1006-00005 · Crestline Packaging Solutions LLC · Administration

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CALDERWOOD & HARKNESS LLP

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

ATTORNEY WORK PRODUCT

This memorandum is a privileged and confidential attorney-client communication and constitutes attorney work product prepared in anticipation of litigation and in connection with the provision of legal advice. This document is not intended for disclosure to third parties and should not be disclosed without the prior written consent of Calderwood & Harkness LLP and Crestline Packaging Solutions LLC. Any inadvertent disclosure does not constitute a waiver of any applicable privilege or protection.

MEMORANDUM

I. PURPOSE

This memorandum summarizes the final disposition of Matter No. 1006-00005, Crestline Packaging Solutions LLC v. Ridgeway Freight Services Inc., Cause No. 342-2021-04871-TX, in the 342nd Judicial District Court of Tarrant County, Texas. The purpose of this memorandum is to provide a comprehensive record of the matter from engagement through resolution, to confirm that all closing actions required under the Firm's matter management protocols have been completed, and to identify any remaining open items that require monitoring following the formal closing of the file.

This matter is being closed with a status designation of closed_completed effective December 17, 2021. The matter has been resolved through a negotiated settlement reached at mediation on November 18, 2021, and memorialized in a fully executed Settlement Agreement and Mutual Release dated December 3, 2021. An Agreed Order of Dismissal with Prejudice disposing of all claims and counterclaims was filed with the Court on December 14, 2021. The first settlement installment of $1,000,000.00 has been received by the client, and the second installment of $575,000.00 remains outstanding and is being tracked by the engagement team as described in Section VIII below.

II. MATTER SUMMARY

The following table presents the key identifying details and background information for Matter No. 1006-00005:

The dispute arose from Ridgeway's systematic overbilling of CPS on freight transportation invoices submitted under the parties' MTSA. Over a 26-month period beginning in February 2019 and continuing through March 2021, Ridgeway overcharged CPS a total of $1,847,632.19 through a combination of inflated per-mile rates, improper fuel surcharge calculations, unauthorized accessorial charges, and duplicate invoices. The overbilling was first identified internally by CPS's Vice President of Supply Chain & Logistics, Patricia Sung, during a quarterly budget review in October 2020. Following an extensive internal audit and unsuccessful pre-litigation efforts to resolve the dispute, CPS retained Calderwood & Harkness LLP to pursue recovery of the overcharges.

III. OUTCOME

A. Settlement. The matter was resolved through a negotiated settlement reached at a full-day mediation session conducted on November 18, 2021, at the Lone Star Dispute Resolution Center, 300 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. The mediation was conducted by Judge (Ret.) Constance Farr, a widely respected neutral with extensive experience in complex commercial disputes in the Tarrant County area.

Following intensive arm's-length negotiations facilitated by Judge Farr over the course of the full day, the parties reached a settlement agreement in principle on the evening of November 18, 2021. The Settlement Agreement and Mutual Release was subsequently negotiated, finalized, and fully executed on December 3, 2021. The Settlement Agreement was executed on behalf of CPS by Margaret "Meg" Ashford, Chief Executive Officer and President, and on behalf of Ridgeway by Raymond "Ray" Calder, Founder and Chief Executive Officer. The Settlement Agreement was approved as to form by Francesca Morano of Calderwood & Harkness LLP on behalf of CPS and by Marcus T. Hogue of Bartlett, Hogue & Sinclair LLP on behalf of Ridgeway.

The key terms of the Settlement Agreement and Mutual Release are as follows:

Settlement Amount: The total settlement amount is $1,575,000.00, representing approximately 85.2% of the total documented overcharges of $1,847,632.19.

Payment Schedule: The settlement amount is payable in two installments:

First Installment: $1,000,000.00, due within thirty (30) days of execution of the Settlement Agreement (i.e., by January 2, 2022). This installment was received on December 10, 2021, well in advance of the contractual deadline. Payment was made by wire transfer to CPS's designated account at First Buckeye National Bank, Columbus, Ohio.

Second Installment: $575,000.00, due within ninety (90) days of execution of the Settlement Agreement (i.e., by March 3, 2022). This installment remains outstanding and is being actively tracked by the engagement team, as described more fully in Section VIII below.

Counterclaim Withdrawal: Ridgeway agreed to withdraw its $340,000 lost-profits counterclaim with prejudice. No payment was required from CPS in connection with the counterclaim. The counterclaim is fully extinguished.

Mutual General Releases: Both parties executed mutual general releases of all claims, demands, causes of action, and liabilities arising out of or related to the MTSA, the freight transportation services provided thereunder, and the matters alleged in the litigation, with an express reservation for the parties' respective rights and obligations under the Settlement Agreement itself.

Confidentiality: The Settlement Agreement includes a confidentiality provision prohibiting either party from disclosing the terms of the settlement, including the settlement amount, to any third party, except as required by law, regulation, or court order, or to the parties' respective officers, directors, employees, accountants, auditors, lenders, insurers, and professional advisors who have a need to know and who agree to be bound by the confidentiality obligation.

