PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, NY 10166
LITIGATION HOLD ACKNOWLEDGMENT
Calderwood & Harkness Matter No. 1012-00005
Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No. 22-cv-07841 (S.D.N.Y.)
1. Acknowledgment of Receipt
I, Raymond Hess, hereby confirm that I have received and carefully reviewed the Litigation Hold Memorandum dated September 2, 2022 (the "Litigation Hold Memorandum"), prepared and issued by Patrick Gallagher of Calderwood & Harkness LLP, counsel for Stonefield Logistics Group Inc. ("Stonefield" or the "Company") in connection with the above-referenced matter.
I confirm that I understand the Litigation Hold Memorandum was issued in connection with the litigation captioned Vantor Holdings Corp. v. Stonefield Logistics Group Inc., which was filed in the United States District Court for the Southern District of New York and assigned Case No. 22-cv-07841 (the "Litigation"). I have read the Litigation Hold Memorandum in its entirety and understand the obligations described therein.
I further acknowledge that the Litigation Hold Memorandum was addressed not only to me but also to the following individuals at Stonefield Logistics Group Inc.:
• Tobias Wren, General Counsel;
• Priya Ramachandran, Chief Financial Officer;
• Carlos Medina, Senior Vice President, Operations; and
• Janet Kirkwood, Vice President, Carrier Relations.
I understand that each of these individuals has received the same Litigation Hold Memorandum and is subject to the same preservation obligations described therein. My acknowledgment herein pertains to my own individual obligations under the litigation hold and is made independently of any acknowledgment that may be provided by the other recipients.
2. Understanding of Preservation Obligations
I acknowledge and understand my obligation to preserve all documents and electronically stored information ("ESI") in my possession, custody, or control that relate to, or may reasonably relate to, the matters described in the Litigation Hold Memorandum. I understand that this preservation obligation arises from Stonefield's duty under federal law, including but not limited to Rule 37(e) of the Federal Rules of Civil Procedure, to take reasonable steps to preserve information that is relevant to anticipated or pending litigation.
I specifically understand that the preservation obligation covers all documents and ESI relating to the following categories and subject matters, which are described in greater detail in the Litigation Hold Memorandum:
(a) The Transportation Services Agreement dated March 15, 2019 (Contract Reference No. SLG-VTS-2019-0315) (the "TSA") between Stonefield Logistics Group Inc. and Vantor Transport Services LLC ("VTS"), including all schedules, exhibits, amendments, addenda, side letters, and attachments thereto, as well as any drafts, redlined versions, or negotiation correspondence relating to the execution of the TSA or any subsequent modifications thereof.
(b) All communications, whether written or electronic, with Vantor Holdings Corp. ("Vantor Holdings"), Vantor Transport Services LLC, or any of their respective officers, directors, employees, agents, consultants, or representatives, including but not limited to the following individuals:
• Sandra Milescu, Chief Operating Officer of Vantor Transport Services LLC;
• Derek Pruitt, Vice President, Business Development of Vantor Holdings Corp.;
• Nikolai Vantorovich, Chief Executive Officer of Vantor Holdings Corp.; and
• Gregory Fielding, Chief Financial Officer of Vantor Holdings Corp.
(c) The Cure Notice dated January 18, 2022, sent by me (Raymond Hess) to Sandra Milescu of VTS (the "Cure Notice"), together with all drafts, supporting analyses, data compilations, performance summaries, internal memoranda, and internal communications relating to the preparation, review, approval, and issuance of the Cure Notice. This includes, without limitation, any communications with Tobias Wren, Carlos Medina, Janet Kirkwood, or any other Stonefield personnel regarding the substance, timing, or strategic rationale of the Cure Notice.
(d) Vantor's response to the Cure Notice, dated February 14, 2022, from Derek Pruitt to Janet Kirkwood (the "Cure Response"), together with all internal Stonefield communications, memoranda, analyses, and assessments relating to the receipt, review, and evaluation of the Cure Response, including any determination as to whether the Cure Response constituted adequate cure of the identified performance deficiencies under the terms of the TSA.
(e) The Termination Letter dated March 4, 2022, from Tobias Wren, General Counsel of Stonefield, to Vantor Holdings Corp. and Vantor Transport Services LLC (the "Termination Letter"), including all drafts, redlined versions, internal comments, legal analyses, and internal communications relating to the decision to terminate the TSA and the preparation and issuance of the Termination Letter.
