1012-00005 · Stonefield Logistics Group · Discovery/Analysis

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work product doctrine, Fed. R. Civ. P. 26(b)(3). This memorandum also contains confidential attorney-client communications and is protected by the attorney-client privilege. Do not forward, copy, or distribute without the express authorization of the Responsible Partner.

CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166

May 14, 2023

MEMORANDUM

Matter No.: 1012-00005

To: Samuel Eklund, Responsible Partner, Litigation (General) Patrick Gallagher, Lead Associate, Litigation (General)

From: Simone Laroche, Working Associate, Litigation (General)

Re: Analysis of Key Document VHC-008417 — Sandra Milescu Email Dated November 12, 2021 Regarding Removal of Tractors from SLG Dedicated Lanes

I. Executive Summary

During the course of our initial review of Vantor Holdings Corp.'s ("Vantor") first document production — comprising 28,914 documents produced on April 28, 2023, bearing Bates range VHC-000001 through VHC-028914 — the review team identified a document of singular importance. The document, bearing Bates number VHC-008417, is an internal email from Sandra Milescu, Chief Operating Officer of Vantor Holdings Corp. and its operating subsidiary Vantor Transport Services LLC ("VTS"), to Nikolai Vantorovich, Chief Executive Officer and Founder of Vantor, dated November 12, 2021. The email concerns VTS's unilateral withdrawal of 85 tractors from lanes dedicated to our client, Stonefield Logistics Group Inc. ("Stonefield" or "SLG").

This memorandum sets forth the full text and context of VHC-008417, its significance across the primary liability and damages issues in this case, anticipated counterarguments, and recommendations for incorporating the document into our defense and counterclaim strategy.

Summary Conclusion. VHC-008417 constitutes compelling — and, in the estimation of the undersigned, potentially dispositive — evidence that VTS intentionally and unilaterally withdrew 85 tractors from Stonefield's dedicated lanes in or around October through November 2021, without providing any notification to Stonefield, directly causing the Q4 2021 service level failures that formed the basis of Stonefield's January 18, 2022 Cure Notice and Stonefield's subsequent March 4, 2022 termination of the Transportation Services Agreement ("TSA") for Cause under Section 13.1(a).

This document fundamentally undermines Vantor's core litigation narrative, as asserted in the Amended Complaint filed December 2, 2022, which contends that VTS's performance deficiencies during Q4 2021 were caused by: (i) a nationwide driver shortage attributable to macroeconomic and pandemic-related labor market disruptions; (ii) Stonefield's own failure to tender freight volumes sufficient to meet the Annual Committed Volume ("ACV") obligation of $43.2 million in Contract Years 2 and 3 (the "ACV shortfall" allegation); and (iii) Stonefield's alleged diversion of freight volume to competing carriers, specifically Cascade Freight Systems Inc. ("Cascade") and Briarwood Trucking Co. ("Briarwood"), in purported violation of the exclusivity provisions set forth in Schedule C to the TSA. The Milescu email contradicts each of these theories by demonstrating that the tractor withdrawal was a volitional, top-level corporate decision to redeploy assets to serve another customer, undertaken with full awareness that it would impair service to Stonefield and accompanied by a deliberate decision to conceal the withdrawal from Stonefield.

The email demonstrates an intentional, undisclosed material breach by VTS and provides substantial support for Stonefield's defenses of: (a) valid termination for Cause under Section 13.1(a) of the TSA; (b) the first-to-breach doctrine under New York law; (c) the equitable defense of unclean hands; and (d) contributory breach. It also materially weakens Vantor's damages case across all categories of claimed relief, which total $95.4 million in the aggregate.

Recommendation. VHC-008417 should be designated as a Tier 1 exhibit and treated as a centerpiece document in: (a) our summary judgment briefing, which is anticipated to be filed following the close of fact discovery; (b) the rebuttal expert analysis being prepared by Dr. Evelyn Rosser of Kensington Analytics Group LLC; and (c) any trial presentation. Further recommendations regarding discovery follow-up, deposition strategy, expert coordination, and client reporting are set forth in Section VIII below.

II. The Document — Full Text and Context

A. Document Identification

The key identifying information for VHC-008417 is as follows:

The email was identified during first-level document review conducted by the Calderwood & Harkness review team between May 1 and May 10, 2023. It was flagged as a "Hot Document" by contract reviewer Angela Watkins on May 4, 2023, and escalated to the working associate level for analysis on May 5, 2023. The undersigned has reviewed the document in its native format (Outlook .msg file) as well as the TIFF production image, and confirms that the metadata is consistent with the face of the document.

B. Key Language

The critical passage of VHC-008417, reproduced verbatim from the face of the document, reads as follows:

"We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January. I've already briefed the ops team — they're running the remaining units at max utilization but we'll see the numbers come down. We need to talk about whether to loop in Derek [Pruitt] on the SLG side or just let it ride."

Several aspects of this language warrant detailed discussion.

First, the phrase "We've pulled 85 tractors off the SLG dedicated lanes" establishes that the withdrawal was an affirmative, completed action taken by VTS management. The use of the past tense and the first-person plural pronoun indicates that Milescu personally participated in or directed the decision. The number "85" is specific and significant: the TSA required VTS to maintain minimum committed fleet capacity of 400 tractors dedicated to Stonefield freight, meaning the withdrawal of 85 tractors represents a reduction of approximately 21.25% of the committed fleet.

Second, the phrase "to cover [redacted] commitments" reveals the purpose of the withdrawal: to serve another, unidentified customer. The "[redacted]" portion as it appears in the production is a partial redaction that obscures what appears to be a customer or account name. This is not a privilege redaction (no privilege was asserted), and it is unclear whether the redaction was applied by Vantor prior to production or represents a redaction in the original document. We have raised this issue with Caldwell Royce in correspondence dated May 10, 2023, and have demanded production of an unredacted version. Additionally, Stonefield's Second Request for Production of Documents, served May 5, 2023, specifically targets fleet redeployment records and contracts with shippers to whom fleet was redirected during the October 2021 through March 2022 period. As of the date of this memorandum, the supplemental production has not been received; the Court ordered production on June 9, 2023, with a compliance deadline of June 30, 2023.

Third, the statement "SLG won't notice until January" is extraordinarily damaging to Vantor's position. It demonstrates three critical facts: (1) awareness on the part of VTS's senior management that the tractor withdrawal would have a material impact on service to Stonefield; (2) a deliberate decision to conceal the withdrawal from Stonefield rather than provide the notice that the TSA required; and (3) an expectation — indeed, a calculated prediction — that the impact would become visible to Stonefield only when Q4 2021 performance metrics were reviewed, which typically occurred in the first weeks of the following quarter. This language eviscerates any argument that the withdrawal was an innocent operational decision or that VTS believed it would not affect service levels.

Fourth, the reference to "let it ride" — i.e., whether to disclose the withdrawal to Derek Pruitt, VTS's Vice President of Business Development and the VTS executive responsible for the Stonefield account relationship — confirms that as of November 12, 2021, VTS had not yet disclosed the withdrawal to its own business development team, much less to Stonefield. The email reflects a deliberate internal discussion about whether to conceal the withdrawal. No subsequent document in the first production reflects any decision to disclose the withdrawal to Stonefield, and the February 14, 2022 cure response — authored by Pruitt himself — is silent on the topic, raising the inference that Pruitt either was never informed or was instructed to omit this information.

Finally, the email is from Sandra Milescu, VTS's most senior operations executive, to Nikolai Vantorovich, the company's Chief Executive Officer and sole controlling shareholder (holding approximately 58% of Vantor's equity). This establishes that the tractor withdrawal was a top-level corporate decision made by or with the knowledge of the company's two most senior officers — not an operational accident, a field-level mistake, or a decision made by mid-level logistics managers without executive awareness.

C. Timing and Chronological Context

The date of VHC-008417 — November 12, 2021 — is of critical importance. It falls squarely within Q4 2021, the quarter in which VTS's performance metrics collapsed across all five Service Level Obligations ("SLOs") under the TSA (Contract Reference No. SLG-VTS-2019-0315, dated March 15, 2019). Moreover, the email's use of the past tense ("We've pulled") indicates that the actual tractor withdrawal had already been completed as of November 12, 2021, suggesting the reassignment occurred in October 2021 at the latest — i.e., at or near the beginning of Q4 2021. This timing is critical because it means the tractor withdrawal preceded and causally explains the performance collapse that Vantor now attributes to other factors.

The following timeline situates VHC-008417 within the broader chronology of events leading to the TSA termination:

The chronological placement of VHC-008417 is particularly significant in relation to the September 22, 2021 Kirkwood email (produced as SLG-004218), which Vantor has emphasized in its pleadings as purported evidence that Stonefield was already planning to terminate VTS and divert volume to alternative carriers before the Q4 2021 performance failures materialized. The Kirkwood email, however, was written in response to performance concerns that were already manifesting — and, as VHC-008417 now reveals, those performance concerns were themselves caused or exacerbated by VTS's own decision to begin withdrawing fleet capacity. Any Stonefield decision to engage alternative carriers was reactive, not premeditated.

III. Analysis of Impact on Key Liability Issues

A. Demonstrates Material Breach by VTS — Failure to Maintain Committed Fleet Capacity

VHC-008417 provides direct evidence that VTS committed a material breach of its obligations under the TSA by failing to maintain the committed fleet capacity required to serve Stonefield's freight.

Contractual Requirements. Section 7.1 of the TSA requires VTS to "maintain and make available to SLG, at all times during the Term, a minimum fleet capacity of four hundred (400) Class 8 tractors and one thousand two hundred (1,200) dry van and refrigerated trailers dedicated to the transportation of SLG freight on the Dedicated Lanes and Secondary Lanes identified in Schedule C." Schedule B, Section 2(c) establishes the corresponding SLO for Equipment Availability at "not less than eighty-five percent (85%) of committed fleet capacity, measured on a monthly basis." Section 7.2 further provides that VTS "shall not reassign, redeploy, or otherwise remove equipment from the SLG Dedicated Fleet without the prior written consent of SLG, except in cases of scheduled maintenance, repair, or replacement with equivalent equipment."

Impact of the 85-Tractor Withdrawal. The removal of 85 tractors from SLG dedicated lanes reduced VTS's available fleet from the committed level of approximately 400 tractors to approximately 315 tractors (or lower, if additional tractors were already unavailable due to maintenance or other factors). This represents approximately 78.75% of committed fleet capacity at best — well below the 85% SLO threshold. The actual Q4 2021 equipment availability data, as reflected in both Stonefield's January 18, 2022 Cure Notice and VTS's own reporting through the Carrier Performance Portal, showed only approximately 248 tractors available during Q4 2021, representing only 62% of committed fleet capacity. The 85-tractor withdrawal identified in VHC-008417 thus accounts for a substantial portion of the approximately 152-tractor deficit (85 of 152, or approximately 55.9% of the total shortfall).

Nature of the Breach. The withdrawal was unilateral, undisclosed, and deliberate. It was not the result of external market forces such as the driver shortage Vantor invokes, nor was it attributable to any conduct by Stonefield. It was an affirmative corporate decision to redeploy assets for VTS's own commercial benefit — to "cover [redacted] commitments" — at Stonefield's expense and without Stonefield's knowledge or consent. Section 7.2 of the TSA required prior written consent for any such redeployment, and no such consent was sought or obtained.

Moreover, TSA Section 7.4 required VTS to provide substitute equipment or surge capacity arrangements when any portion of the dedicated fleet was unavailable: "In the event that any equipment in the SLG Dedicated Fleet is unavailable for any reason, VTS shall promptly arrange for substitute equipment of equal or greater capacity, or shall engage qualified sub-haulers at VTS's cost, to ensure continuity of service at the applicable Service Level Obligations." VTS failed to provide substitute equipment, failed to engage sub-haulers, and concealed the withdrawal entirely from Stonefield.

The deliberate and undisclosed nature of this breach, combined with its magnitude (a 21.25% reduction in committed fleet capacity) and its direct causal connection to the Q4 2021 performance collapse, establishes that this was a material breach of the TSA — not a minor or technical default, but a fundamental failure to perform that went to the essence of the parties' agreement.

B. Undermines Vantor's Causation Theory

Vantor's Amended Complaint, filed December 2, 2022, advances three primary theories to explain VTS's Q4 2021 performance failures and to shift blame to Stonefield. VHC-008417 refutes each of these theories.

1. The ACV Shortfall Argument. Vantor alleges that Stonefield failed to tender the $43.2 million ACV in Contract Years 2 and 3, tendering only $31.8 million in CY2 and $36.5 million through January 2022 (ten months into CY3), and that these alleged shortfalls reduced VTS's revenue to a level that made it commercially infeasible to maintain the full committed fleet. This argument fails for multiple independent reasons, and VHC-008417 provides an additional — and powerful — basis for rejection.