Non-Disparagement: Both parties agreed to a mutual non-disparagement provision prohibiting either party from making any disparaging, defamatory, or derogatory statements regarding the other party, its officers, directors, employees, or agents in connection with the underlying dispute or the settlement.

No Admission of Liability: The Settlement Agreement expressly provides that it does not constitute an admission of liability, wrongdoing, or fault by either party, and that neither party may use the settlement or any of its terms as evidence of liability in any other proceeding.

Late-Payment Provision: In the event of a default in payment by Ridgeway, the Settlement Agreement provides for interest on any unpaid amount at the rate of 1.5% per month (18% per annum). In addition, if Ridgeway fails to cure a payment default within ten (10) business days after receiving written notice of default from CPS, the Settlement Agreement provides for a consent judgment mechanism in the 342nd Judicial District Court of Tarrant County, Texas, in the amount of the unpaid balance plus accrued interest, together with CPS's reasonable attorneys' fees and costs incurred in enforcement.

B. Dismissal. Consistent with the terms of the Settlement Agreement, an Agreed Order of Dismissal with Prejudice was filed with the 342nd Judicial District Court of Tarrant County, Texas, on December 14, 2021, in Cause No. 342-2021-04871-TX. The Agreed Order of Dismissal disposes of all claims asserted by CPS against Ridgeway, including the claims for breach of contract, money had and received, common-law fraud, and unjust enrichment, as well as all counterclaims asserted by Ridgeway against CPS, including the counterclaim for breach of contract based on alleged early termination of the MTSA.

The Agreed Order of Dismissal constitutes a final, appealable order disposing of all claims asserted by all parties in the proceeding. Each party bears its own costs and attorneys' fees, except as otherwise provided in the Settlement Agreement and Mutual Release. The thirty-day deadline for filing a motion for new trial or a notice of appeal under the Texas Rules of Civil Procedure will expire in mid-January 2022, but no post-judgment motions or appeals are anticipated given the consensual nature of the dismissal.

IV. FINANCIAL SUMMARY

A. Recovery. The following table summarizes CPS's gross recovery under the Settlement Agreement:

For context, the total documented overcharges by Ridgeway during the 26-month overbilling period were $1,847,632.19. The overcharges were categorized as follows based on the forensic analysis conducted by Meridian Forensic Accounting Group LLC:

Inflated Per-Mile Rates: $1,104,891.53. This category represented the largest component of the overcharges. Of the 9,843 invoices submitted by Ridgeway during the overbilling period, 4,217 invoices (approximately 42.8%) contained per-mile rates that were 8% to 12% above the rates set forth in Exhibit B to the MTSA. The inflated rates were applied systematically across the majority of CPS's shipping lanes, and the internal emails produced by Ridgeway in discovery confirmed that the rate inflation was directed by James Whitford, Vice President of Pricing & Rate Management.

Improper Fuel Surcharge Calculation: $387,412.66. Under Exhibit C to the MTSA, fuel surcharges were to be calculated based on the U.S. Department of Energy's weekly retail diesel price index for the same week in which the shipment was transported. Ridgeway instead applied a 7-day lagging DOE index, which during a period of rising fuel prices consistently yielded a higher surcharge figure. The systematic use of the incorrect index resulted in overcharges totaling $387,412.66 across the overbilling period.

Unauthorized Accessorial Charges: $241,008.00. Ridgeway imposed various accessorial charges — including liftgate fees, detention charges, and re-delivery fees — on CPS invoices without the supporting documentation required under the MTSA. In many instances, the accessorial services for which charges were imposed were never actually performed. The MTSA required that all accessorial charges be supported by signed delivery receipts or other documentation evidencing the actual provision of the accessorial service.

Duplicate Invoices: $114,320.00. A total of 83 invoices were billed and paid twice. In some instances, the duplicate invoices contained slightly altered invoice numbers or dates, which made detection through CPS's standard accounts payable processes more difficult.

In total, Ridgeway invoiced CPS $12,318,209.46 during the overbilling period. The correct amount payable under the terms of the MTSA was $10,470,577.27, yielding an approximate overbilling rate of 15.0%.

B. Costs. The total costs incurred by CPS in connection with the matter are summarized in the following table:

A 10% courtesy discount was applied to all Calderwood & Harkness attorney fees throughout the engagement in recognition of this being the Firm's inaugural engagement for CPS. The discount was agreed upon in the engagement letter dated June 1, 2021, and was applied consistently to all invoices issued during the matter. The forensic accounting engagement with Meridian Forensic Accounting Group LLC was managed under the direction of Nathan Crowley, CPA, CFF, Meridian's engagement partner, who oversaw all aspects of the forensic invoice analysis and provided expert consultation throughout the matter.

C. Net Recovery

D. Recovery as Percentage of Claimed Overcharges

The following metrics summarize CPS's recovery relative to the total documented overcharges:

Gross Recovery Rate: $1,575,000.00 ÷ $1,847,632.19 = 85.2%

Net Recovery Rate: $1,233,020.50 ÷ $1,847,632.19 = 66.7%

These recovery percentages are highly favorable in the context of commercial overbilling litigation. A gross recovery rate of 85.2% compares favorably to industry benchmarks for freight overbilling disputes, where pre-trial settlements typically range from 50% to 75% of the documented overcharges. The strong recovery was driven in large part by the quality of CPS's forensic evidence, the impact of the Whitford emails produced in discovery, and the resulting leverage that CPS brought to the mediation table.

