Lamb, CAHB, CAHB Operating v. LSM, Shaneyfelt, et al.
Damages & Exposure Summary
March 28, 2026
PROTECTED UNDER ARK. R. EVID. 408 — SETTLEMENT COMMUNICATION
Demand sent March 20, 2026: $5,500,000
Direct traceable losses: $2,616,232 | Current compensatory damages presentation (A–D): $11,846,563 | High end: $19.6M+
Category A — Direct Traceable Losses ($2,616,232)
Each item traceable to specific transactions in bank records, tax filings, court orders, or Shaneyfelt’s own work product. Causation runs directly through the insured’s professional conduct.
| Item | Amount | Entity | Overlap | Source |
|---|---|---|---|---|
| IRS levy (Form 668-A) | $118,696 | Matt Lamb | 3 levy notices on file. Direct consequence of defective K-1s. | |
| Clark — CAHB debt zeroed via Shaneyfelt journal entry JS129 | $40,000 | CAHB LLC | None | Shaneyfelt’s journal entry. Kristen Chapin BK testimony: “we did not remit that to those people.” |
| Linda Jones — CAHB debt zeroed via Shaneyfelt journal entry JS129 | $40,000 | CAHB LLC | None | Same journal entry, same sworn testimony. |
| Escrow-to-Chapin Team conversion (13 transfers, 100% unrecorded) | $103,984 | CAHB LLC | Subset of E1 | Bank records. Zero GL entries for any transfer. Shaneyfelt maintained the books. |
| May 2022 conversion — unrecovered after settlement | $284,598 | CAHB LLC | Subset of E1 | $1,034,598 sweep from CAHB to Ultra Holdings. ~$750K recovered. Unrecorded in GL. |
| Kristen Chapin personal transfers (CAHB LLC) | $16,813 | CAHB LLC | None | 6 electronic bank transfers to personal checking. Account-verified. Zero returned. |
| Kristen Chapin personal transfers (CAHB Op.) | $27,915 | CAHB Op. | None | 3 electronic bank transfers. Account-verified. Zero returned. |
| Home Depot expense shifting — tax harm to CAHB Operating | $138,673 | CAHB Op. | None | $326K in CAHB Op expenses shifted to Chapin Team. Shaneyfelt prepared both returns. Tax harm at applicable rates. |
| LOC net drain (286 txns, 4 LOC accounts) | $1,845,553 | CAHB LLC | None | Forensic DB, bank records. Chapin executed the transfers. Shaneyfelt tracked the LOC activity on CAHB’s books, questioned the balances, and never identified or reported approximately $5.9M in payments to personal LOC accounts. |
| Category A Total | $2,616,232 | |||
Category B — Consequential Fees & Costs ($983,693)
Downstream costs incurred as a consequence of the insured’s defective work product. Each supported by invoices or court orders.
| Item | Amount | Entity | Source / Basis |
|---|---|---|---|
| Attorney fees — GRO (Lamb-paid portion) | $450,164 | Matt Lamb | 109 deduplicated invoices across 3 matters. Fees incurred to unwind consequences of defective accounting. |
| Attorney fees — GRO (CAHB/Op portion) | $247,259 | Alloc. Pend. | 22 deduplicated invoices. Entity allocation to be finalized. |
| Attorney fees — Rose Law (bankruptcy response) | $81,270 | Alloc. Pend. | 6 invoices. Downstream fees to respond to Chapin bankruptcy filings. |
| Receiver costs — Kelley Commercial Partners | $205,000 | Alloc. Pend. | Court-appointed receiver, 26 months. Receivership duration extended by insured’s failure to maintain auditable books. |
| Category B Total | $983,693 | ||
Category B2 — Equitable Remedy ($238,638)
Disgorgement of fees paid for defective professional services. Separate legal theory from compensatory damages.
| Item | Amount | Entity | Source / Basis |
|---|---|---|---|
| LSM fees — disgorgement (partial; 19 verified payments) | $238,638 | Alloc. Pend. | Fees paid for defective professional services. Full engagement period est. $350K–$450K; balance pending subpoena. |
| Category B2 Total | $238,638 | ||
Category C — Expert-Supported Losses ($7,508,000 – $14,230,000)
Each item supported by identified expert methodology, tax records, or forensic reconstruction. Amounts to be presented through expert testimony at trial.
| Item | Floor | High End | Entity | Overlap | Source |
|---|---|---|---|---|---|
| Phantom K-1 tax harm (2021 + 2022) | ~$750,000 | ~$1,000,000 | Matt Lamb | None | K-1s locked, 1040s on file. Expert to calculate exact tax delta from overstated income. |
| Lost profits — Frost model (Scenarios 1–4)** | $6,114,000 | $12,110,000 | CAHB LLC | ALT to Cat. F | Frost PLLC 38-page model. 4 scenarios. Most conservative used as floor. |
| Tom Chapin — private lender exposure | $644,000 | $1,120,000 | CAHB LLC | None | 4 competing calculations from different ledger sources. Expert reconciliation needed. |
| Lost profits — CAHB Operating revenue disruption | TBD | TBD | CAHB Op. | None | Frost model covers CAHB LLC only. Separate analysis not yet performed. |
| Category C Floor / High End | $7,508,000 | $14,230,000 | |||
Category D — Non-Economic Damages ($500,000 – $1,500,000)
Supported by medical records, prescription history, and treating provider documentation.
