Dear Rachel,
I am pleased to write with what I hope will be a welcome end-of-quarter communication. Two significant events occurred today that allow us to formally close this matter on favorable terms for Crestline Packaging Solutions. Below is a comprehensive summary for your records and for the benefit of David and Sarah.
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**1. CONFIRMATION OF SETTLEMENT PAYMENT AND CASE DISMISSAL**
First, we have confirmed that Crestline Packaging Solutions LLC ("CPS") received the **$9,750,000** lump-sum settlement payment from Harlow Chemical Supply Inc. ("Harlow") via wire transfer today, September 30, 2024. This payment was made within the 14-business-day window required under Section 3.1 of the Settlement Agreement executed on September 12, 2024.
Second, the **Stipulation and Order of Dismissal with Prejudice** was filed today in *Crestline Packaging Solutions LLC v. Harlow Chemical Supply Inc., Gerald W. Norris, and Kenneth Fielding*, Case No. 2:24-cv-00891, in the United States District Court for the Southern District of Ohio, Eastern Division, before the Honorable Judge Patricia Langford. The Court has entered the order. All claims and counterclaims are now dismissed with prejudice, with each party bearing its own costs and attorneys' fees except as otherwise provided in the Settlement Agreement. The stipulation was co-signed by Brian Whitaker of Voss Gentry & Whitaker LLP on behalf of all defendants. A copy of the filed order is attached for your records.
With these milestones complete, Calderwood & Harkness LLP is formally closing **Matter No. 1006-00004**.
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**2. SETTLEMENT RECOVERY SUMMARY AND FINANCIAL RECONCILIATION**
For ease of reference, the following is a summary of CPS's net monetary recovery:
Total Settlement Recovery: $9,750,000.00 Less: Calderwood & Harkness LLP Fees and Expenses (approx.): ($1,420,000.00) Less: Thornburg Analytics LLC (Forensic Chemical Analysis): ($185,000.00) Less: Meridian Forensic Consulting Group LLC (Damages Expert): ($127,500.00) ───────────── Net Recovery to CPS: $8,017,500.00
A few notes on the above:
- Calderwood & Harkness's fees were billed on an hourly basis; there was no contingency arrangement. Our final invoices will follow under separate cover within the next two weeks. - The Thornburg Analytics and Meridian Forensic Consulting Group invoices have been previously submitted to CPS and, to our understanding, have been paid in full. - For context, the $9,750,000 gross recovery falls within the reasonable damages range of $8.9 million to $12.6 million estimated by Jeffrey Callahan of Meridian Forensic Consulting Group. Importantly, CPS also achieved substantial non-monetary relief (detailed below) that adds significant long-term value beyond the monetary recovery.
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**3. SUMMARY OF NON-MONETARY RELIEF SECURED**
In addition to the monetary settlement, CPS secured the following non-monetary protections under the Settlement Agreement:
- **Permanent Injunction.** Harlow and all of its affiliates, officers, and employees are permanently enjoined from manufacturing, selling, distributing, or using any formulation derived from CPS-BC-1147 or any CPS confidential information. This injunction survives the dismissal of the case and is enforceable by the Court.
- **Return and Destruction of Trade Secret Materials.** Harlow is required to return all CPS technical data, batch records, analytical reports, and formulation information within **30 days** of execution of the Settlement Agreement — i.e., by **October 12, 2024** — and to certify destruction of all copies under oath by an authorized officer. **This is the key near-term compliance deadline requiring monitoring** (see Section 4 below).
- **5-Year Non-Solicitation Covenant.** Harlow has agreed to a 5-year non-solicitation covenant with respect to all current CPS customers, running from September 12, 2024 through September 12, 2029. Notably, this extends well beyond the 3-year post-termination non-compete that existed under Section 9.1 of the original Toll Manufacturing Agreement dated March 15, 2017.
- **No Admission of Liability.** Harlow has made no admission of liability, which is standard for settlements of this nature.
- **Mutual Confidentiality.** The terms of the Settlement Agreement are subject to mutual confidentiality obligations. Disclosure is permitted only to auditors, tax advisors, and as required by law or legal process.