V. HOURS SUMMARY

The following table sets forth the hours billed and fees charged by each attorney who worked on the matter, reflecting the 10% courtesy discount applied to all attorney fees:

¹ A minor rounding adjustment was applied at the final invoice level to yield a billed total of $287,437.50 for the matter. Specifically, the Espinoza hours were billed at 243.333 hours at the detail level on the final invoice to account for the $1.00 rounding variance. This adjustment was reflected on Invoice No. SC-0487-F dated December 15, 2021.

The staffing model for this matter reflected an efficient allocation of attorney resources. Partner-level work by Francesca Morano and Samuel Eklund focused on case strategy, key client communications, the mediation session, settlement negotiations, and oversight of the discovery and motion practice. Associate-level work by Yuki Nakamura and Carlos Espinoza encompassed the substantial volume of document review, forensic analysis coordination, discovery preparation and responses, motion drafting, and day-to-day case management. The Firm's Houston office resources, including Mr. Eklund and Ms. Nakamura, were particularly valuable given the Texas forum, and their familiarity with Tarrant County practice facilitated the efficient prosecution of the matter.

An evergreen retainer of $75,000.00 was received from CPS at the commencement of the engagement and was applied against invoices issued throughout the matter in accordance with the terms of the engagement letter. The retainer balance as of the date of the final invoice is $12,382.50, which is being applied against the final invoice as described in Section VIII below.

VI. LITIGATION TIMELINE

The following is a chronological summary of all key events in the matter, organized by phase:

Pre-Engagement Phase.

April 15, 2019: The Master Transportation Services Agreement ("MTSA") between CPS and Ridgeway became effective. The MTSA had a three-year term running through April 14, 2022, and governed all freight transportation services provided by Ridgeway for CPS's shipping operations across its five facilities in Ohio, Indiana, and Texas. The MTSA included detailed rate schedules (Exhibit B), a fuel surcharge formula (Exhibit C), and provisions governing accessorial charges, invoicing, dispute resolution, and termination.

February 2019: Beginning of the overbilling period. Ridgeway began submitting invoices to CPS containing inflated per-mile rates, improper fuel surcharge calculations, unauthorized accessorial charges, and, in certain instances, duplicate billings. This pattern continued for approximately 26 months.

October 2020: Patricia Sung, CPS's Vice President of Supply Chain & Logistics, flagged rate discrepancies during the company's third-quarter 2020 budget review. Ms. Sung identified that CPS's actual freight costs were significantly exceeding the budgeted amounts based on the MTSA's contractual rate schedule, and she raised these discrepancies with Dennis Yurkovich (CFO) and Harold Inman (General Counsel).

November 12, 2020: CPS's internal audit team, under the direction of Mr. Yurkovich and Mr. Inman, commenced a systematic invoice-by-invoice review of all Ridgeway invoices submitted since the inception of the MTSA. The internal review involved reconciliation of each invoice against the applicable rate schedule, fuel surcharge formula, and supporting documentation requirements.

January 29, 2021: CPS's internal invoice review was completed. The internal audit identified approximately $1,412,088.74 in overcharges (an initial estimate that was later refined upward to $1,847,632.19 following the independent forensic analysis by Meridian Forensic Accounting Group LLC). Based on the findings of the internal review, Mr. Yurkovich authorized the initiation of a formal dispute with Ridgeway under the MTSA's dispute resolution provisions.

February 8, 2021: Harold Inman, acting as CPS's General Counsel, sent a written dispute notice to Ridgeway pursuant to MTSA Section 11.2 (Dispute Resolution). The notice identified the overcharge categories and quantified the then-estimated overcharges at $1,412,088.74. The notice demanded that Ridgeway cure the overbilling, issue credits or refunds for all overcharges, and confirm its commitment to billing in accordance with the MTSA going forward. The notice triggered the 30-day good-faith resolution period specified in Section 11.2.

February 10, 2021: Ridgeway acknowledged receipt of CPS's dispute notice through Brenda Novotny, Chief Operating Officer. Ms. Novotny's acknowledgment was brief and did not address the substance of CPS's claims.

March 12, 2021: The 30-day good-faith resolution period under MTSA Section 11.2 expired without a satisfactory resolution. In lieu of a substantive response to CPS's overcharge claims, Ridgeway offered a "goodwill adjustment" of $218,500.00, representing less than 16% of CPS's initial overcharge estimate. Ridgeway denied any systematic overbilling and attributed the discrepancies to "routine rate adjustments" and "industry-standard fuel surcharge practices."

March 15, 2021: CPS, through Harold Inman, formally rejected Ridgeway's $218,500.00 "goodwill adjustment" offer as wholly inadequate. Mr. Inman communicated CPS's rejection in writing and reiterated the company's demand for full reimbursement of all documented overcharges.

March 22, 2021: CPS issued a 30-day written termination notice to Ridgeway under MTSA Section 9.2 (Termination for Cause), citing Ridgeway's material breach of the MTSA through systematic overbilling and its failure to cure the breach during the dispute resolution period.