| Item | Floor | High End | Entity | Support |
|---|---|---|---|---|
| Emotional distress — anxiety, insomnia, weight loss, family impact | $500,000 | $1,500,000 | Matt Lamb | GAD dx 08/2022 (F41.1), insomnia dx 03/2022 (G47.00). Clonazepam, trazodone, clonidine — 4+ years continuous. Resting HR 112. 34 lb weight swing. Son born 02/2022. 8 PHR medical record PDFs on file. Treating therapist support and related records available upon request, subject to confidentiality protections. |
| Category D | $500,000 | $1,500,000 | ||
Category E — Reserve Items (if settlement not reached)
Researched. Available for inclusion with additional documentation or expert work.
| # | Item | Est. Range | Entity | Overlap | Status |
|---|---|---|---|---|---|
| E1 | CAHB→Chapin entity transfers — net drain | ~$1,381,696 | TBD | Incl. escrow & May 2022 from Cat. A | 158 transfers, 59% unrecorded in GL. Expert needed to net against Cat. A items. |
| E2 | Prejudgment interest (Ark. § 16-65-114) | ~$932,000 | All | None | 6% on Cat. A+B ascertainable items. Does not apply to lost profits or non-economic damages. |
| E3 | Frost remediation / forensic reconstruction | ~$350,000 | Matt / CAHB | None | Cost to reconstruct insured’s defective work product. Estimated. |
| E4 | LSM fees — full engagement period | $350K–$450K | Alloc. Pend. | Replaces partial in Cat. B2 | Current Cat. B2 shows $238K (19 payments). Full period est. $350K–$450K. Pending subpoena. |
| E5 | CPA remediation / amended returns | TBD | Matt / CAHB | None | Cost to redo 2019–2022 returns, GL reconstruction, K-1 corrections. |
| E6 | Credit damage / increased borrowing costs | TBD | Matt / CAHB | Related to Cat. F | Higher rates and lost refi opportunities from defective financials on file with lenders. |
| E7 | Lost equity sale opportunities | TBD | CAHB LLC | None | Could not sell note equity to investors with unauditable books. Capital recycling halted. |
| E8 | Matt’s time / opportunity cost | TBD | Matt Lamb | None | Years on litigation and receivership instead of acquiring and selling properties. |
Category F — Alternative / Non-Cumulative
Presented in the alternative. Not additive to items above.
| Item | Amount | Entity | Alternative To | Notes |
|---|---|---|---|---|
| Bank loan denials / borrowing problems from defective returns | TBD by expert | Matt Lamb | ALT to Cat. C lost profits | Defective returns overstated liabilities by $2.1M, producing negative DSCR. Multiple lenders halted refinancing. |
Category G — Punitive Exposure
| Ratio | On Full Presentation ($11.8M) | On Cat. A+B+B2 ($3.8M) | Notes |
|---|---|---|---|
| 1:1 | $11,846,563 | $3,838,563 | Single-digit multipliers comport with due process. BMW of N. Am. v. Gore, 517 U.S. 559 (1996). Punitive exposure supported by fiduciary breach with documented neglect of professional responsibilities. |
| 3:1 (est.) | $35,539,689 | $11,515,689 | |
| 4:1 | $47,386,252 | $15,354,252 |
Exposure Summary
| A — Direct traceable losses | $2,616,232 |
| B — Consequential fees & costs | $983,693 |
| B2 — Equitable remedy (disgorgement) | $238,638 |
| C — Expert-supported losses (floor) | $7,508,000 |
| D — Non-economic damages (floor) | $500,000 |
| Current compensatory damages presentation | $11,846,563 |
| E — Reserve items (est. where known) | ~$3,000,000+ |
| G — Punitive exposure (if liability established) | See ratio table |
| COMPENSATORY + RESERVE EXPOSURE | $14M – $17M+ |
Settlement Risk Factors
These factors do not appear on the damages table but materially affect settlement valuation.
- Defendant deposition testimony. Shaneyfelt’s deposition revealed gaps in his understanding of the client’s financial structure, inability to explain his own journal entries, inconsistent descriptions of his engagement scope, and repeated attribution of responsibility to others. This testimony independently increases reserve value because it makes every contested damages item harder to defend and strengthens fiduciary-breach and punitive exposure.
- Simple liability narrative. Hired CPA → defective books → defective returns → IRS levy → lenders halt refinancing → court-appointed receiver → years of cleanup. This does not require expert testimony to understand.
- Third-party corroboration. IRS levy notices, lender correspondence, receiver court orders, and 292 bank transactions misclassified in the general ledger. Objective records that do not depend on the plaintiff’s characterization.
- Records problem favors the plaintiff. The defense must argue from financial records its insured was responsible for maintaining. Missing entries, misclassifications, and inconsistencies undermine the defense, not the plaintiff.
- Defense must win nearly everywhere. To bring compensatory exposure below $5.5M, the defense must prevail on the Frost model, most of the LOC drain, consequential fees, and non-economic damages. Partial wins still leave exposure above the demand.
- Litigation cost. Forensic accounting, tax experts, entity standing analysis, lender causation discovery, and allocation motion practice. This case will cost seven figures to defend through verdict.
**Frost model scenarios: Trial Date ($6.1M), 3-Year ($8.9M), 5-Year ($10.4M), 8-Year ($12.1M). 31 acq/yr (actual 2021: ~50), 15% discount rate, excludes rentals and flips.
Overlap flags indicate where items may share underlying transactions. Non-cumulative items (Cat. F) are presented in the alternative only.
The current demand of $5.5M is below the direct-loss floor plus consequential costs ($3.8M) and represents a fraction of total compensatory exposure. The damages, the deposition record, and the cost of defense support resolution at or above the demand.