The email does not reference any revenue shortfall from Stonefield as the reason for the tractor withdrawal. Milescu states that the tractors were pulled "to cover [redacted] commitments" — that is, to serve another customer's contractual obligations, not because Stonefield was providing insufficient freight. The withdrawal was an affirmative commercial decision to prioritize another revenue stream, not a defensive response to lost volume.

Furthermore, the CY2 ACV shortfall argument is factually unsupportable. Stonefield properly invoked force majeure under TSA Section 12.1 for the period April 6, 2020 through September 30, 2020, due to the COVID-19 pandemic and its effects on freight volumes industry-wide. Under the force majeure provision, the CY2 ACV was properly adjusted to $21.6 million (= $43.2 million × 6 non-force-majeure months / 12 months). Stonefield's actual CY2 tenders of $31.8 million exceeded the adjusted ACV minimum by $10.2 million — a 47.2% surplus. The CY3 shortfall alleged by Vantor ($43.2 million minus $36.5 million = $6.7 million) covers only the first ten months of CY3 (April 2021 through January 2022), prior to termination, and is therefore disputed as to appropriate prorating. The TSA does not require proportional monthly tendering; the ACV is an annual commitment measured at year-end.

2. The Volume Diversion Argument. Vantor alleges that Stonefield improperly diverted freight to Cascade Freight Systems Inc. and Briarwood Trucking Co. in violation of the exclusivity provisions set forth in Schedule C to the TSA. VHC-008417 undermines this argument by revealing the causal chain that led to Stonefield's use of alternative carriers.

As established in our analysis memorandum dated September 30, 2022, Stonefield's use of Cascade and Briarwood was limited to Lanes 8 through 14, which are classified as "Secondary Lanes" under Schedule C, Section 2(b). The exclusivity restrictions in Schedule C, Section 1(a) apply only to "Primary Dedicated Lanes" (Lanes 1 through 7). Secondary Lanes are subject to a different regime: under Schedule C, Section 2(b), VTS has a "right of first refusal" on Secondary Lane freight, but Stonefield retains the right to tender such freight to alternative carriers "in the event that VTS declines a tender or fails to provide timely confirmation of acceptance." The Q4 2021 data shows that VTS's tender acceptance rate on Secondary Lanes fell to 58.3%, far below the 90% SLO, creating ample contractual basis for Stonefield to engage alternative carriers on those lanes.

More fundamentally, VHC-008417 reveals that the performance failures that prompted Stonefield to seek alternative carriers on Secondary Lanes were themselves caused by VTS's own tractor withdrawal. The diversion of volume to Cascade and Briarwood was a response to VTS's tender rejections and service failures — the very failures now shown to have been the result of VTS's deliberate decision to strip 85 tractors from the Stonefield fleet. Vantor cannot simultaneously (a) withdraw fleet capacity without notice, causing tender rejections and service failures, and (b) complain that Stonefield turned to other carriers when VTS failed to perform.

3. The Driver Shortage Argument. Vantor attributes VTS's performance failures to an industry-wide driver shortage that was "beyond VTS's control and affected all carriers in the truckload segment." While it is true that the trucking industry experienced significant driver shortages during 2021, VHC-008417 demonstrates that VTS's particular performance collapse was not attributable to this external market condition. Rather, VTS made a deliberate commercial decision to redeploy dedicated assets to serve another customer. The email contains no reference to driver availability, driver recruitment challenges, or any inability to staff the dedicated fleet. The 85 tractors were not parked for lack of drivers — they were reassigned to cover another customer's commitments. This is a fundamentally different factual scenario from the force-majeure-type market disruption that Vantor's driver shortage theory presupposes.

C. Supports First-to-Breach Doctrine

Under well-established New York law, a party that commits the first material breach of a contract cannot recover damages for the other party's subsequent failure to perform. See Ashgrove & Co. v. Camberwell Industries, 500 F.3d 171, 186 (2d Cir. 2007) ("It is axiomatic that a party to a contract cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition."); RXR Acquisition Corp. v. Pier 92 Equity Partners, LLC, 2014 WL 3974319, at *7 (Sup. Ct. N.Y. Cnty. Aug. 14, 2014) (where one party commits the first material breach, the non-breaching party is excused from further performance). As discussed in our research memorandum dated March 15, 2023, the first-to-breach doctrine is a complete defense to Vantor's breach of contract claim if we can establish that VTS was the first party to commit a material breach of the TSA.

VHC-008417 provides powerful evidence that VTS was indeed the first to breach. VTS's unilateral withdrawal of 85 tractors from SLG dedicated lanes in October 2021 constitutes a material breach of VTS's fleet commitment obligations under TSA Section 7.1 and the Equipment Availability SLO. This breach predates any of the conduct that Vantor attributes to Stonefield as constituting a breach:

• CY3 volume shortfall: Vantor calculates the CY3 ACV shortfall based on the full April 2021 through March 2022 contract year, meaning any shortfall was not crystallized — and could not have been determined — until the end of CY3. As of October 2021, when VTS withdrew the tractors, CY3 was only six months old, and there was no basis to conclude that Stonefield would not meet the ACV. VTS's breach thus predates any cognizable Stonefield breach.

• Volume diversion: As discussed above, Stonefield's use of Cascade and Briarwood on Secondary Lanes was contractually permitted and was undertaken in response to VTS's own performance failures. The diversion did not commence until after the onset of VTS's tender rejections, which VHC-008417 now reveals were caused by VTS's fleet withdrawal.

• Termination: Stonefield's termination of the TSA on March 4, 2022, obviously postdates VTS's October 2021 breach by approximately five months.

The argument is thus straightforward: VTS committed the first material breach of the TSA by unilaterally withdrawing 85 tractors from the dedicated fleet in October 2021, in violation of TSA Sections 7.1, 7.2, and 7.4 and the Equipment Availability SLO. That breach predates and causally explains any performance by Stonefield that Vantor characterizes as a breach. Under the first-to-breach doctrine, VTS's prior material breach excuses Stonefield's subsequent performance and validates the termination for Cause.

D. Supports Unclean Hands Defense

The unclean hands defense is an equitable doctrine that bars a party from obtaining relief where that party has engaged in inequitable conduct directly related to the subject matter of the litigation. See Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814 (1945); National Distillers & Chemical Corp. v. Seyopp Corp., 17 N.Y.2d 12, 15-16 (1966). The doctrine applies where the party seeking relief has acted in bad faith, with fraudulent intent, or through other unconscionable means in connection with the transaction at issue.

VHC-008417 provides compelling evidence of inequitable conduct by Vantor. The deliberate concealment aspect of the email — embodied in the statement "SLG won't notice until January" — demonstrates that VTS's senior management knowingly hid a material breach from its contractual counterpart. The email reflects not merely a failure to disclose but an affirmative calculation of the timeline for concealment: Milescu predicted that Stonefield would discover the fleet reduction until January 2022, when Q4 2021 metrics would be reviewed. This was not an oversight — it was a strategy.

This concealment is directly relevant to Vantor's assertion that VTS "substantially cured" the identified deficiencies during the 30-day cure period following the January 18, 2022 Cure Notice. VTS's February 14, 2022 cure response, authored by Derek Pruitt, never disclosed the tractor withdrawal or the redeployment of fleet assets to another customer account. Instead, Pruitt attributed the performance failures to external factors (driver shortage, Stonefield volume shortfalls, and volume diversion) and asserted that VTS had taken corrective measures — while the root cause of the failures remained not only unaddressed but undisclosed. Under the equitable doctrine of unclean hands, Vantor should not be permitted to recover damages for a termination that was proximately caused by Vantor's own intentional and concealed breach.

E. Impact on Vantor's Claim That Termination Was Pretextual

Vantor's Amended Complaint devotes considerable attention to the allegation that Stonefield's termination of the TSA was pretextual — that is, that Stonefield manufactured the Q4 2021 performance concerns as a pretext to escape the TSA in advance of the April 2022 rate adjustment under Section 5.3. The Rate Adjustment Mechanism in Section 5.3 would have increased per-mile rates from a weighted average of $2.87 to $3.28, representing a 14.3% increase and projected to add approximately $6.2 million in annual transportation costs to Stonefield's budget. Vantor contends that Stonefield was motivated by cost avoidance rather than genuine performance concerns.

VHC-008417 substantially neutralizes this pretext argument. The email demonstrates that Stonefield had genuine, objective grounds for termination: VTS's Q4 2021 performance failures were real, quantifiable, and documented across all five SLOs. More importantly, those failures were not manufactured by Stonefield — they were caused by VTS's own deliberate decision to withdraw fleet capacity. Stonefield did not need to fabricate performance deficiencies; VTS created them unilaterally and then concealed the cause.

Even assuming, arguendo, that Stonefield was aware of and partially motivated by the upcoming rate adjustment, under New York law the existence of mixed motives does not invalidate a termination for Cause where objective contractual grounds for termination are satisfied. See Bramwell & Co. v. Herald Sq. Loft Corp., 67 A.D.2d 442, 446 (1st Dep't 1979) (a party exercising a contractual right need not demonstrate pure motives if the contractual conditions for exercise of that right are met); see also our research memorandum dated October 7, 2022, analyzing the mixed-motive question under New York contract law. TSA Section 13.1(a) provides that Stonefield may terminate for Cause upon a "material failure by VTS to perform its obligations under this Agreement, including failure to maintain Service Level Obligations as set forth in Schedule B, which failure is not cured within thirty (30) days of written notice." The Q4 2021 SLO failures are undisputed; VTS itself acknowledged "operational challenges" in its cure response. The contractual conditions for termination were satisfied regardless of any additional motivations Stonefield may have had.

VHC-008417 thus shifts the narrative from "Stonefield manufactured a pretext to avoid rate increases" to "VTS secretly sabotaged its own performance, concealed the sabotage, and then blamed Stonefield when the consequences materialized."

IV. Analysis of Vantor's February 14, 2022 Cure Response in Light of VHC-008417

The VTS cure response dated February 14, 2022 — from Derek Pruitt (VP, Business Development, VTS) to Janet Kirkwood (VP, Carrier Relations, Stonefield) — assumes particular significance when read in conjunction with VHC-008417. The cure response, produced as VHC-003812, is a three-page letter that acknowledged "operational challenges during the fourth quarter of 2021" and addressed each of the five SLO failures identified in Stonefield's January 18, 2022 Cure Notice. The cure response:

• Attributed the performance failures to external factors: Specifically, (i) a "nationwide shortage of qualified commercial drivers affecting all carriers in the TL segment," (ii) "SLG's failure to meet Annual Committed Volume obligations, which reduced the revenue base supporting VTS's SLG-dedicated operations," and (iii) "SLG's instructions to VTS to decline tenders on certain lanes, combined with SLG's diversion of volume to spot market and competitive carriers, which disrupted VTS's lane optimization and equipment utilization planning."

• Asserted that VTS had "substantially cured" the identified deficiencies: Pruitt stated that VTS had "implemented a comprehensive corrective action plan including accelerated driver recruitment, enhanced maintenance scheduling to improve equipment availability, and optimization of dispatch routing on SLG Primary and Secondary Lanes."

• Disputed the cargo claims data: Pruitt challenged Stonefield's calculation of the cargo claims ratio, arguing that two of the 16 claims (totaling $48,200) were attributable to shipper packing deficiencies rather than carrier handling and should be excluded from the ratio calculation.

• Critically, made no mention whatsoever of the tractor withdrawal or the redeployment of 85 tractors to the [redacted] customer account.

VHC-008417 reveals that the cure response was, at best, materially misleading and, at worst, a document that fraudulently concealed the primary cause of the service failures. The cure response attributed VTS's performance collapse to external market forces and Stonefield's own conduct, when VTS's senior management knew — and had known since at least October 2021 — that the principal cause was VTS's own voluntary withdrawal of 21.25% of the dedicated fleet.

This has three important implications:

First, it strengthens the argument that VTS did not, in fact, cure the breaches within the 30-day cure period. The cure period ran from January 18, 2022 (date of the Cure Notice) through February 17, 2022. To "cure" the identified deficiencies, VTS would have needed to address the root cause of the SLO failures — which was the fleet reduction. VTS's cure response did not mention the fleet reduction, did not indicate that the 85 tractors had been returned to SLG dedicated lanes, and did not propose any timeline for restoring the committed fleet capacity. A cure that does not address the underlying breach is no cure at all.