March 2021: End of the overbilling period. Ridgeway's final invoices to CPS were submitted in March 2021 prior to the termination of the MTSA. In total, the overbilling period spanned approximately 26 months, from February 2019 through March 2021.

April 22, 2021: The 30-day termination notice period expired, and the MTSA was terminated effective as of this date. CPS transitioned its freight operations to Redfield Logistics Corp., headquartered in Indianapolis, Indiana, which assumed responsibility for CPS's truckload shipping requirements on an interim basis while CPS conducted a comprehensive request-for-proposal process for a long-term freight services provider.

Engagement and Pre-Suit Phase

May 14, 2021: Harold Inman, CPS's General Counsel, first contacted Francesca Morano at Calderwood & Harkness LLP regarding the Ridgeway dispute. Mr. Inman was referred to Ms. Morano by Gerald Fleischmann, Managing Partner of Pinnacle Ridge Capital Partners LP, CPS's private equity sponsor. Mr. Fleischmann had previously worked with the Firm on portfolio company matters and recommended Calderwood & Harkness based on the Firm's experience in complex commercial litigation and supply chain disputes.

May 21, 2021: Francesca Morano and Samuel Eklund traveled to CPS's headquarters in Dayton, Ohio, and met with CPS's leadership team, including Margaret "Meg" Ashford (CEO & President), Dennis Yurkovich (CFO), Patricia Sung (VP Supply Chain & Logistics), and Harold Inman (General Counsel). The meeting covered the history of the dispute, CPS's internal audit findings, the pre-litigation correspondence with Ridgeway, the termination of the MTSA, and CPS's litigation objectives. The CPS team provided the engagement team with access to the MTSA, all Ridgeway invoices, CPS's internal audit workpapers, and the pre-litigation correspondence.

June 1, 2021: The engagement letter between Calderwood & Harkness LLP and Crestline Packaging Solutions LLC was fully executed. The matter was opened in the Firm's matter management system as Matter No. 1006-00005. The engagement letter set forth the scope of the engagement, the applicable billing rates (subject to the 10% courtesy discount), the $75,000.00 evergreen retainer, and the terms and conditions of the Firm's representation.

June 10, 2021: Yuki Nakamura and Carlos Espinoza completed the Initial Case Assessment Memorandum, which analyzed the strength of CPS's claims, the potential counterclaims and defenses, the applicable statute of limitations, the forum and venue considerations, the potential range of recovery, and the recommended litigation strategy. The memorandum was reviewed and approved by Ms. Morano and Mr. Eklund and was shared with CPS's leadership team.

June 18, 2021: A pre-suit demand letter was sent to Raymond "Ray" Calder, Founder and Chief Executive Officer of Ridgeway, on behalf of CPS. The demand letter set forth the factual basis for CPS's claims, quantified the total overcharges at $1,847,632.19, demanded payment of the overcharges together with contractual interest of $221,715.86 (calculated at the MTSA's contractual interest rate from the date of each overpayment), for a total demand of $2,069,348.05. The demand letter required payment within fourteen (14) days and advised that CPS would initiate litigation if Ridgeway failed to make satisfactory arrangements for payment within the specified period.

Litigation Phase.

July 2, 2021: Ridgeway, through its counsel Marcus T. Hogue of Bartlett, Hogue & Sinclair LLP, formally rejected CPS's pre-suit demand. Mr. Hogue's response asserted that the MTSA's rate schedule had been orally modified by agreement of the parties through a course of dealing and that CPS had waived any objection to the rates by paying the invoices without protest for over two years. The response did not address the fuel surcharge, accessorial charge, or duplicate invoice categories.

July 19, 2021: CPS's Original Petition was filed in the 342nd Judicial District Court of Tarrant County, Texas, and was assigned Cause No. 342-2021-04871-TX. The Petition asserted causes of action for breach of contract, money had and received, common-law fraud, and unjust enrichment. The Petition sought recovery of $1,847,632.19 in overcharges, plus prejudgment and post-judgment interest, attorneys' fees and costs, and exemplary damages based on the fraud claim. Venue in Tarrant County was proper under the MTSA's forum selection clause.

August 5, 2021: Ridgeway, through Bartlett, Hogue & Sinclair LLP, filed its Original Answer and Counterclaim. The Answer included a general denial as well as the following affirmative defenses: oral modification, waiver, estoppel, and statute of limitations. The Counterclaim alleged that CPS's early termination of the MTSA constituted a breach of contract, and Ridgeway claimed $340,000 in lost profits for the remaining term of the MTSA from the termination date through the original expiration date of April 14, 2022.

August 20, 2021: Meridian Forensic Accounting Group LLC was retained as CPS's forensic accounting consultant and potential expert witness. The engagement letter was signed by Francesca Morano on behalf of Calderwood & Harkness LLP (acting as agent for CPS) and by Nathan Crowley, CPA, CFF, Meridian's engagement partner. Meridian was retained to conduct an independent invoice-by-invoice forensic analysis of all Ridgeway invoices, verify and quantify the overcharges, and prepare a report suitable for use in litigation and mediation.

