.” (cleaned up)).

SO ORDERED, this the 10th day of April 2026.16
/s/ Mark A. Davis
Mark A. Davis
Special Superior Court Judge for
Complex Business Cases
16 As noted above, this Opinion was originally filed under seal on 10 April 2026. This public
version of the Opinion is being filed on 20 April 2026. To avoid confusion in the event of an
appeal, the Court has elected to state the filing date of the public version of the Opinion as
10 April 2026.