Second, post-cure-period performance data confirms that no genuine cure occurred. Stonefield's internal operations data for March 2022 — the month immediately following the expiration of the cure period — showed continued SLO failures: On-Time Pick-Up at 73.8% (SLO: ≥92%); On-Time Delivery at 70.2% (SLO: ≥90%); Equipment Availability at 64.1% (SLO: ≥85%). These figures represent only marginal improvement over Q4 2021 levels and remain far below SLO thresholds. The persistence of these failures is consistent with the hypothesis that the 85 tractors were never returned to the Stonefield fleet.

Third, the cure response's silence about the tractor withdrawal, combined with VHC-008417's evidence that VTS's COO was aware of the withdrawal and its expected impact, suggests that VTS's cure response was not a good-faith effort to address the identified deficiencies but rather a strategic document designed to run out the cure clock while maintaining the fiction that external factors were to blame. This bolsters both the unclean hands defense and the argument that Stonefield's termination for Cause was justified.

V. Implications for Damages Analysis

Vantor's Amended Complaint asserts total damages of approximately $95.4 million across four categories. VHC-008417 has significant implications for each.

A. Impact on Liquidated Damages Claim ($67.23M)

Vantor's primary damages claim is for liquidated damages under TSA Section 14.2. That section provides that "in the event SLG terminates this Agreement other than 'for Cause' as defined in Section 13.1(a), SLG shall pay to VTS liquidated damages in an amount equal to seventy-five percent (75%) of the Annual Committed Volume for each full Contract Year remaining in the Term, plus a pro rata amount for any partial Contract Year." The key operative phrase is "other than 'for Cause'" — liquidated damages are payable only if Stonefield's termination was not a valid termination for Cause.

Vantor calculates its liquidated damages claim as follows:

If Stonefield's termination was a valid termination for Cause under Section 13.1(a), Vantor is not entitled to any liquidated damages under Section 14.2. This is a binary outcome: either the termination was for Cause and liquidated damages are zero, or it was not for Cause and liquidated damages are $67.23 million. VHC-008417 materially strengthens the argument that the termination was for Cause, by demonstrating that the Q4 2021 SLO failures that triggered the Cure Notice were genuine, were caused by VTS's own conduct, and were not cured within the cure period. This substantially reduces the expected value of Vantor's liquidated damages claim on any risk-adjusted basis.

B. Impact on Lost Profits Claim ($18.7M)

In the alternative to liquidated damages, Vantor claims lost profits of $18.7 million, calculated as VTS's average operating margin of approximately 12% on Stonefield freight applied to the remaining committed volume over the balance of the TSA Term. Specifically, Vantor claims 12% × $43.2M ACV × 3.6 remaining years = approximately $18.7 million.

VHC-008417 undermines the causation element of this claim. Lost profits are recoverable only where the plaintiff can establish that the losses were caused by the defendant's breach — not by the plaintiff's own conduct. See Kenford Co. v. County of Erie, 73 N.Y.2d 312, 319 (1989). Here, VTS's loss of the Stonefield contract was the direct result of VTS's own decision to withdraw fleet capacity, conceal the withdrawal, and fail to cure the resulting performance deficiencies. Stonefield's termination — the proximate cause of VTS's lost revenue — was a valid exercise of contractual rights triggered by VTS's own breach. Lost profits flowing from self-inflicted harm are not recoverable.

Additionally, as analyzed in our memorandum dated February 15, 2023, the liquidated damages claim and the lost profits claim are duplicative: both seek to compensate VTS for the same lost contract value over the same remaining Term. Under New York law, a plaintiff may not recover both liquidated damages and lost profits arising from the same breach. See Kestrel Corporation, 4 N.Y.3d 373, 381 (2005). Vantor appears to plead these as alternative theories, but the availability of either is undermined by VHC-008417.

C. Impact on Consequential Damages Claims ($9.47M)

Vantor asserts three categories of consequential damages:

These claims face a threshold contractual barrier: TSA Section 15.1 contains a mutual waiver of consequential damages, providing that "in no event shall either party be liable to the other for any indirect, incidental, special, consequential, or punitive damages arising out of or related to this Agreement, including but not limited to loss of revenue, loss of profits, loss of business, or cost of replacement services." As analyzed in our memorandum dated April 5, 2023, this waiver likely bars all three categories of consequential damages claimed by Vantor. While Vantor may argue that the waiver does not apply to claims arising from a wrongful termination (as opposed to a termination for Cause), this argument is circular — it assumes the termination was wrongful, which is the ultimate merits question.

VHC-008417 provides additional grounds for defeating these claims on the merits. The "stranded assets" claim — that VTS was left with tractors and trailers dedicated to Stonefield freight that could not be redeployed after termination — is directly contradicted by the email's revelation that VTS had already redeployed 85 tractors to serve another customer's commitments before termination. VTS cannot simultaneously claim that it proactively redeployed assets to serve other customers (as VHC-008417 establishes) and that it was left with stranded assets that had no alternative use (as its consequential damages claim asserts). At a minimum, the 85 redeployed tractors and their associated trailers must be excluded from any stranded asset calculation.

D. Expert Rebuttal Implications

VHC-008417 should be promptly transmitted to Dr. Evelyn Rosser of Kensington Analytics Group LLC for incorporation into the rebuttal expert report, which is due August 25, 2023 under the Case Management Order entered by Judge Ostrander on February 3, 2023.

The document supports the key conclusions of Dr. Rosser's draft analysis, which the undersigned has reviewed in consultation with Dr. Rosser's team:

• If termination was valid for Cause: Vantor is entitled to $0 in damages under any theory, because Section 14.2 (liquidated damages) applies only to terminations "other than for Cause," and lost profits and consequential damages are barred by the consequential damages waiver and, independently, by VTS's own causal contribution to the termination.

• Under alternative lost-profits theory: Even if the termination were deemed wrongful, Dr. Rosser's analysis demonstrates that maximum recoverable damages are approximately $8.2 million after adjustments for VTS's failure to mitigate, inflated operating margin assumptions in Dr. Trask's model, and proper prorating of the remaining Term.

• Failure to mitigate: VHC-008417 supports the argument that VTS failed to mitigate its damages by taking affirmative steps that caused the termination in the first instance. A party cannot create the conditions for its own loss and then claim failure to mitigate against the counterparty.

VHC-008417 should also be used in the rebuttal report to critique the damages analysis prepared by Vantor's expert, Dr. Philip Trask of Trask Greystone & Associates, whose report was served on May 15, 2023. Dr. Trask's report assumes that all $95.4 million in claimed damages are recoverable and does not account for VTS's own breaches, the first-to-breach doctrine, or the consequential damages waiver. The Trask report treats the termination as wrongful without analyzing the factual basis for the Cause determination and assumes 100% probability of recovery on the liquidated damages claim. VHC-008417 provides a factual basis for challenging these assumptions and substantially reducing Dr. Trask's damages figures.

VI. Anticipated Counterarguments and Risk Assessment

A. Vantor's Likely Counterarguments

We anticipate that Vantor, through Caldwell Royce & Shapiro LLP, will advance several counterarguments to diminish the impact of VHC-008417. We address each below.

1. "The tractor withdrawal was temporary and commercially necessary." Vantor may argue that VTS temporarily reassigned tractors to serve another customer's urgent needs, with the intention of returning them to the Stonefield fleet once the temporary demand was met, and that this was a commercially reasonable operational decision in light of Stonefield's volume shortfalls, which were reducing VTS's SLG-dedicated revenue.

Response: The email provides no indication that the withdrawal was intended to be temporary. Milescu does not describe the reassignment as short-term, does not reference any plan to return the tractors, and does not set a timeline for restoration of fleet capacity. To the contrary, the language "SLG won't notice until January" suggests an indefinite reassignment accompanied by a strategy for concealment — not a temporary, good-faith operational adjustment. Moreover, there is no evidence in the record that the 85 tractors were ever returned to SLG dedicated lanes prior to the January 18, 2022 Cure Notice. The February 14, 2022 cure response does not reference any return of tractors, and Q4 2021 and March 2022 equipment availability data shows continued shortfalls consistent with the tractors remaining deployed elsewhere. Finally, even if the withdrawal were temporary, TSA Section 7.2 required prior written consent for any reassignment or redeployment of dedicated fleet equipment, and no such consent was sought.

2. "SLG's volume shortfalls caused VTS to redeploy assets." Vantor may argue that Stonefield's failure to tender sufficient volume under the ACV commitment reduced VTS's SLG-related revenue to a level that made it economically unsustainable to maintain the full dedicated fleet, effectively forcing VTS to redeploy assets to generate revenue from other sources.

Response: As discussed in Section III.B above, the email does not cite SLG volume shortfalls as the reason for the withdrawal; it states the tractors were pulled "to cover [redacted] commitments." Additionally, the force majeure adjustment demonstrates that CY2 ACV was exceeded by $10.2 million, and the CY3 shortfall is disputed as to prorating. Even if there were a revenue shortfall, the proper contractual remedy was to invoke the dispute resolution provisions of TSA Section 16 or to provide notice under Section 7.2 — not to unilaterally strip dedicated fleet capacity and conceal the action.

3. "The email is taken out of context." Vantor may argue that VHC-008417 is a single email, taken out of context, and that the surrounding email chain (which does not appear to have been produced) provides additional context that explains or mitigates Milescu's statements. Vantor may produce additional emails or documents showing that the withdrawal was discussed with Stonefield, was part of a broader operational plan, or was reversed shortly after November 12, 2021.

Response: This is a legitimate risk at the moderate level. The face of VHC-008417 reflects a subject line of "Re: SLG fleet — ops update," suggesting it is part of a larger email chain. The preceding emails in the chain were not included in the first production. We have demanded production of the full email chain in correspondence dated May 10, 2023, and our Second RFP (served May 5, 2023) specifically requests all communications concerning fleet allocation, redeployment, or reassignment relating to SLG dedicated equipment. However, even if additional context is produced, the core language of VHC-008417 — particularly "SLG won't notice until January" — is difficult to explain away in any context. No amount of surrounding correspondence can transform a statement of deliberate concealment into an innocent operational communication.

4. "85 tractors alone don't account for the full decline to 248 available tractors." Vantor may concede that 85 tractors were withdrawn but argue that the remaining shortfall (approximately 67 additional tractors below the 400-unit commitment, for a total deficit of 152 tractors) was attributable to the driver shortage, maintenance cycles, and other factors beyond VTS's control. In this framing, the tractor withdrawal was one contributing factor among many, and VTS's performance failures would have occurred regardless.

Response: This argument has some factual basis — 85 tractors account for approximately 55.9% of the total 152-tractor deficit, not 100%. However, several responses are available. First, even if 85 tractors is not the sole cause, the withdrawal constitutes an independent material breach of TSA Section 7.1, regardless of whether other factors also contributed to the shortfall. A party that breaches a contract cannot avoid liability by arguing that its breach was only partially responsible for the harm. Second, the 85-tractor withdrawal was a substantial contributing factor — it represents over half the total deficit and pushed equipment availability well below the SLO threshold. Third, the deliberate and concealed nature of the withdrawal distinguishes it qualitatively from the other contributing factors: a driver shortage is an external market force, but a secret fleet redeployment is an intentional breach. Fourth, the remaining shortfall (approximately 67 additional tractors) may also be attributable in whole or in part to VTS management decisions rather than external forces — this is a question to be explored in further discovery and depositions.

B. Risk Assessment

Authenticity Risk: Low. VHC-008417 was produced by Vantor from its own custodial files as part of its first document production. The document was produced without any privilege designation, and no challenge to its authenticity has been raised or is anticipated. The metadata is consistent with the face of the document, and the email addresses, formatting, and content are consistent with other VTS internal communications produced in the same collection.

Admissibility Risk: Low. The email is a statement by a party opponent's agent or employee. Sandra Milescu, as COO of VTS, was acting within the scope of her employment and on a matter squarely within the scope of her authority — fleet operations and capacity management — when she authored the email. The email is therefore admissible as a non-hearsay party admission under Federal Rule of Evidence 801(d)(2)(D), which provides that a statement is not hearsay if it is "offered against an opposing party and was made by the party's agent or employee on a matter within the scope of that relationship and while it existed." No foundation witness is required for admission under this rule, although we may wish to authenticate the document through a deposition witness or a records custodian declaration as a precautionary measure.

Contextual Risk: Moderate. As discussed in Section VI.A.3 above, there is a moderate risk that Vantor will produce additional documents providing context for the Milescu email — either the full email chain, fleet redeployment records, or communications suggesting the withdrawal was temporary or was later reversed. Calderwood & Harkness should pursue aggressive supplemental discovery, including the Second RFP (already served May 5, 2023 and ordered by the Court on June 9, 2023), to obtain fleet redeployment records, communications with the [redacted] customer, internal VTS fleet management documents, and the complete email chain surrounding VHC-008417. We should be prepared for the possibility that additional documents may complicate but are unlikely to neutralize the impact of the email's core language.