September 10, 2021: Meridian Forensic Accounting Group LLC completed its forensic invoice analysis and delivered its report to Calderwood & Harkness. The Meridian report confirmed the total overcharge figure at $1,847,632.19 across all four categories, representing an upward revision from CPS's initial internal estimate of $1,412,088.74. The increase was attributable primarily to additional inflated per-mile rate instances and fuel surcharge discrepancies that CPS's internal audit team had not fully captured. The Meridian report provided detailed, invoice-level documentation of each overcharge.

September 15, 2021: CPS served its First Set of Interrogatories (8 interrogatories) and Requests for Production (12 requests) on Ridgeway. The discovery requests targeted Ridgeway's rate files, internal communications regarding CPS pricing, fuel surcharge calculation methodology and supporting data, accessorial charge documentation, billing system records, and financial records relating to the Ridgeway-CPS account.

October 4, 2021: Ridgeway served its responses to CPS's First Set of Interrogatories and Requests for Production. The responses consisted largely of boilerplate objections asserting overbreadth, undue burden, and vagueness. The document production was materially incomplete, with Ridgeway withholding or failing to produce significant categories of responsive documents, including internal communications, rate files, and billing system records.

October 8, 2021: Pursuant to the Texas Rules of Civil Procedure and the Court's scheduling order, counsel for CPS (Yuki Nakamura) conferred in good faith with counsel for Ridgeway (Reyna Villarreal) regarding the deficiencies in Ridgeway's discovery responses. CPS identified the specific categories of documents that had not been produced and requested that Ridgeway supplement its responses within a reasonable time.

October 12, 2021: Marcus T. Hogue, on behalf of Ridgeway, declined to supplement Ridgeway's discovery responses, reiterating the objections asserted in the original responses and characterizing CPS's requests as an improper "fishing expedition."

October 15, 2021: Calderwood & Harkness filed CPS's Motion to Compel discovery in the 342nd Judicial District Court. The Motion detailed Ridgeway's deficient responses, demonstrated the relevance and proportionality of each discovery request, and certified the good-faith conferral efforts that had been undertaken pursuant to the Texas Rules of Civil Procedure.

October 28, 2021: The Court granted CPS's Motion to Compel. The Court overruled Ridgeway's boilerplate objections and ordered Ridgeway to produce complete billing records, internal communications, rate files, fuel surcharge calculation data, accessorial charge documentation, and billing system records within fourteen (14) days of the date of the order. The Court's ruling was a significant procedural victory that set the stage for the critical discovery production that followed.

Resolution Phase.

November 11, 2021: In compliance with the Court's order on CPS's Motion to Compel, Ridgeway produced supplemental documents. The supplemental production included, among other materials, internal emails from James Whitford, Ridgeway's Vice President of Pricing & Rate Management. These emails, which are discussed in detail in Section VII below, revealed that Whitford had directed his rate analysts to apply rates exceeding the MTSA's Exhibit B schedule to CPS's invoices without CPS's knowledge or consent. The Whitford emails fundamentally altered the dynamics of the case.

November 18, 2021: A full-day mediation was conducted at the Lone Star Dispute Resolution Center, 300 Throckmorton Street, Suite 1200, Fort Worth, Texas 76102. The mediation was facilitated by Judge (Ret.) Constance Farr. After a full day of negotiations, the parties reached a settlement in principle at $1,575,000.00, with Ridgeway also agreeing to withdraw its $340,000 counterclaim with prejudice. The settlement terms are described in full in Section III.A above.

December 3, 2021: The Settlement Agreement and Mutual Release was fully executed by Margaret "Meg" Ashford on behalf of CPS and by Raymond "Ray" Calder on behalf of Ridgeway. The Settlement Agreement was approved as to form by Francesca Morano of Calderwood & Harkness LLP and Marcus T. Hogue of Bartlett, Hogue & Sinclair LLP.

December 10, 2021: The first installment of $1,000,000.00 was received by CPS via wire transfer to CPS's designated account at First Buckeye National Bank, Columbus, Ohio, twenty-three days ahead of the contractual deadline of January 2, 2022.

December 14, 2021: The Agreed Order of Dismissal with Prejudice was filed in Cause No. 342-2021-04871-TX in the 342nd Judicial District Court of Tarrant County, Texas, dismissing all claims and counterclaims with prejudice and disposing of all parties.

December 17, 2021: This matter is closed with a status designation of closed_completed as of this date.

March 3, 2022 (future date): The second installment of $575,000.00 is due within ninety (90) days of the December 3, 2021 execution date of the Settlement Agreement. This is the sole remaining open obligation under the Settlement Agreement and is being monitored by the engagement team as described in Section VIII below.

VII. KEY TURNING POINTS

The following narrative discussion identifies and analyzes the four pivotal developments that shaped the trajectory and outcome of this matter.

1. Meridian Forensic Report (September 10, 2021)

The engagement of Meridian Forensic Accounting Group LLC and the completion of its forensic invoice analysis proved to be a foundational element of CPS's litigation strategy. Nathan Crowley, CPA, CFF, Meridian's engagement partner, led a team that conducted an invoice-by-invoice reconciliation of all 9,843 Ridgeway invoices submitted during the overbilling period against the MTSA's Exhibit B rate schedule, Exhibit C fuel surcharge formula, and the contractual requirements for accessorial charges and billing practices.