(f) All VTS performance data and metrics, for all periods during the term of the TSA and in particular for the fourth quarter of 2021 (October 1, 2021 through December 31, 2021), including but not limited to:
• On-time pickup rates (reported at 78.2% for Q4 2021);
• On-time delivery rates (reported at 81.6% for Q4 2021);
• Tender acceptance rates (reported at 71.4% for Q4 2021);
• Equipment availability data, including the reported availability of 62% of the committed fleet capacity of 400 tractors;
• Cargo claims data, including the sixteen (16) cargo claims filed during November and December 2021, totaling approximately $387,400 in claimed losses; and
• Any other performance metrics or key performance indicators ("KPIs") tracked or reported by Stonefield with respect to VTS's performance under the TSA.
(g) All documents and communications relating to Service Level Obligation ("SLO") monitoring, compliance assessments, performance reviews, performance improvement plans, and periodic or ad hoc performance reports relating to VTS, including any dashboards, scorecards, or tracking tools maintained by the Contract Compliance department or any other Stonefield department.
(h) All communications with Ashford Meridian LLP, including but not limited to attorneys Lorraine Beckwith and Troy Nakamura, regarding the TSA, the interpretation of any provision of the TSA (including without limitation Section 13.1(a) relating to termination for Cause, Section 7.2 relating to Service Level Obligations, and Section 9.4 relating to remedies for non-compliance), the cure process, the adequacy of VTS's cure efforts, and the termination decision. I understand that documents reflecting legal advice from Ashford Meridian LLP are likely subject to the attorney-client privilege, but that they must nonetheless be preserved and should be identified and segregated so that Calderwood & Harkness LLP may assess applicable privilege protections.
(i) All rate adjustment analyses, including any analyses, projections, models, or memoranda relating to the projected April 2022 rate adjustment under Section 5.3 of the TSA (the "Rate Adjustment Mechanism"), and any communications regarding the anticipated financial impact of such rate adjustment on either party to the TSA.
(j) All volume tender records and data showing freight volumes tendered to VTS under the TSA, including Annual Committed Volume records for Contract Year 1 (approximately March 15, 2019 through March 14, 2020), Contract Year 2 (approximately March 15, 2020 through March 14, 2021), and Contract Year 3 (approximately March 15, 2021 through March 14, 2022), together with any analyses, reports, or communications regarding compliance with minimum volume commitments set forth in the TSA.
(k) All force majeure notices, declarations, responses, and communications relating to COVID-19 impacts on freight demand, carrier capacity, or operational performance during the period from approximately April 2020 through September 2020, including any invocation of force majeure provisions under the TSA by either party, and any analyses of the applicability or scope of such provisions.
(l) All communications, contracts, rate confirmations, load tenders, and related documents concerning the use of alternative carriers, including but not limited to Cascade Freight Systems Inc. and Briarwood Trucking Co., on any lanes covered by the TSA, whether designated as Primary Lanes or Secondary Lanes as defined in Schedule C to the TSA, and whether such use occurred before, during, or after the cure period.
(m) Vantor's pre-suit demand letter dated April 8, 2022, together with Stonefield's response thereto dated April 29, 2022, and all internal communications, analyses, and drafts relating to the receipt and review of the demand letter and the preparation of Stonefield's response.
(n) All documents, communications, notes, and memoranda relating to the executive negotiation sessions conducted on May 16, 2022 and June 3, 2022 pursuant to Section 16 of the TSA (the "Dispute Resolution" provision), including any proposals, counterproposals, settlement terms, or summaries of discussions exchanged or prepared in connection with those sessions.
(o) Any other documents or ESI that may be relevant to the claims, defenses, counterclaims, or subject matter of the Litigation, as I may identify them from time to time or as may be further specified by Calderwood & Harkness LLP.
I understand that the foregoing list is illustrative and not exhaustive, and that my obligation to preserve extends to all potentially relevant materials, whether or not specifically enumerated above. If I become aware of any category of documents or ESI that may be relevant to the Litigation but is not addressed above, I will promptly bring it to the attention of Patrick Gallagher at Calderwood & Harkness LLP or Tobias Wren, General Counsel of Stonefield.