VII. Cross-Reference with Deposition Strategy

VHC-008417 should be integrated into the deposition preparation for all four scheduled depositions in this matter. The document provides a factual foundation for lines of questioning that will be difficult for witnesses to deflect.

Sandra Milescu (deposition date to be scheduled). As the author of VHC-008417, Milescu is the most critical deposition witness on this issue. The email should serve as the primary exhibit in her deposition. Key lines of questioning include:

(a) Who made the decision to withdraw the 85 tractors from SLG dedicated lanes? Was it Milescu's decision, or was she implementing a directive from Vantorovich or another executive?

(b) When exactly were the tractors redeployed? The email references the withdrawal in the past tense as of November 12, 2021 — was the redeployment completed in October 2021, or earlier?

(c) To which customer account were the tractors reassigned? What are the "[redacted] commitments" referenced in the email? What is the identity of the customer whose commitments were being covered?

(d) Why was Stonefield not notified of the tractor withdrawal, as required by TSA Section 7.2?

(e) What did Milescu mean by "SLG won't notice until January"? How did she determine that Stonefield would not notice? Was this a deliberate decision to conceal the withdrawal?

(f) Were the 85 tractors ever returned to SLG dedicated lanes? If so, when? If not, why not?

(g) Was Milescu aware that Derek Pruitt's February 14, 2022 cure response did not disclose the tractor withdrawal? Did Milescu review or approve the cure response before it was sent? Did anyone instruct Pruitt not to disclose the withdrawal?

Nikolai Vantorovich (deposition date to be scheduled). As the recipient of VHC-008417 and the CEO and controlling shareholder of Vantor, Vantorovich should be questioned about:

(a) His knowledge and approval of the tractor withdrawal — did he authorize it, or was he merely informed after the fact?

(b) His involvement in the decision to redeploy fleet assets to the [redacted] customer — was this a corporate-level strategic decision?

(d) His response to Milescu's email — did he approve the withdrawal, question it, or direct any particular course of action?

(e) Whether he was aware that the cure response omitted any reference to the tractor withdrawal.

(f) His understanding of VTS's obligations under TSA Section 7.1 to maintain committed fleet capacity.

Derek Pruitt (deposition scheduled July 10, 2023). Pruitt authored the February 14, 2022 cure response. He should be examined on:

(a) Whether he was aware of the 85-tractor withdrawal at the time he drafted and sent the cure response.

(b) Whether Milescu, Vantorovich, or any other VTS executive informed him of the withdrawal before, during, or after the cure period.

(d) On what factual basis he represented to Stonefield that VTS had "substantially cured" the identified deficiencies, and whether that representation was accurate.

(e) Whether he was aware, at the time of the cure response, that the performance failures were attributable to an internal fleet redeployment decision rather than external factors.

Raymond Hess (deposition scheduled July 27, 2023). As Director of Contract Compliance at Stonefield and the author of the January 18, 2022 Cure Notice, Hess should be questioned to confirm:

(a) That Stonefield was never notified by VTS of the 85-tractor withdrawal, either before or after the Cure Notice.

(b) That the performance metrics identified in the Cure Notice were derived from VTS's own data reported through the Carrier Performance Portal, and that those metrics reflected the impact of the fleet reduction without attributing the decline to any specific cause.

(c) That Stonefield's termination decision was based on the documented SLO failures and VTS's failure to cure within the 30-day period, not on any pretext or ulterior motive.

(d) That Stonefield first learned of the tractor withdrawal through the document production in this litigation (if that is the case), which would further underscore the effectiveness of VTS's concealment.

VIII. Recommendations

Based on the foregoing analysis, the undersigned recommends the following action items, organized by priority and timeline:

1. Priority Exhibit Designation. Designate VHC-008417 as a Tier 1 exhibit for all purposes, including summary judgment briefing, trial preparation, and mediation (if applicable). This document should be included in the core exhibit set that is flagged for all team members and incorporated into the master trial binder. The document should be reproduced and maintained in both native format and TIFF image format for use in depositions and court filings.

2. Expert Coordination. Transmit VHC-008417 and all related fleet records currently in our possession to Dr. Evelyn Rosser at Kensington Analytics Group LLC for immediate incorporation into the rebuttal expert report. The rebuttal report is due August 25, 2023 under the Case Management Order. This transmission should be accompanied by the analysis set forth in this memorandum (subject to work product protections) and by the reference memorandum to Kensington Analytics Group dated May 25, 2023 regarding rebuttal issues identified in Dr. Trask's report.

3. Supplemental discovery. Press vigorously for production of fleet redeployment records responsive to Stonefield's Second Request for Production of Documents, Nos. 1 through 5, served May 5, 2023. Vantor has objected to these requests as overbroad per the May 30, 2023 meet-and-confer, and we should be prepared to move to compel if Vantor does not produce responsive documents by the June 30, 2023 court-ordered deadline. The specific discovery priorities are: (a) the identity of the [redacted] customer account to which the 85 tractors were redeployed; (b) the full email chain surrounding VHC-008417, including any antecedent and responsive emails; (c) VTS internal fleet management documents showing tractor and trailer assignments, redeployments, and capacity reports for the period September 2021 through March 2022; and (d) any VTS contracts, commitments, or communications with the [redacted] customer during the same period. We should also demand an unredacted version of VHC-008417 to identify the customer name.

4. Deposition Preparation. Build deposition outlines for Sandra Milescu and Nikolai Vantorovich around VHC-008417 as a foundational exhibit. The Milescu deposition should be scheduled as soon as practicable; we should propose dates within the next 60 days. Prepare the Derek Pruitt deposition examination (scheduled July 10, 2023) with a dedicated section on the cure response omission, using VHC-008417 as the primary impeachment exhibit. Coordinate with the team preparing the Raymond Hess deposition outline (scheduled July 27, 2023) to ensure that Stonefield's lack of knowledge regarding the tractor withdrawal is established on the record.

5. Legal Briefing. Update the first-to-breach doctrine research memorandum (dated March 15, 2023) and the pretextual termination research memorandum (dated October 7, 2022) to incorporate the factual findings from VHC-008417. These updated memoranda will feed directly into the summary judgment roadmap. Consider whether VHC-008417 warrants filing an early partial summary judgment motion on the termination-for-Cause defense prior to the close of all expert discovery, or whether it is more strategically advantageous to present the full evidentiary picture in a comprehensive motion after the rebuttal expert report is served.

6. Client Reporting. Include the analysis of VHC-008417 in the next monthly status report to Tobias Wren, General Counsel of Stonefield Logistics Group Inc. Provide an update to Ridgeline Capital Partners — specifically to Alison Trang (Managing Director) and Douglas Whitmore (Associate General Counsel) — regarding the materially strengthened case posture resulting from this discovery. The update to Ridgeline should be coordinated with Tobias Wren and should emphasize the expected impact on the risk-adjusted damages exposure and overall case valuation.

7. Privilege Protection. Ensure that this analysis memorandum, and all related attorney work product reflecting mental impressions, conclusions, and legal theories, is not inadvertently produced in any subsequent document production. This memorandum should be maintained on the firm's internal privilege log. If any challenge to work product protection arises, the memorandum is protected under the work product doctrine, Fed. R. Civ. P. 26(b)(3), as a document prepared in anticipation of litigation reflecting the mental impressions, conclusions, opinions, and legal theories of counsel. The heightened protection for opinion work product under Hickman v. Taylor, 329 U.S. 495 (1947), and its progeny, should apply.

IX. Conclusion

VHC-008417 is the single most significant document recovered in discovery to date in Vantor Holdings Corp. v. Stonefield Logistics Group Inc. It transforms the factual narrative of this case from the version advanced in Vantor's Amended Complaint — in which Stonefield caused VTS's performance failures through volume shortfalls and then pretextually terminated the TSA to avoid contractual rate increases — to the version that the facts now support: VTS intentionally reduced its dedicated fleet capacity by withdrawing 85 tractors to serve another customer, deliberately concealed the withdrawal from Stonefield, failed to cure the resulting performance deficiencies when they were identified, and was validly terminated for Cause under TSA Section 13.1(a).

The email's evidentiary value extends across virtually every contested issue in this litigation. It supports the defense that the termination was a valid exercise of Stonefield's contractual rights for Cause. It provides the factual predicate for the first-to-breach defense under New York law. It establishes the inequitable conduct necessary for the unclean hands defense. It demonstrates that VTS failed to cure because the cure response concealed the root cause of the performance failures. It undermines Vantor's pretext theory by establishing that the SLO failures were genuine and self-inflicted. And it materially weakens Vantor's entire damages case — $95.4 million across liquidated damages, lost profits, and consequential damages — by establishing that VTS's losses were the product of its own deliberate conduct, not Stonefield's breach.

The follow-up work streams identified in Section VIII above — supplemental discovery, deposition preparation, expert coordination, legal briefing updates, and client reporting — should be initiated immediately. I am available to discuss this memorandum and the recommended next steps at your earliest convenience.

Prepared by: Simone Laroche, Associate, Calderwood & Harkness LLP Matter No.: 1012-00005 PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

Field	Detail
Bates Number	VHC-008417
Document Type	Email (single page)
Date	November 12, 2021, 9:47 PM EST
From	Sandra Milescu, Chief Operating Officer, Vantor Holdings Corp. / Vantor Transport Services LLC
To	Nikolai Vantorovich, Chief Executive Officer and Founder, Vantor Holdings Corp.
CC	None
Subject Line	"Re: SLG fleet — ops update"
Attachments	None reflected on face of document
Production Source	Vantor's First Document Production, served by Caldwell Royce & Shapiro LLP on April 28, 2023, pursuant to Stonefield's First Request for Production of Documents
Privilege Designation	None — document was produced without redaction or privilege designation and does not appear on Vantor's privilege log (served May 1, 2023)
Date	Event
March 15, 2019	TSA executed between Stonefield and VTS (Contract Year 1 begins April 1, 2019)
April 1, 2020	Contract Year 2 begins
April 6, 2020	Stonefield invokes force majeure under TSA Section 12.1 due to COVID-19 pandemic
September 30, 2020	Force majeure period ends; adjusted CY2 ACV = $21.6M (= $43.2M × 6/12)
March 31, 2021	Contract Year 2 ends; Stonefield tenders $31.8M in freight volume (exceeding adjusted ACV by $10.2M)
April 1, 2021	Contract Year 3 begins
September 22, 2021	Janet Kirkwood (VP, Carrier Relations, Stonefield) emails Carlos Medina (SVP, Operations, Stonefield) noting emerging VTS performance issues and that Stonefield was moving volume to Cascade and Briarwood on Lanes 8–14 (Secondary Lanes). This is the email Vantor identifies as evidence of Stonefield's premeditated termination plan — but it postdates the onset of VTS performance problems and, critically, predates the tractor withdrawal confirmed by VHC-008417
October 2021 (approx.)	VTS pulls 85 tractors off SLG dedicated lanes per Milescu email
November 12, 2021	Milescu email to Vantorovich (VHC-008417)
November–December 2021	16 cargo claims filed against VTS, totaling $387,400 in claimed damages, yielding a claims ratio of approximately 1.07% (vs. ≤0.5% SLO threshold under Schedule B, Section 4)
Q4 2021 (Oct.–Dec.)	All five VTS performance metrics fall below SLO thresholds: (1) On-Time Pick-Up: 71.3% (SLO: ≥92%); (2) On-Time Delivery: 68.7% (SLO: ≥90%); (3) Equipment Availability: 62% (SLO: ≥85%); (4) Tender Acceptance Rate: 74.2% (SLO: ≥90%); (5) Cargo Claims Ratio: 1.07% (SLO: ≤0.5%)
January 18, 2022	Stonefield Cure Notice issued by Raymond Hess (Director, Contract Compliance) to Sandra Milescu, identifying the five specific metrics failures and invoking TSA Section 13.1(a)
February 14, 2022	VTS cure response from Derek Pruitt (VP, Business Development) to Janet Kirkwood, acknowledging "operational challenges" but attributing failures to driver shortage, SLG volume shortfalls, and SLG's diversion of volume to spot market carriers — notably, no mention of VTS's tractor withdrawal

February 17, 2022	30-day cure period expires under TSA Section 13.1(a)
March 2022	Post-cure-period performance data shows c