The Meridian report confirmed the total overcharges at $1,847,632.19, quantified with precision across all four overcharge categories: inflated per-mile rates ($1,104,891.53), improper fuel surcharge calculations ($387,412.66), unauthorized accessorial charges ($241,008.00), and duplicate invoices ($114,320.00). Critically, the Meridian analysis elevated the overcharge figure from CPS's initial internal estimate of $1,412,088.74 to the final verified amount of $1,847,632.19 — an increase of $435,543.45, or approximately 30.8%. The additional overcharges identified by Meridian were primarily attributable to inflated per-mile rate instances and fuel surcharge discrepancies that CPS's internal audit team, while thorough, had not fully captured due to the complexity of the rate schedule and the volume of invoices involved.

Beyond the quantification of overcharges, the Meridian report served the critical function of converting CPS's internal audit findings into an independent, expert-supported claim suitable for both litigation and mediation. The report's detailed, invoice-level documentation of each overcharge — cross-referenced to the specific MTSA provision that had been violated — provided a powerful evidentiary foundation that lent credibility to CPS's claims and made it considerably more difficult for Ridgeway to dispute the overcharge figures. Total fees for the Meridian engagement were $48,200.00, an investment that proved exceptionally cost-effective relative to the recovery achieved.

2. Court's Order on Motion to Compel (October 28, 2021)

The Court's order granting CPS's Motion to Compel discovery was a pivotal procedural milestone that broke through the discovery impasse created by Ridgeway's obstructive tactics. From the outset of the discovery phase, Ridgeway had adopted a strategy of stonewalling on the most critical categories of discovery — including its internal rate files, communications regarding CPS pricing, fuel surcharge calculation data and methodology, accessorial charge documentation, and billing system records. Ridgeway's responses to CPS's First Set of Interrogatories and Requests for Production consisted largely of boilerplate objections asserting overbreadth, undue burden, and vagueness, accompanied by a materially incomplete document production.

After CPS's good-faith conferral efforts on October 8 failed to produce supplementation — with Marcus T. Hogue declining on October 12 to supplement Ridgeway's responses — Calderwood & Harkness filed the Motion to Compel on October 15. The Court heard the motion and, on October 28, ruled decisively in CPS's favor, overruling Ridgeway's objections and ordering the production of complete responsive documents within fourteen days.

The Court's order served multiple strategic purposes. First, it compelled the production of documents that proved devastating to Ridgeway's defense, as discussed in the following section. Second, it sent a clear signal to Ridgeway and its counsel that the Court would not tolerate obstructive discovery tactics, thereby establishing a more favorable litigation environment for CPS going forward. Third, it demonstrated to Ridgeway the Court's engagement with the merits of the dispute, which likely factored into Ridgeway's willingness to negotiate meaningfully at mediation.

3. Whitford Emails (November 11, 2021)

The single most significant development in the entire matter was the production, on November 11, 2021, of internal emails from James Whitford, Ridgeway's Vice President of Pricing & Rate Management. These emails were produced as part of Ridgeway's supplemental document production pursuant to the Court's October 28 order on CPS's Motion to Compel. Their contents were extraordinary and transformed the dynamics of the case overnight.

The Whitford emails, dating from June 2019 through October 2020, revealed that Whitford had directed his subordinate rate analysts to apply rates exceeding the MTSA's Exhibit B schedule to CPS's invoices, without CPS's knowledge or consent and without any contractual authorization. Two emails were particularly damning:

June 14, 2019 Email: In an email to members of his rate analyst team, Whitford wrote: "Go ahead and bump the CPS lanes to the standard book rate. They're not watching and the margin on this account is too thin at contract rates." This email demonstrated that Whitford was aware that the rate increases exceeded the contractual rates, that the increases were being implemented without CPS's knowledge, and that the motivation was to improve Ridgeway's profit margins on the CPS account at CPS's expense.

October 2, 2020 Email: After CPS began raising questions about rate discrepancies in the fall of 2020, Whitford sent an internal email stating: "If Crestline pushes back, tell them it's a fuel surcharge adjustment. They won't dig into the math." This email demonstrated not only Whitford's awareness of the overbilling but also his intent to deceive CPS by attributing the rate discrepancies to fuel surcharge adjustments — a false and misleading characterization designed to discourage CPS from investigating further.

The Whitford emails had several cascading effects on the litigation:

First, the emails effectively destroyed Ridgeway's primary defense of oral modification. Ridgeway had asserted, through its Answer and through its counsel's pre-suit correspondence, that the rate schedule had been orally modified by agreement of the parties. The Whitford emails proved conclusively that the rate increases were unilateral, unauthorized, and deliberately concealed from CPS. There was no oral agreement; there was systematic fraud.

Second, the emails established the scienter element necessary for CPS's common-law fraud claim. Under Texas law, a fraud claim requires proof of a material misrepresentation made with knowledge of its falsity, or made recklessly without regard to its truth, with the intent that the other party rely on it. The Whitford emails provided clear evidence of intentional concealment and affirmative misrepresentation in connection with the inflated invoices.