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**4. POST-SETTLEMENT ACTION ITEMS AND COMPLIANCE MONITORING**
While the litigation is now concluded, I would recommend the following near-term steps:
**(a) Calendar the October 12, 2024 Deadline.** CPS's legal team should calendar the October 12, 2024 deadline for receipt of Harlow's return of all CPS trade secret materials and sworn certification of destruction. This includes any data related to the analysis of CPS Concentrate A that was transmitted to Archer Material Sciences Inc. during the course of Harlow's reverse-engineering efforts. If the certification is not received by the deadline, please notify us immediately — Calderwood & Harkness stands ready to enforce the Settlement Agreement through the Court.
**(b) Customer and Internal Communications.** We suggest that CPS inform its sales team — specifically Brian Novotny — and affected customers as appropriate that the matter has been resolved. The customers most directly impacted by Harlow's solicitation activities were Mapleridge Paper Corp., Pinnacle Flexible Films LLC, Orion Paperboard Inc., Great River Packaging Co., and TerraFold Industries LLC. Any such communications should be consistent with the mutual confidentiality provision — CPS may confirm the matter is resolved but should not disclose the financial terms of the settlement. We are happy to review any proposed communications in advance.
**(c) Ongoing Vigilance.** If at any point during the 5-year non-solicitation period (through September 12, 2029) CPS becomes aware of any violation of the permanent injunction or the non-solicitation covenant — whether through customer reports, market intelligence, or otherwise — please contact Calderwood & Harkness immediately so that we may take prompt enforcement action.
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**5. BRIEF RECAP OF THE MATTER**
For the benefit of the full distribution group, the following is a brief summary of the matter from inception to resolution:
CPS retained Calderwood & Harkness in early 2024 in connection with the misappropriation of its proprietary barrier coating formulation CPS-BC-1147 by Harlow Chemical Supply Inc., CPS's former toll-manufacturing supplier. Our investigation revealed that Harlow had reverse-engineered the formulation — including the five undisclosed constituents contained in CPS Concentrate A — in violation of the Toll Manufacturing Agreement dated March 15, 2017. Harlow then marketed a near-identical product under the brand name "ShieldCoat Pro 900" and actively solicited CPS's own customers at an approximately 15% discount.
CPS moved decisively. We filed the complaint and motion for a temporary restraining order on February 26, 2024. The TRO was granted by Judge Langford on March 4, 2024, and a preliminary injunction followed on April 18, 2024. The parties participated in a full-day mediation before retired Judge Franklin DeLuca of Ashford Dispute Resolution Services LLC on August 14, 2024, which resulted in a framework for resolution. The Settlement Agreement was executed on September 12, 2024, and with today's receipt of settlement funds and entry of the dismissal order, the matter is now fully concluded — approximately seven months from filing to resolution.
Throughout the litigation, the forensic analysis conducted by Dr. Elena Vasquez of Thornburg Analytics LLC was instrumental to the strength of CPS's position. Her testing confirmed a match in all 14 constituents of CPS-BC-1147 and ShieldCoat Pro 900 within ±0.3% by weight — evidence that proved central to both the preliminary injunction ruling and the favorable settlement outcome.
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**6. ACKNOWLEDGMENTS**
I want to extend my sincere thanks to you, Rachel, and to David Kessler, Dr. Margaret Yuen, Brian Novotny, and the broader CPS team for your exceptional cooperation and responsiveness throughout this matter. The speed and thoroughness with which your team provided technical documentation and customer intelligence made a material difference in the pace and strength of this litigation. I also want to thank Sarah Engel and the Ridgepoint Capital Partners team for their support and engagement at every stage.
It has been a privilege to represent Crestline Packaging Solutions in this significant matter involving the protection of one of its most valuable proprietary assets. The CPS-BC-1147 product line represents approximately $47.23 million — roughly 22% — of CPS's annual revenue, and we are gratified that the outcome provides both meaningful financial recovery and robust long-term protections for that business.
Calderwood & Harkness remains available for any follow-up matters, including enforcement of the Settlement Agreement, monitoring of Harlow's compliance obligations, or any other intellectual property protection needs that may arise. Please do not hesitate to reach out at any time.
With warm regards,
**Catherine Bloom** Partner Calderwood & Harkness LLP 1200 Riverview Tower, 400 South High Street Columbus, OH 43215 Direct: (614) 555-0187
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**Attachment:** Stipulation and Order of Dismissal with Prejudice — *Crestline Packaging Solutions LLC v. Harlow Chemical Supply Inc. et al.*, Case No. 2:24-cv-00891 (S.D. Ohio) (filed September 30, 2024)
*Note: A final matter closing memorandum and complete document index will be provided under separate cover.*
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