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected from disclosure under the work product doctrine, Fed. R. Civ. P. 26(b)(3). This memorandum also contains confidential attorney-client communications and is protected by the attorney-client privilege. Do not forward, copy, or distribute without the express authorization of the Responsible Partner.
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166
May 14, 2023
MEMORANDUM
Matter No.: 1012-00005
To: Samuel Eklund, Responsible Partner, Litigation (General) Patrick Gallagher, Lead Associate, Litigation (General)
From: Simone Laroche, Working Associate, Litigation (General)
Re: Analysis of Key Document VHC-008417 — Sandra Milescu Email Dated November 12, 2021 Regarding Removal of Tractors from SLG Dedicated Lanes
I. Executive Summary
During the course of our initial review of Vantor Holdings Corp.'s ("Vantor") first document production — comprising 28,914 documents produced on April 28, 2023, bearing Bates range VHC-000001 through VHC-028914 — the review team identified a document of singular importance. The document, bearing Bates number VHC-008417, is an internal email from Sandra Milescu, Chief Operating Officer of Vantor Holdings Corp. and its operating subsidiary Vantor Transport Services LLC ("VTS"), to Nikolai Vantorovich, Chief Executive Officer and Founder of Vantor, dated November 12, 2021. The email concerns VTS's unilateral withdrawal of 85 tractors from lanes dedicated to our client, Stonefield Logistics Group Inc. ("Stonefield" or "SLG").
This memorandum sets forth the full text and context of VHC-008417, its significance across the primary liability and damages issues in this case, anticipated counterarguments, and recommendations for incorporating the document into our defense and counterclaim strategy.
Summary Conclusion. VHC-008417 constitutes compelling — and, in the estimation of the undersigned, potentially dispositive — evidence that VTS intentionally and unilaterally withdrew 85 tractors from Stonefield's dedicated lanes in or around October through November 2021, without providing any notification to Stonefield, directly causing the Q4 2021 service level failures that formed the basis of Stonefield's January 18, 2022 Cure Notice and Stonefield's subsequent March 4, 2022 termination of the Transportation Services Agreement ("TSA") for Cause under Section 13.1(a).
This document fundamentally undermines Vantor's core litigation narrative, as asserted in the Amended Complaint filed December 2, 2022, which contends that VTS's performance deficiencies during Q4 2021 were caused by: (i) a nationwide driver shortage attributable to macroeconomic and pandemic-related labor market disruptions; (ii) Stonefield's own failure to tender freight volumes sufficient to meet the Annual Committed Volume ("ACV") obligation of $43.2 million in Contract Years 2 and 3 (the "ACV shortfall" allegation); and (iii) Stonefield's alleged diversion of freight volume to competing carriers, specifically Cascade Freight Systems Inc. ("Cascade") and Briarwood Trucking Co. ("Briarwood"), in purported violation of the exclusivity provisions set forth in Schedule C to the TSA. The Milescu email contradicts each of these theories by demonstrating that the tractor withdrawal was a volitional, top-level corporate decision to redeploy assets to serve another customer, undertaken with full awareness that it would impair service to Stonefield and accompanied by a deliberate decision to conceal the withdrawal from Stonefield.
The email demonstrates an intentional, undisclosed material breach by VTS and provides substantial support for Stonefield's defenses of: (a) valid termination for Cause under Section 13.1(a) of the TSA; (b) the first-to-breach doctrine under New York law; (c) the equitable defense of unclean hands; and (d) contributory breach. It also materially weakens Vantor's damages case across all categories of claimed relief, which total $95.4 million in the aggregate.
Recommendation. VHC-008417 should be designated as a Tier 1 exhibit and treated as a centerpiece document in: (a) our summary judgment briefing, which is anticipated to be filed following the close of fact discovery; (b) the rebuttal expert analysis being prepared by Dr. Evelyn Rosser of Kensington Analytics Group LLC; and (c) any trial presentation. Further recommendations regarding discovery follow-up, deposition strategy, expert coordination, and client reporting are set forth in Section VIII below.
II. The Document — Full Text and Context
A. Document Identification
The key identifying information for VHC-008417 is as follows:
The email was identified during first-level document review conducted by the Calderwood & Harkness review team between May 1 and May 10, 2023. It was flagged as a "Hot Document" by contract reviewer Angela Watkins on May 4, 2023, and escalated to the working associate level for analysis on May 5, 2023. The undersigned has reviewed the document in its native format (Outlook .msg file) as well as the TIFF production image, and confirms that the metadata is consistent with the face of the document.
B. Key Language
The critical passage of VHC-008417, reproduced verbatim from the face of the document, reads as follows:
"We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January. I've already briefed the ops team — they're running the remaining units at max utilization but we'll see the numbers come down. We need to talk about whether to loop in Derek [Pruitt] on the SLG side or just let it ride."
Several aspects of this language warrant detailed discussion.
First, the phrase "We've pulled 85 tractors off the SLG dedicated lanes" establishes that the withdrawal was an affirmative, completed action taken by VTS management. The use of the past tense and the first-person plural pronoun indicates that Milescu personally participated in or directed the decision. The number "85" is specific and significant: the TSA required VTS to maintain minimum committed fleet capacity of 400 tractors dedicated to Stonefield freight, meaning the withdrawal of 85 tractors represents a reduction of approximately 21.25% of the committed fleet.
Second, the phrase "to cover [redacted] commitments" reveals the purpose of the withdrawal: to serve another, unidentified customer. The "[redacted]" portion as it appears in the production is a partial redaction that obscures what appears to be a customer or account name. This is not a privilege redaction (no privilege was asserted), and it is unclear whether the redaction was applied by Vantor prior to production or represents a redaction in the original document. We have raised this issue with Caldwell Royce in correspondence dated May 10, 2023, and have demanded production of an unredacted version. Additionally, Stonefield's Second Request for Production of Documents, served May 5, 2023, specifically targets fleet redeployment records and contracts with shippers to whom fleet was redirected during the October 2021 through March 2022 period. As of the date of this memorandum, the supplemental production has not been received; the Court ordered production on June 9, 2023, with a compliance deadline of June 30, 2023.
Third, the statement "SLG won't notice until January" is extraordinarily damaging to Vantor's position. It demonstrates three critical facts: (1) awareness on the part of VTS's senior management that the tractor withdrawal would have a material impact on service to Stonefield; (2) a deliberate decision to conceal the withdrawal from Stonefield rather than provide the notice that the TSA required; and (3) an expectation — indeed, a calculated prediction — that the impact would become visible to Stonefield only when Q4 2021 performance metrics were reviewed, which typically occurred in the first weeks of the following quarter. This language eviscerates any argument that the withdrawal was an innocent operational decision or that VTS believed it would not affect service levels.
Fourth, the reference to "let it ride" — i.e., whether to disclose the withdrawal to Derek Pruitt, VTS's Vice President of Business Development and the VTS executive responsible for the Stonefield account relationship — confirms that as of November 12, 2021, VTS had not yet disclosed the withdrawal to its own business development team, much less to Stonefield. The email reflects a deliberate internal discussion about whether to conceal the withdrawal. No subsequent document in the first production reflects any decision to disclose the withdrawal to Stonefield, and the February 14, 2022 cure response — authored by Pruitt himself — is silent on the topic, raising the inference that Pruitt either was never informed or was instructed to omit this information.
Finally, the email is from Sandra Milescu, VTS's most senior operations executive, to Nikolai Vantorovich, the company's Chief Executive Officer and sole controlling shareholder (holding approximately 58% of Vantor's equity). This establishes that the tractor withdrawal was a top-level corporate decision made by or with the knowledge of the company's two most senior officers — not an operational accident, a field-level mistake, or a decision made by mid-level logistics managers without executive awareness.
C. Timing and Chronological Context
The date of VHC-008417 — November 12, 2021 — is of critical importance. It falls squarely within Q4 2021, the quarter in which VTS's performance metrics collapsed across all five Service Level Obligations ("SLOs") under the TSA (Contract Reference No. SLG-VTS-2019-0315, dated March 15, 2019). Moreover, the email's use of the past tense ("We've pulled") indicates that the actual tractor withdrawal had already been completed as of November 12, 2021, suggesting the reassignment occurred in October 2021 at the latest — i.e., at or near the beginning of Q4 2021. This timing is critical because it means the tractor withdrawal preceded and causally explains the performance collapse that Vantor now attributes to other factors.
The following timeline situates VHC-008417 within the broader chronology of events leading to the TSA termination:
The chronological placement of VHC-008417 is particularly significant in relation to the September 22, 2021 Kirkwood email (produced as SLG-004218), which Vantor has emphasized in its pleadings as purported evidence that Stonefield was already planning to terminate VTS and divert volume to alternative carriers before the Q4 2021 performance failures materialized. The Kirkwood email, however, was written in response to performance concerns that were already manifesting — and, as VHC-008417 now reveals, those performance concerns were themselves caused or exacerbated by VTS's own decision to begin withdrawing fleet capacity. Any Stonefield decision to engage alternative carriers was reactive, not premeditated.
III. Analysis of Impact on Key Liability Issues
A. Demonstrates Material Breach by VTS — Failure to Maintain Committed Fleet Capacity
VHC-008417 provides direct evidence that VTS committed a material breach of its obligations under the TSA by failing to maintain the committed fleet capacity required to serve Stonefield's freight.
Contractual Requirements. Section 7.1 of the TSA requires VTS to "maintain and make available to SLG, at all times during the Term, a minimum fleet capacity of four hundred (400) Class 8 tractors and one thousand two hundred (1,200) dry van and refrigerated trailers dedicated to the transportation of SLG freight on the Dedicated Lanes and Secondary Lanes identified in Schedule C." Schedule B, Section 2(c) establishes the corresponding SLO for Equipment Availability at "not less than eighty-five percent (85%) of committed fleet capacity, measured on a monthly basis." Section 7.2 further provides that VTS "shall not reassign, redeploy, or otherwise remove equipment from the SLG Dedicated Fleet without the prior written consent of SLG, except in cases of scheduled maintenance, repair, or replacement with equivalent equipment."
Impact of the 85-Tractor Withdrawal. The removal of 85 tractors from SLG dedicated lanes reduced VTS's available fleet from the committed level of approximately 400 tractors to approximately 315 tractors (or lower, if additional tractors were already unavailable due to maintenance or other factors). This represents approximately 78.75% of committed fleet capacity at best — well below the 85% SLO threshold. The actual Q4 2021 equipment availability data, as reflected in both Stonefield's January 18, 2022 Cure Notice and VTS's own reporting through the Carrier Performance Portal, showed only approximately 248 tractors available during Q4 2021, representing only 62% of committed fleet capacity. The 85-tractor withdrawal identified in VHC-008417 thus accounts for a substantial portion of the approximately 152-tractor deficit (85 of 152, or approximately 55.9% of the total shortfall).
Nature of the Breach. The withdrawal was unilateral, undisclosed, and deliberate. It was not the result of external market forces such as the driver shortage Vantor invokes, nor was it attributable to any conduct by Stonefield. It was an affirmative corporate decision to redeploy assets for VTS's own commercial benefit — to "cover [redacted] commitments" — at Stonefield's expense and without Stonefield's knowledge or consent. Section 7.2 of the TSA required prior written consent for any such redeployment, and no such consent was sought or obtained.
Moreover, TSA Section 7.4 required VTS to provide substitute equipment or surge capacity arrangements when any portion of the dedicated fleet was unavailable: "In the event that any equipment in the SLG Dedicated Fleet is unavailable for any reason, VTS shall promptly arrange for substitute equipment of equal or greater capacity, or shall engage qualified sub-haulers at VTS's cost, to ensure continuity of service at the applicable Service Level Obligations." VTS failed to provide substitute equipment, failed to engage sub-haulers, and concealed the withdrawal entirely from Stonefield.
The deliberate and undisclosed nature of this breach, combined with its magnitude (a 21.25% reduction in committed fleet capacity) and its direct causal connection to the Q4 2021 performance collapse, establishes that this was a material breach of the TSA — not a minor or technical default, but a fundamental failure to perform that went to the essence of the parties' agreement.
B. Undermines Vantor's Causation Theory
Vantor's Amended Complaint, filed December 2, 2022, advances three primary theories to explain VTS's Q4 2021 performance failures and to shift blame to Stonefield. VHC-008417 refutes each of these theories.
1. The ACV Shortfall Argument. Vantor alleges that Stonefield failed to tender the $43.2 million ACV in Contract Years 2 and 3, tendering only $31.8 million in CY2 and $36.5 million through January 2022 (ten months into CY3), and that these alleged shortfalls reduced VTS's revenue to a level that made it commercially infeasible to maintain the full committed fleet. This argument fails for multiple independent reasons, and VHC-008417 provides an additional — and powerful — basis for rejection.