Third, and perhaps most significantly from a litigation leverage standpoint, the fraud evidence exposed Ridgeway to exemplary damages. Under Texas Civil Practice and Remedies Code Section 41.008(b), exemplary damages for fraud may be awarded in an amount up to two times the amount of economic damages plus an amount equal to any noneconomic damages. With economic damages of $1,847,632.19, Ridgeway's potential exemplary damages exposure was approximately $3,695,264.38, bringing its total trial exposure to approximately $5,542,896.57 before accounting for contractual interest and attorneys' fees.

Fourth, the emails undercut the credibility of Ridgeway's counterclaim. Ridgeway's assertion that CPS had breached the MTSA by terminating early rang hollow in light of evidence that Ridgeway itself had been systematically defrauding CPS throughout the contract period. This evidence reinforced the strength of CPS's termination-for-cause defense and made it virtually certain that no jury would award lost profits to a party that had been caught defrauding its customer.

4. Mediation (November 18, 2021)

The full-day mediation on November 18, 2021, at the Lone Star Dispute Resolution Center in Fort Worth, Texas, represented the culmination of the engagement team's strategic efforts throughout the matter. With the Whitford emails in hand, CPS entered mediation in a position of overwhelming strength.

CPS's opening mediation demand was $2,097,632.19, consisting of the full overcharge amount of $1,847,632.19 plus $250,000 toward contractual interest and attorneys' fees. This demand was intentionally calibrated to anchor the negotiations at a level that reflected the strength of CPS's position while remaining within a range that could facilitate productive settlement discussions.

Ridgeway's total trial exposure was estimated at over $6.2 million, composed of the following elements: $1,847,632.19 in actual damages for the overcharges, approximately $3,695,264.38 in potential exemplary damages under Texas Civil Practice and Remedies Code Section 41.008(b), contractual interest, and attorneys' fees. This exposure analysis was communicated to Ridgeway and its counsel through the mediator during the course of the mediation.

Judge (Ret.) Constance Farr facilitated the session with her characteristic skill and effectiveness. The mediation proceeded through multiple rounds of proposals and counterproposals. Ridgeway's initial position reflected an attempt to minimize the impact of the Whitford emails, but it became evident during the course of the day that Ridgeway's counsel had assessed the emails' devastating impact and was advising a realistic settlement.

Settlement was reached at $1,575,000.00, a figure that represented 85.2% of the documented overcharges. This figure reflected Ridgeway's realistic assessment of its trial exposure in light of the Whitford emails, while accounting for the inherent litigation risks and collection considerations that attend any contested proceeding. Critically, Ridgeway also agreed to withdraw its $340,000 counterclaim with prejudice, eliminating any risk of an adverse judgment on the counterclaim and further demonstrating the comprehensive nature of CPS's victory.

The settlement outcome was an excellent result for CPS. The 85.2% gross recovery rate significantly exceeded the 50–75% range typical for pre-trial settlements in commercial overbilling cases. The elimination of the $340,000 counterclaim without any payment added further value. And the structured payment schedule, with its late-payment protections and consent judgment mechanism, provided CPS with strong enforcement tools in the event of any payment default.

VIII. OPEN ITEMS

The following items remain open or require continued monitoring following the closing of this matter:

1. Second Installment ($575,000.00)

The second and final installment of $575,000.00 under the Settlement Agreement is due by March 3, 2022, which is ninety (90) days from the December 3, 2021 execution date of the Settlement Agreement. A calendar reminder has been set for February 15, 2022 — approximately two weeks prior to the due date — to prompt a status check on receipt of the payment.

If the second installment is not received by March 3, 2022, the engagement team will promptly follow up with Harold Inman, CPS's General Counsel, to confirm the non-receipt and to discuss the appropriate enforcement steps. In the event of default, Section 1.2 of the Settlement Agreement provides the following remedies:

(a) Interest at the rate of 1.5% per month (18% per annum) on the unpaid balance, accruing from the date of default;

(b) A consent judgment mechanism in the 342nd Judicial District Court of Tarrant County, Texas, exercisable upon Ridgeway's failure to cure the default within ten (10) business days after receiving written notice of default from CPS; and

(c) Recovery of CPS's reasonable attorneys' fees and costs incurred in connection with enforcement of the Settlement Agreement.

Should enforcement become necessary, the matter would be reopened under a new or related matter number, and the engagement team would proceed in accordance with CPS's instructions. However, based on Ridgeway's prompt payment of the first installment well ahead of the deadline, the engagement team does not anticipate any issues with the second installment.

2. Final Invoice

Calderwood & Harkness's final invoice for this matter is Invoice No. SC-0487-F, dated December 15, 2021, in the amount of $18,647.25. The invoice has been transmitted to Harold Inman at CPS. The remaining balance of CPS's evergreen retainer, in the amount of $12,382.50, will be applied against this invoice, leaving a remaining balance due of $6,264.75. This remaining balance is due net 30 from the date of the invoice, or approximately January 14, 2022. No issues are anticipated with respect to collection of the final invoice.

