Several rookie mistakes in here by the Shred team. First of all if you are gong to start a company while working for someone else, get an explicit agreement in writing before starting that venture. Second, there should have been an agreement/contract in place for doing the additional work which was requested by Smule. The claims of theft could still be made by Smule but Shred's story loses credibility for me because these basic business practices weren't followed. Who is to say that the lines weren't blurred when it comes to leveraging the assets of the former company? And if a laptop is obviously the property of Smule then nobody can force you to keep it.

I feel much empathy for the Shred team but the story has a bunch of challenges buried within.