The email does not reference any revenue shortfall from Stonefield as the reason for the tractor withdrawal. Milescu states that the tractors were pulled "to cover [redacted] commitments" — that is, to serve another customer's contractual obligations, not because Stonefield was providing insufficient freight. The withdrawal was an affirmative commercial decision to prioritize another revenue stream, not a defensive response to lost volume.
Furthermore, the CY2 ACV shortfall argument is factually unsupportable. Stonefield properly invoked force majeure under TSA Section 12.1 for the period April 6, 2020 through September 30, 2020, due to the COVID-19 pandemic and its effects on freight volumes industry-wide. Under the force majeure provision, the CY2 ACV was properly adjusted to $21.6 million (= $43.2 million × 6 non-force-majeure months / 12 months). Stonefield's actual CY2 tenders of $31.8 million exceeded the adjusted ACV minimum by $10.2 million — a 47.2% surplus. The CY3 shortfall alleged by Vantor ($43.2 million minus $36.5 million = $6.7 million) covers only the first ten months of CY3 (April 2021 through January 2022), prior to termination, and is therefore disputed as to appropriate prorating. The TSA does not require proportional monthly tendering; the ACV is an annual commitment measured at year-end.
2. The Volume Diversion Argument. Vantor alleges that Stonefield improperly diverted freight to Cascade Freight Systems Inc. and Briarwood Trucking Co. in violation of the exclusivity provisions set forth in Schedule C to the TSA. VHC-008417 undermines this argument by revealing the causal chain that led to Stonefield's use of alternative carriers.
As established in our analysis memorandum dated September 30, 2022, Stonefield's use of Cascade and Briarwood was limited to Lanes 8 through 14, which are classified as "Secondary Lanes" under Schedule C, Section 2(b). The exclusivity restrictions in Schedule C, Section 1(a) apply only to "Primary Dedicated Lanes" (Lanes 1 through 7). Secondary Lanes are subject to a different regime: under Schedule C, Section 2(b), VTS has a "right of first refusal" on Secondary Lane freight, but Stonefield retains the right to tender such freight to alternative carriers "in the event that VTS declines a tender or fails to provide timely confirmation of acceptance." The Q4 2021 data shows that VTS's tender acceptance rate on Secondary Lanes fell to 58.3%, far below the 90% SLO, creating ample contractual basis for Stonefield to engage alternative carriers on those lanes.
More fundamentally, VHC-008417 reveals that the performance failures that prompted Stonefield to seek alternative carriers on Secondary Lanes were themselves caused by VTS's own tractor withdrawal. The diversion of volume to Cascade and Briarwood was a response to VTS's tender rejections and service failures — the very failures now shown to have been the result of VTS's deliberate decision to strip 85 tractors from the Stonefield fleet. Vantor cannot simultaneously (a) withdraw fleet capacity without notice, causing tender rejections and service failures, and (b) complain that Stonefield turned to other carriers when VTS failed to perform.
3. The Driver Shortage Argument. Vantor attributes VTS's performance failures to an industry-wide driver shortage that was "beyond VTS's control and affected all carriers in the truckload segment." While it is true that the trucking industry experienced significant driver shortages during 2021, VHC-008417 demonstrates that VTS's particular performance collapse was not attributable to this external market condition. Rather, VTS made a deliberate commercial decision to redeploy dedicated assets to serve another customer. The email contains no reference to driver availability, driver recruitment challenges, or any inability to staff the dedicated fleet. The 85 tractors were not parked for lack of drivers — they were reassigned to cover another customer's commitments. This is a fundamentally different factual scenario from the force-majeure-type market disruption that Vantor's driver shortage theory presupposes.
C. Supports First-to-Breach Doctrine
Under well-established New York law, a party that commits the first material breach of a contract cannot recover damages for the other party's subsequent failure to perform. See Ashgrove & Co. v. Camberwell Industries, 500 F.3d 171, 186 (2d Cir. 2007) ("It is axiomatic that a party to a contract cannot rely on the failure of another to perform a condition precedent where he has frustrated or prevented the occurrence of the condition."); RXR Acquisition Corp. v. Pier 92 Equity Partners, LLC, 2014 WL 3974319, at *7 (Sup. Ct. N.Y. Cnty. Aug. 14, 2014) (where one party commits the first material breach, the non-breaching party is excused from further performance). As discussed in our research memorandum dated March 15, 2023, the first-to-breach doctrine is a complete defense to Vantor's breach of contract claim if we can establish that VTS was the first party to commit a material breach of the TSA.
VHC-008417 provides powerful evidence that VTS was indeed the first to breach. VTS's unilateral withdrawal of 85 tractors from SLG dedicated lanes in October 2021 constitutes a material breach of VTS's fleet commitment obligations under TSA Section 7.1 and the Equipment Availability SLO. This breach predates any of the conduct that Vantor attributes to Stonefield as constituting a breach:
•  CY3 volume shortfall: Vantor calculates the CY3 ACV shortfall based on the full April 2021 through March 2022 contract year, meaning any shortfall was not crystallized — and could not have been determined — until the end of CY3. As of October 2021, when VTS withdrew the tractors, CY3 was only six months old, and there was no basis to conclude that Stonefield would not meet the ACV. VTS's breach thus predates any cognizable Stonefield breach.
•  Volume diversion: As discussed above, Stonefield's use of Cascade and Briarwood on Secondary Lanes was contractually permitted and was undertaken in response to VTS's own performance failures. The diversion did not commence until after the onset of VTS's tender rejections, which VHC-008417 now reveals were caused by VTS's fleet withdrawal.
•  Termination: Stonefield's termination of the TSA on March 4, 2022, obviously postdates VTS's October 2021 breach by approximately five months.
The argument is thus straightforward: VTS committed the first material breach of the TSA by unilaterally withdrawing 85 tractors from the dedicated fleet in October 2021, in violation of TSA Sections 7.1, 7.2, and 7.4 and the Equipment Availability SLO. That breach predates and causally explains any performance by Stonefield that Vantor characterizes as a breach. Under the first-to-breach doctrine, VTS's prior material breach excuses Stonefield's subsequent performance and validates the termination for Cause.
D. Supports Unclean Hands Defense
The unclean hands defense is an equitable doctrine that bars a party from obtaining relief where that party has engaged in inequitable conduct directly related to the subject matter of the litigation. See Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 814 (1945); National Distillers & Chemical Corp. v. Seyopp Corp., 17 N.Y.2d 12, 15-16 (1966). The doctrine applies where the party seeking relief has acted in bad faith, with fraudulent intent, or through other unconscionable means in connection with the transaction at issue.
VHC-008417 provides compelling evidence of inequitable conduct by Vantor. The deliberate concealment aspect of the email — embodied in the statement "SLG won't notice until January" — demonstrates that VTS's senior management knowingly hid a material breach from its contractual counterpart. The email reflects not merely a failure to disclose but an affirmative calculation of the timeline for concealment: Milescu predicted that Stonefield would discover the fleet reduction until January 2022, when Q4 2021 metrics would be reviewed. This was not an oversight — it was a strategy.
This concealment is directly relevant to Vantor's assertion that VTS "substantially cured" the identified deficiencies during the 30-day cure period following the January 18, 2022 Cure Notice. VTS's February 14, 2022 cure response, authored by Derek Pruitt, never disclosed the tractor withdrawal or the redeployment of fleet assets to another customer account. Instead, Pruitt attributed the performance failures to external factors (driver shortage, Stonefield volume shortfalls, and volume diversion) and asserted that VTS had taken corrective measures — while the root cause of the failures remained not only unaddressed but undisclosed. Under the equitable doctrine of unclean hands, Vantor should not be permitted to recover damages for a termination that was proximately caused by Vantor's own intentional and concealed breach.
E. Impact on Vantor's Claim That Termination Was Pretextual
Vantor's Amended Complaint devotes considerable attention to the allegation that Stonefield's termination of the TSA was pretextual — that is, that Stonefield manufactured the Q4 2021 performance concerns as a pretext to escape the TSA in advance of the April 2022 rate adjustment under Section 5.3. The Rate Adjustment Mechanism in Section 5.3 would have increased per-mile rates from a weighted average of $2.87 to $3.28, representing a 14.3% increase and projected to add approximately $6.2 million in annual transportation costs to Stonefield's budget. Vantor contends that Stonefield was motivated by cost avoidance rather than genuine performance concerns.
VHC-008417 substantially neutralizes this pretext argument. The email demonstrates that Stonefield had genuine, objective grounds for termination: VTS's Q4 2021 performance failures were real, quantifiable, and documented across all five SLOs. More importantly, those failures were not manufactured by Stonefield — they were caused by VTS's own deliberate decision to withdraw fleet capacity. Stonefield did not need to fabricate performance deficiencies; VTS created them unilaterally and then concealed the cause.
Even assuming, arguendo, that Stonefield was aware of and partially motivated by the upcoming rate adjustment, under New York law the existence of mixed motives does not invalidate a termination for Cause where objective contractual grounds for termination are satisfied. See Bramwell & Co. v. Herald Sq. Loft Corp., 67 A.D.2d 442, 446 (1st Dep't 1979) (a party exercising a contractual right need not demonstrate pure motives if the contractual conditions for exercise of that right are met); see also our research memorandum dated October 7, 2022, analyzing the mixed-motive question under New York contract law. TSA Section 13.1(a) provides that Stonefield may terminate for Cause upon a "material failure by VTS to perform its obligations under this Agreement, including failure to maintain Service Level Obligations as set forth in Schedule B, which failure is not cured within thirty (30) days of written notice." The Q4 2021 SLO failures are undisputed; VTS itself acknowledged "operational challenges" in its cure response. The contractual conditions for termination were satisfied regardless of any additional motivations Stonefield may have had.
VHC-008417 thus shifts the narrative from "Stonefield manufactured a pretext to avoid rate increases" to "VTS secretly sabotaged its own performance, concealed the sabotage, and then blamed Stonefield when the consequences materialized."
IV. Analysis of Vantor's February 14, 2022 Cure Response in Light of VHC-008417
The VTS cure response dated February 14, 2022 — from Derek Pruitt (VP, Business Development, VTS) to Janet Kirkwood (VP, Carrier Relations, Stonefield) — assumes particular significance when read in conjunction with VHC-008417. The cure response, produced as VHC-003812, is a three-page letter that acknowledged "operational challenges during the fourth quarter of 2021" and addressed each of the five SLO failures identified in Stonefield's January 18, 2022 Cure Notice. The cure response:
•  Attributed the performance failures to external factors: Specifically, (i) a "nationwide shortage of qualified commercial drivers affecting all carriers in the TL segment," (ii) "SLG's failure to meet Annual Committed Volume obligations, which reduced the revenue base supporting VTS's SLG-dedicated operations," and (iii) "SLG's instructions to VTS to decline tenders on certain lanes, combined with SLG's diversion of volume to spot market and competitive carriers, which disrupted VTS's lane optimization and equipment utilization planning."
•  Asserted that VTS had "substantially cured" the identified deficiencies: Pruitt stated that VTS had "implemented a comprehensive corrective action plan including accelerated driver recruitment, enhanced maintenance scheduling to improve equipment availability, and optimization of dispatch routing on SLG Primary and Secondary Lanes."
•  Disputed the cargo claims data: Pruitt challenged Stonefield's calculation of the cargo claims ratio, arguing that two of the 16 claims (totaling $48,200) were attributable to shipper packing deficiencies rather than carrier handling and should be excluded from the ratio calculation.
•  Critically, made no mention whatsoever of the tractor withdrawal or the redeployment of 85 tractors to the [redacted] customer account.
VHC-008417 reveals that the cure response was, at best, materially misleading and, at worst, a document that fraudulently concealed the primary cause of the service failures. The cure response attributed VTS's performance collapse to external market forces and Stonefield's own conduct, when VTS's senior management knew — and had known since at least October 2021 — that the principal cause was VTS's own voluntary withdrawal of 21.25% of the dedicated fleet.
This has three important implications:
First, it strengthens the argument that VTS did not, in fact, cure the breaches within the 30-day cure period. The cure period ran from January 18, 2022 (date of the Cure Notice) through February 17, 2022. To "cure" the identified deficiencies, VTS would have needed to address the root cause of the SLO failures — which was the fleet reduction. VTS's cure response did not mention the fleet reduction, did not indicate that the 85 tractors had been returned to SLG dedicated lanes, and did not propose any timeline for restoring the committed fleet capacity. A cure that does not address the underlying breach is no cure at all.