3. File Retention

Pursuant to the Firm's document retention policy, the matter file for 1006-00005 will be maintained for seven (7) years from the date of closing. The retention period therefore extends through December 17, 2028. All electronic files, including correspondence, pleadings, discovery materials, work product memoranda, the Meridian forensic report, the Settlement Agreement and Mutual Release, the Agreed Order of Dismissal, and all financial and billing records, are stored on the Firm's secure document management system and will remain accessible throughout the retention period. Any physical files associated with the matter, to the extent they exist, will be archived in accordance with the Firm's standard archival protocol and will be retrievable upon request during the retention period.

IX. CLIENT RELATIONSHIP

This matter represented Calderwood & Harkness's inaugural engagement for Crestline Packaging Solutions LLC, and it has established an excellent foundation for a long-term client relationship. The engagement was referred to the Firm by Gerald Fleischmann, Managing Partner of Pinnacle Ridge Capital Partners LP, CPS's private equity sponsor. Pinnacle Ridge Capital Partners LP is headquartered at 312 Vine Street, Suite 2000, Cincinnati, Ohio 45202, and acquired CPS in March 2018 for $412 million. Mr. Fleischmann's referral reflected his confidence in the Firm's capabilities in complex commercial litigation and his desire to connect one of Pinnacle Ridge's key portfolio companies with high-quality outside counsel.

CPS is a specialty packaging manufacturer and industrial chemical coatings company with significant operations and a substantial logistics footprint. CPS reported approximately $218.4 million in annual revenue for fiscal year 2020 and employs approximately 1,150 people across its operations. CPS ships approximately 14,000 truckloads per year from five manufacturing and distribution facilities located in Ohio, Indiana, and Texas, making freight transportation a critical and high-volume component of the company's cost structure. CPS's primary commercial lender is First Buckeye National Bank, located in Columbus, Ohio, with Andrea Kimball serving as the Relationship Manager for the CPS account.

Client satisfaction throughout this engagement has been high. Harold Inman, CPS's General Counsel, and Dennis Yurkovich, CPS's Chief Financial Officer, have each expressed their appreciation for the Firm's handling of the matter, including the quality of the legal analysis, the efficiency of the staffing model, the strategic approach to discovery and mediation, and the favorable settlement outcome. Both Mr. Inman and Mr. Yurkovich have indicated their interest in retaining Calderwood & Harkness for future supply chain and commercial litigation matters that may arise in connection with CPS's operations.

The following relationship development plans are in place to capitalize on the strong foundation established through this engagement:

Post-Matter Debrief: Francesca Morano has scheduled a post-matter debrief and relationship development meeting with CPS's leadership team in January 2022. The meeting is intended to review the lessons learned from the Ridgeway dispute, discuss CPS's broader legal needs, and explore opportunities for the Firm to provide ongoing counsel to CPS in areas such as commercial contracts, supply chain risk management, and dispute resolution.

Texas Regulatory and Compliance Work: Samuel Eklund will coordinate with the Firm's Houston office regarding potential regulatory and compliance work for CPS's Texas manufacturing operations. CPS's facilities in Texas may generate regulatory and compliance needs related to environmental, occupational safety, and transportation regulations that the Firm's Houston office is well-positioned to address.

Pinnacle Ridge Portfolio Company Referrals: CPS's position as a Pinnacle Ridge Capital Partners portfolio company creates significant potential for additional referrals from the PE sponsor. Gerald Fleischmann's satisfaction with the outcome of this matter, combined with the Firm's established relationship with Pinnacle Ridge, positions Calderwood & Harkness well to receive referrals for legal matters arising at other companies within the Pinnacle Ridge portfolio. Francesca Morano and the Firm's client development team will continue to cultivate this relationship.

X. CONCLUSION

Matter No. 1006-00005, Crestline Packaging Solutions LLC v. Ridgeway Freight Services Inc., Cause No. 342-2021-04871-TX, is hereby closed with a status designation of closed_completed as of December 17, 2021.

All substantive deliverables associated with the matter have been completed. The Agreed Order of Dismissal with Prejudice has been entered by the 342nd Judicial District Court of Tarrant County, Texas, disposing of all claims and counterclaims with prejudice. The Settlement Agreement and Mutual Release has been fully executed by both parties. The first settlement installment of $1,000,000.00 has been received by CPS.

The second and final settlement installment of $575,000.00 remains the only outstanding obligation under the Settlement Agreement and is due by March 3, 2022. This obligation is being actively tracked by the engagement team, with a calendar reminder set for February 15, 2022, and appropriate enforcement mechanisms available under the Settlement Agreement in the event of default.

The outcome of this matter was highly favorable for CPS. The gross settlement recovery of $1,575,000.00 represents 85.2% of the total documented overcharges, and the net recovery to CPS after all costs is $1,233,020.50, representing 66.7% of the total documented overcharges. Ridgeway's $340,000 counterclaim was withdrawn with prejudice at no cost to CPS. The matter was resolved in approximately 6.5 months from engagement to closing, and the total cost to CPS of $341,979.50 was well within the range projected at the outset of the engagement.

This memorandum, together with its supporting documentation in the matter file, constitutes the complete closing record for Matter No. 1006-00005.

Respectfully submitted,