Second, post-cure-period performance data confirms that no genuine cure occurred. Stonefield's internal operations data for March 2022 — the month immediately following the expiration of the cure period — showed continued SLO failures: On-Time Pick-Up at 73.8% (SLO: ≥92%); On-Time Delivery at 70.2% (SLO: ≥90%); Equipment Availability at 64.1% (SLO: ≥85%). These figures represent only marginal improvement over Q4 2021 levels and remain far below SLO thresholds. The persistence of these failures is consistent with the hypothesis that the 85 tractors were never returned to the Stonefield fleet.
Third, the cure response's silence about the tractor withdrawal, combined with VHC-008417's evidence that VTS's COO was aware of the withdrawal and its expected impact, suggests that VTS's cure response was not a good-faith effort to address the identified deficiencies but rather a strategic document designed to run out the cure clock while maintaining the fiction that external factors were to blame. This bolsters both the unclean hands defense and the argument that Stonefield's termination for Cause was justified.
V. Implications for Damages Analysis
Vantor's Amended Complaint asserts total damages of approximately $95.4 million across four categories. VHC-008417 has significant implications for each.
A. Impact on Liquidated Damages Claim ($67.23M)
Vantor's primary damages claim is for liquidated damages under TSA Section 14.2. That section provides that "in the event SLG terminates this Agreement other than 'for Cause' as defined in Section 13.1(a), SLG shall pay to VTS liquidated damages in an amount equal to seventy-five percent (75%) of the Annual Committed Volume for each full Contract Year remaining in the Term, plus a pro rata amount for any partial Contract Year." The key operative phrase is "other than 'for Cause'" — liquidated damages are payable only if Stonefield's termination was not a valid termination for Cause.
Vantor calculates its liquidated damages claim as follows:
If Stonefield's termination was a valid termination for Cause under Section 13.1(a), Vantor is not entitled to any liquidated damages under Section 14.2. This is a binary outcome: either the termination was for Cause and liquidated damages are zero, or it was not for Cause and liquidated damages are $67.23 million. VHC-008417 materially strengthens the argument that the termination was for Cause, by demonstrating that the Q4 2021 SLO failures that triggered the Cure Notice were genuine, were caused by VTS's own conduct, and were not cured within the cure period. This substantially reduces the expected value of Vantor's liquidated damages claim on any risk-adjusted basis.
B. Impact on Lost Profits Claim ($18.7M)
In the alternative to liquidated damages, Vantor claims lost profits of $18.7 million, calculated as VTS's average operating margin of approximately 12% on Stonefield freight applied to the remaining committed volume over the balance of the TSA Term. Specifically, Vantor claims 12% × $43.2M ACV × 3.6 remaining years = approximately $18.7 million.
VHC-008417 undermines the causation element of this claim. Lost profits are recoverable only where the plaintiff can establish that the losses were caused by the defendant's breach — not by the plaintiff's own conduct. See Kenford Co. v. County of Erie, 73 N.Y.2d 312, 319 (1989). Here, VTS's loss of the Stonefield contract was the direct result of VTS's own decision to withdraw fleet capacity, conceal the withdrawal, and fail to cure the resulting performance deficiencies. Stonefield's termination — the proximate cause of VTS's lost revenue — was a valid exercise of contractual rights triggered by VTS's own breach. Lost profits flowing from self-inflicted harm are not recoverable.
Additionally, as analyzed in our memorandum dated February 15, 2023, the liquidated damages claim and the lost profits claim are duplicative: both seek to compensate VTS for the same lost contract value over the same remaining Term. Under New York law, a plaintiff may not recover both liquidated damages and lost profits arising from the same breach. See Kestrel Corporation, 4 N.Y.3d 373, 381 (2005). Vantor appears to plead these as alternative theories, but the availability of either is undermined by VHC-008417.
C. Impact on Consequential Damages Claims ($9.47M)
Vantor asserts three categories of consequential damages:
These claims face a threshold contractual barrier: TSA Section 15.1 contains a mutual waiver of consequential damages, providing that "in no event shall either party be liable to the other for any indirect, incidental, special, consequential, or punitive damages arising out of or related to this Agreement, including but not limited to loss of revenue, loss of profits, loss of business, or cost of replacement services." As analyzed in our memorandum dated April 5, 2023, this waiver likely bars all three categories of consequential damages claimed by Vantor. While Vantor may argue that the waiver does not apply to claims arising from a wrongful termination (as opposed to a termination for Cause), this argument is circular — it assumes the termination was wrongful, which is the ultimate merits question.
VHC-008417 provides additional grounds for defeating these claims on the merits. The "stranded assets" claim — that VTS was left with tractors and trailers dedicated to Stonefield freight that could not be redeployed after termination — is directly contradicted by the email's revelation that VTS had already redeployed 85 tractors to serve another customer's commitments before termination. VTS cannot simultaneously claim that it proactively redeployed assets to serve other customers (as VHC-008417 establishes) and that it was left with stranded assets that had no alternative use (as its consequential damages claim asserts). At a minimum, the 85 redeployed tractors and their associated trailers must be excluded from any stranded asset calculation.
D. Expert Rebuttal Implications
VHC-008417 should be promptly transmitted to Dr. Evelyn Rosser of Kensington Analytics Group LLC for incorporation into the rebuttal expert report, which is due August 25, 2023 under the Case Management Order entered by Judge Ostrander on February 3, 2023.
The document supports the key conclusions of Dr. Rosser's draft analysis, which the undersigned has reviewed in consultation with Dr. Rosser's team:
•  If termination was valid for Cause: Vantor is entitled to $0 in damages under any theory, because Section 14.2 (liquidated damages) applies only to terminations "other than for Cause," and lost profits and consequential damages are barred by the consequential damages waiver and, independently, by VTS's own causal contribution to the termination.
•  Under alternative lost-profits theory: Even if the termination were deemed wrongful, Dr. Rosser's analysis demonstrates that maximum recoverable damages are approximately $8.2 million after adjustments for VTS's failure to mitigate, inflated operating margin assumptions in Dr. Trask's model, and proper prorating of the remaining Term.
•  Failure to mitigate: VHC-008417 supports the argument that VTS failed to mitigate its damages by taking affirmative steps that caused the termination in the first instance. A party cannot create the conditions for its own loss and then claim failure to mitigate against the counterparty.
VHC-008417 should also be used in the rebuttal report to critique the damages analysis prepared by Vantor's expert, Dr. Philip Trask of Trask Greystone & Associates, whose report was served on May 15, 2023. Dr. Trask's report assumes that all $95.4 million in claimed damages are recoverable and does not account for VTS's own breaches, the first-to-breach doctrine, or the consequential damages waiver. The Trask report treats the termination as wrongful without analyzing the factual basis for the Cause determination and assumes 100% probability of recovery on the liquidated damages claim. VHC-008417 provides a factual basis for challenging these assumptions and substantially reducing Dr. Trask's damages figures.
VI. Anticipated Counterarguments and Risk Assessment
A. Vantor's Likely Counterarguments
We anticipate that Vantor, through Caldwell Royce & Shapiro LLP, will advance several counterarguments to diminish the impact of VHC-008417. We address each below.
1. "The tractor withdrawal was temporary and commercially necessary." Vantor may argue that VTS temporarily reassigned tractors to serve another customer's urgent needs, with the intention of returning them to the Stonefield fleet once the temporary demand was met, and that this was a commercially reasonable operational decision in light of Stonefield's volume shortfalls, which were reducing VTS's SLG-dedicated revenue.
Response: The email provides no indication that the withdrawal was intended to be temporary. Milescu does not describe the reassignment as short-term, does not reference any plan to return the tractors, and does not set a timeline for restoration of fleet capacity. To the contrary, the language "SLG won't notice until January" suggests an indefinite reassignment accompanied by a strategy for concealment — not a temporary, good-faith operational adjustment. Moreover, there is no evidence in the record that the 85 tractors were ever returned to SLG dedicated lanes prior to the January 18, 2022 Cure Notice. The February 14, 2022 cure response does not reference any return of tractors, and Q4 2021 and March 2022 equipment availability data shows continued shortfalls consistent with the tractors remaining deployed elsewhere. Finally, even if the withdrawal were temporary, TSA Section 7.2 required prior written consent for any reassignment or redeployment of dedicated fleet equipment, and no such consent was sought.
2. "SLG's volume shortfalls caused VTS to redeploy assets." Vantor may argue that Stonefield's failure to tender sufficient volume under the ACV commitment reduced VTS's SLG-related revenue to a level that made it economically unsustainable to maintain the full dedicated fleet, effectively forcing VTS to redeploy assets to generate revenue from other sources.
Response: As discussed in Section III.B above, the email does not cite SLG volume shortfalls as the reason for the withdrawal; it states the tractors were pulled "to cover [redacted] commitments." Additionally, the force majeure adjustment demonstrates that CY2 ACV was exceeded by $10.2 million, and the CY3 shortfall is disputed as to prorating. Even if there were a revenue shortfall, the proper contractual remedy was to invoke the dispute resolution provisions of TSA Section 16 or to provide notice under Section 7.2 — not to unilaterally strip dedicated fleet capacity and conceal the action.
3. "The email is taken out of context." Vantor may argue that VHC-008417 is a single email, taken out of context, and that the surrounding email chain (which does not appear to have been produced) provides additional context that explains or mitigates Milescu's statements. Vantor may produce additional emails or documents showing that the withdrawal was discussed with Stonefield, was part of a broader operational plan, or was reversed shortly after November 12, 2021.
Response: This is a legitimate risk at the moderate level. The face of VHC-008417 reflects a subject line of "Re: SLG fleet — ops update," suggesting it is part of a larger email chain. The preceding emails in the chain were not included in the first production. We have demanded production of the full email chain in correspondence dated May 10, 2023, and our Second RFP (served May 5, 2023) specifically requests all communications concerning fleet allocation, redeployment, or reassignment relating to SLG dedicated equipment. However, even if additional context is produced, the core language of VHC-008417 — particularly "SLG won't notice until January" — is difficult to explain away in any context. No amount of surrounding correspondence can transform a statement of deliberate concealment into an innocent operational communication.
4. "85 tractors alone don't account for the full decline to 248 available tractors." Vantor may concede that 85 tractors were withdrawn but argue that the remaining shortfall (approximately 67 additional tractors below the 400-unit commitment, for a total deficit of 152 tractors) was attributable to the driver shortage, maintenance cycles, and other factors beyond VTS's control. In this framing, the tractor withdrawal was one contributing factor among many, and VTS's performance failures would have occurred regardless.
Response: This argument has some factual basis — 85 tractors account for approximately 55.9% of the total 152-tractor deficit, not 100%. However, several responses are available. First, even if 85 tractors is not the sole cause, the withdrawal constitutes an independent material breach of TSA Section 7.1, regardless of whether other factors also contributed to the shortfall. A party that breaches a contract cannot avoid liability by arguing that its breach was only partially responsible for the harm. Second, the 85-tractor withdrawal was a substantial contributing factor — it represents over half the total deficit and pushed equipment availability well below the SLO threshold. Third, the deliberate and concealed nature of the withdrawal distinguishes it qualitatively from the other contributing factors: a driver shortage is an external market force, but a secret fleet redeployment is an intentional breach. Fourth, the remaining shortfall (approximately 67 additional tractors) may also be attributable in whole or in part to VTS management decisions rather than external forces — this is a question to be explored in further discovery and depositions.
B. Risk Assessment
Authenticity Risk: Low. VHC-008417 was produced by Vantor from its own custodial files as part of its first document production. The document was produced without any privilege designation, and no challenge to its authenticity has been raised or is anticipated. The metadata is consistent with the face of the document, and the email addresses, formatting, and content are consistent with other VTS internal communications produced in the same collection.
Admissibility Risk: Low. The email is a statement by a party opponent's agent or employee. Sandra Milescu, as COO of VTS, was acting within the scope of her employment and on a matter squarely within the scope of her authority — fleet operations and capacity management — when she authored the email. The email is therefore admissible as a non-hearsay party admission under Federal Rule of Evidence 801(d)(2)(D), which provides that a statement is not hearsay if it is "offered against an opposing party and was made by the party's agent or employee on a matter within the scope of that relationship and while it existed." No foundation witness is required for admission under this rule, although we may wish to authenticate the document through a deposition witness or a records custodian declaration as a precautionary measure.
Contextual Risk: Moderate. As discussed in Section VI.A.3 above, there is a moderate risk that Vantor will produce additional documents providing context for the Milescu email — either the full email chain, fleet redeployment records, or communications suggesting the withdrawal was temporary or was later reversed. Calderwood & Harkness should pursue aggressive supplemental discovery, including the Second RFP (already served May 5, 2023 and ordered by the Court on June 9, 2023), to obtain fleet redeployment records, communications with the [redacted] customer, internal VTS fleet management documents, and the complete email chain surrounding VHC-008417. We should be prepared for the possibility that additional documents may complicate but are unlikely to neutralize the impact of the email's core language.
VII. Cross-Reference with Deposition Strategy
VHC-008417 should be integrated into the deposition preparation for all four scheduled depositions in this matter. The document provides a factual foundation for lines of questioning that will be difficult for witnesses to deflect.
Sandra Milescu (deposition date to be scheduled). As the author of VHC-008417, Milescu is the most critical deposition witness on this issue. The email should serve as the primary exhibit in her deposition. Key lines of questioning include:
(a) Who made the decision to withdraw the 85 tractors from SLG dedicated lanes? Was it Milescu's decision, or was she implementing a directive from Vantorovich or another executive?
(b) When exactly were the tractors redeployed? The email references the withdrawal in the past tense as of November 12, 2021 — was the redeployment completed in October 2021, or earlier?
(c) To which customer account were the tractors reassigned? What are the "[redacted] commitments" referenced in the email? What is the identity of the customer whose commitments were being covered?
(d) Why was Stonefield not notified of the tractor withdrawal, as required by TSA Section 7.2?
(e) What did Milescu mean by "SLG won't notice until January"? How did she determine that Stonefield would not notice? Was this a deliberate decision to conceal the withdrawal?
(f) Were the 85 tractors ever returned to SLG dedicated lanes? If so, when? If not, why not?
(g) Was Milescu aware that Derek Pruitt's February 14, 2022 cure response did not disclose the tractor withdrawal? Did Milescu review or approve the cure response before it was sent? Did anyone instruct Pruitt not to disclose the withdrawal?
Nikolai Vantorovich (deposition date to be scheduled). As the recipient of VHC-008417 and the CEO and controlling shareholder of Vantor, Vantorovich should be questioned about:
(a) His knowledge and approval of the tractor withdrawal — did he authorize it, or was he merely informed after the fact?
(b) His involvement in the decision to redeploy fleet assets to the [redacted] customer — was this a corporate-level strategic decision?
(c) Whether he directed or approved the decision not to notify Stonefield of the withdrawal.
(d) His response to Milescu's email — did he approve the withdrawal, question it, or direct any particular course of action?
(e) Whether he was aware that the cure response omitted any reference to the tractor withdrawal.
(f) His understanding of VTS's obligations under TSA Section 7.1 to maintain committed fleet capacity.
Derek Pruitt (deposition scheduled July 10, 2023). Pruitt authored the February 14, 2022 cure response. He should be examined on:
(a) Whether he was aware of the 85-tractor withdrawal at the time he drafted and sent the cure response.
(b) Whether Milescu, Vantorovich, or any other VTS executive informed him of the withdrawal before, during, or after the cure period.
(c) Whether anyone instructed him to omit any reference to the tractor withdrawal from the cure response.
(d) On what factual basis he represented to Stonefield that VTS had "substantially cured" the identified deficiencies, and whether that representation was accurate.
(e) Whether he was aware, at the time of the cure response, that the performance failures were attributable to an internal fleet redeployment decision rather than external factors.
Raymond Hess (deposition scheduled July 27, 2023). As Director of Contract Compliance at Stonefield and the author of the January 18, 2022 Cure Notice, Hess should be questioned to confirm:
(a) That Stonefield was never notified by VTS of the 85-tractor withdrawal, either before or after the Cure Notice.
(b) That the performance metrics identified in the Cure Notice were derived from VTS's own data reported through the Carrier Performance Portal, and that those metrics reflected the impact of the fleet reduction without attributing the decline to any specific cause.
(c) That Stonefield's termination decision was based on the documented SLO failures and VTS's failure to cure within the 30-day period, not on any pretext or ulterior motive.
(d) That Stonefield first learned of the tractor withdrawal through the document production in this litigation (if that is the case), which would further underscore the effectiveness of VTS's concealment.
VIII. Recommendations
Based on the foregoing analysis, the undersigned recommends the following action items, organized by priority and timeline:
1. Priority Exhibit Designation. Designate VHC-008417 as a Tier 1 exhibit for all purposes, including summary judgment briefing, trial preparation, and mediation (if applicable). This document should be included in the core exhibit set that is flagged for all team members and incorporated into the master trial binder. The document should be reproduced and maintained in both native format and TIFF image format for use in depositions and court filings.
2. Expert Coordination. Transmit VHC-008417 and all related fleet records currently in our possession to Dr. Evelyn Rosser at Kensington Analytics Group LLC for immediate incorporation into the rebuttal expert report. The rebuttal report is due August 25, 2023 under the Case Management Order. This transmission should be accompanied by the analysis set forth in this memorandum (subject to work product protections) and by the reference memorandum to Kensington Analytics Group dated May 25, 2023 regarding rebuttal issues identified in Dr. Trask's report.
3. Supplemental discovery. Press vigorously for production of fleet redeployment records responsive to Stonefield's Second Request for Production of Documents, Nos. 1 through 5, served May 5, 2023. Vantor has objected to these requests as overbroad per the May 30, 2023 meet-and-confer, and we should be prepared to move to compel if Vantor does not produce responsive documents by the June 30, 2023 court-ordered deadline. The specific discovery priorities are: (a) the identity of the [redacted] customer account to which the 85 tractors were redeployed; (b) the full email chain surrounding VHC-008417, including any antecedent and responsive emails; (c) VTS internal fleet management documents showing tractor and trailer assignments, redeployments, and capacity reports for the period September 2021 through March 2022; and (d) any VTS contracts, commitments, or communications with the [redacted] customer during the same period. We should also demand an unredacted version of VHC-008417 to identify the customer name.
4. Deposition Preparation. Build deposition outlines for Sandra Milescu and Nikolai Vantorovich around VHC-008417 as a foundational exhibit. The Milescu deposition should be scheduled as soon as practicable; we should propose dates within the next 60 days. Prepare the Derek Pruitt deposition examination (scheduled July 10, 2023) with a dedicated section on the cure response omission, using VHC-008417 as the primary impeachment exhibit. Coordinate with the team preparing the Raymond Hess deposition outline (scheduled July 27, 2023) to ensure that Stonefield's lack of knowledge regarding the tractor withdrawal is established on the record.
5. Legal Briefing. Update the first-to-breach doctrine research memorandum (dated March 15, 2023) and the pretextual termination research memorandum (dated October 7, 2022) to incorporate the factual findings from VHC-008417. These updated memoranda will feed directly into the summary judgment roadmap. Consider whether VHC-008417 warrants filing an early partial summary judgment motion on the termination-for-Cause defense prior to the close of all expert discovery, or whether it is more strategically advantageous to present the full evidentiary picture in a comprehensive motion after the rebuttal expert report is served.
6. Client Reporting. Include the analysis of VHC-008417 in the next monthly status report to Tobias Wren, General Counsel of Stonefield Logistics Group Inc. Provide an update to Ridgeline Capital Partners — specifically to Alison Trang (Managing Director) and Douglas Whitmore (Associate General Counsel) — regarding the materially strengthened case posture resulting from this discovery. The update to Ridgeline should be coordinated with Tobias Wren and should emphasize the expected impact on the risk-adjusted damages exposure and overall case valuation.
7. Privilege Protection. Ensure that this analysis memorandum, and all related attorney work product reflecting mental impressions, conclusions, and legal theories, is not inadvertently produced in any subsequent document production. This memorandum should be maintained on the firm's internal privilege log. If any challenge to work product protection arises, the memorandum is protected under the work product doctrine, Fed. R. Civ. P. 26(b)(3), as a document prepared in anticipation of litigation reflecting the mental impressions, conclusions, opinions, and legal theories of counsel. The heightened protection for opinion work product under Hickman v. Taylor, 329 U.S. 495 (1947), and its progeny, should apply.
IX. Conclusion
VHC-008417 is the single most significant document recovered in discovery to date in Vantor Holdings Corp. v. Stonefield Logistics Group Inc. It transforms the factual narrative of this case from the version advanced in Vantor's Amended Complaint — in which Stonefield caused VTS's performance failures through volume shortfalls and then pretextually terminated the TSA to avoid contractual rate increases — to the version that the facts now support: VTS intentionally reduced its dedicated fleet capacity by withdrawing 85 tractors to serve another customer, deliberately concealed the withdrawal from Stonefield, failed to cure the resulting performance deficiencies when they were identified, and was validly terminated for Cause under TSA Section 13.1(a).
The email's evidentiary value extends across virtually every contested issue in this litigation. It supports the defense that the termination was a valid exercise of Stonefield's contractual rights for Cause. It provides the factual predicate for the first-to-breach defense under New York law. It establishes the inequitable conduct necessary for the unclean hands defense. It demonstrates that VTS failed to cure because the cure response concealed the root cause of the performance failures. It undermines Vantor's pretext theory by establishing that the SLO failures were genuine and self-inflicted. And it materially weakens Vantor's entire damages case — $95.4 million across liquidated damages, lost profits, and consequential damages — by establishing that VTS's losses were the product of its own deliberate conduct, not Stonefield's breach.
The follow-up work streams identified in Section VIII above — supplemental discovery, deposition preparation, expert coordination, legal briefing updates, and client reporting — should be initiated immediately. I am available to discuss this memorandum and the recommended next steps at your earliest convenience.
Prepared by: Simone Laroche, Associate, Calderwood & Harkness LLP Matter No.: 1012-00005 PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
Field | Detail
Bates Number | VHC-008417
Document Type | Email (single page)
Date | November 12, 2021, 9:47 PM EST
From | Sandra Milescu, Chief Operating Officer, Vantor Holdings Corp. / Vantor Transport Services LLC
To | Nikolai Vantorovich, Chief Executive Officer and Founder, Vantor Holdings Corp.
CC | None
Subject Line | "Re: SLG fleet — ops update"
Attachments | None reflected on face of document
Production Source | Vantor's First Document Production, served by Caldwell Royce & Shapiro LLP on April 28, 2023, pursuant to Stonefield's First Request for Production of Documents
Privilege Designation | None — document was produced without redaction or privilege designation and does not appear on Vantor's privilege log (served May 1, 2023)
Date | Event
March 15, 2019 | TSA executed between Stonefield and VTS (Contract Year 1 begins April 1, 2019)
April 1, 2020 | Contract Year 2 begins
April 6, 2020 | Stonefield invokes force majeure under TSA Section 12.1 due to COVID-19 pandemic
September 30, 2020 | Force majeure period ends; adjusted CY2 ACV = $21.6M (= $43.2M × 6/12)
March 31, 2021 | Contract Year 2 ends; Stonefield tenders $31.8M in freight volume (exceeding adjusted ACV by $10.2M)
April 1, 2021 | Contract Year 3 begins
September 22, 2021 | Janet Kirkwood (VP, Carrier Relations, Stonefield) emails Carlos Medina (SVP, Operations, Stonefield) noting emerging VTS performance issues and that Stonefield was moving volume to Cascade and Briarwood on Lanes 8–14 (Secondary Lanes). This is the email Vantor identifies as evidence of Stonefield's premeditated termination plan — but it postdates the onset of VTS performance problems and, critically, predates the tractor withdrawal confirmed by VHC-008417
October 2021 (approx.) | VTS pulls 85 tractors off SLG dedicated lanes per Milescu email
November 12, 2021 | Milescu email to Vantorovich (VHC-008417)
November–December 2021 | 16 cargo claims filed against VTS, totaling $387,400 in claimed damages, yielding a claims ratio of approximately 1.07% (vs. ≤0.5% SLO threshold under Schedule B, Section 4)
Q4 2021 (Oct.–Dec.) | All five VTS performance metrics fall below SLO thresholds: (1) On-Time Pick-Up: 71.3% (SLO: ≥92%); (2) On-Time Delivery: 68.7% (SLO: ≥90%); (3) Equipment Availability: 62% (SLO: ≥85%); (4) Tender Acceptance Rate: 74.2% (SLO: ≥90%); (5) Cargo Claims Ratio: 1.07% (SLO: ≤0.5%)
January 18, 2022 | Stonefield Cure Notice issued by Raymond Hess (Director, Contract Compliance) to Sandra Milescu, identifying the five specific metrics failures and invoking TSA Section 13.1(a)
February 14, 2022 | VTS cure response from Derek Pruitt (VP, Business Development) to Janet Kirkwood, acknowledging "operational challenges" but attributing failures to driver shortage, SLG volume shortfalls, and SLG's diversion of volume to spot market carriers — notably, no mention of VTS's tractor withdrawal
February 17, 2022 | 30-day cure period expires under TSA Section 13.1(a)
March 2022 | Post-cure-period performance data shows c

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