3. Categories of Materials to Be Preserved
I acknowledge that the preservation obligation described in Section 2 above extends to all formats and media in which documents and ESI may exist, including but not limited to the following:
(a) Emails (including all attachments), whether sent, received, or maintained in draft form, residing on Stonefield's corporate email system (including Hollowell Systems, Exchange, or any successor platform), as well as any personal email accounts that I may have used at any time for Stonefield business purposes;
(b) Text messages (SMS and MMS), instant messages (including messages sent or received through any messaging platform such as Northgate Data Systems, Meridian Solutions, or similar applications), and any other form of electronic communication;
(c) Hard-copy correspondence, memoranda, notes (including handwritten notes, whether maintained in notebooks, on loose-leaf paper, or on sticky notes), and printed reports;
(d) Spreadsheets, databases, data compilations, and analytical models, including data from VTS's Carrier Performance Portal or any internal Stonefield systems, tools, or platforms used to track, compile, or analyze VTS performance metrics;
(e) Contracts, amendments, schedules, exhibits, addenda, side letters, and all other transactional documents relating to the TSA or any other agreement between Stonefield and Vantor or VTS;
(f) Calendar entries, meeting invitations, and meeting notes relating to Vantor, VTS, the TSA, or any of the subject matters described in Section 2 above;
(g) Voicemail messages, whether stored on Stonefield's telephone or voicemail systems, on personal mobile devices, or on any cloud-based voicemail platform;
(h) Documents and ESI stored on local drives (including C: drives on desktop or laptop computers), network drives, shared drives, departmental drives, portable storage devices (including USB drives, external hard drives, and similar media), cloud storage services (including Cobalt Ridge Systems, Aldermere Systems, Hollowell Health IT, Larkspur Technologies, or similar platforms), and any personal devices (including personal laptops, tablets, and mobile phones) that I may have used for Stonefield business purposes at any time.
I understand that my preservation obligation is not limited to the categories of formats and media listed above and extends to any format or medium in which potentially relevant documents or ESI may exist.
4. Specific Commitments
In furtherance of my preservation obligations, I hereby commit to the following:
(a) I will not delete, destroy, alter, modify, overwrite, or discard any documents or ESI within the scope of the litigation hold as described in this Acknowledgment and in the Litigation Hold Memorandum. I understand that this prohibition applies regardless of whether the documents or ESI are stored on Stonefield systems, personal devices, cloud platforms, or any other medium.
(b) I will not alter, modify, or reconfigure any settings on my devices, accounts, or applications that would result in the automatic deletion, purging, overwriting, or destruction of potentially relevant materials. This includes, without limitation, settings governing email retention periods, auto-archive functions, auto-delete functions, messaging app settings, and any scheduled cleanup or disposal protocols applicable to my files or accounts.
(c) I will take affirmative steps to preserve documents and ESI within the scope of the litigation hold, including segregating and securing any hard-copy files in my possession that relate to the matters described herein. Where appropriate, I will make backup copies of electronic files stored on personal devices or in locations that may not be captured by Stonefield's standard backup and archiving systems.
(d) I will promptly notify Patrick Gallagher at Calderwood & Harkness LLP (telephone: (212) 555-4900; email: pgallagher@calderwoodharkness.com) or Tobias Wren, General Counsel of Stonefield Logistics Group Inc., if I become aware of any actual or potential destruction, loss, alteration, or spoliation of relevant materials, whether accidental or intentional, or if I identify additional repositories, custodial sources, or categories of potentially relevant materials not previously identified in this Acknowledgment or in the Litigation Hold Memorandum.
(e) I will cooperate fully with Calderwood & Harkness LLP and with Pinnacle Forensics LLC, the electronic discovery vendor retained by Stonefield and Calderwood & Harkness LLP for this matter, in connection with the identification, collection, imaging, processing, and review of documents and ESI. I understand that such cooperation may include providing access to my devices and accounts, responding to inquiries regarding my document storage practices, and participating in custodian interviews as requested.
(f) I will promptly inform Patrick Gallagher at Calderwood & Harkness LLP and Tobias Wren if I receive any subpoena, document request, interrogatory, deposition notice, or any other form of communication from any third party (including Vantor Holdings Corp., Vantor Transport Services LLC, their counsel Caldwell Royce & Shapiro LLP, or any other party or non-party) relating to this Litigation or to any of the subject matters described in this Acknowledgment. I understand that I should not respond to any such communication without first consulting with Calderwood & Harkness LLP.
5. Acknowledgment of Ongoing Obligation
I understand that the litigation hold described in this Acknowledgment and in the Litigation Hold Memorandum is effective immediately upon my receipt of the Litigation Hold Memorandum on September 2, 2022, and will remain in full force and effect until I receive written notice from Calderwood & Harkness LLP or from Stonefield's General Counsel that the litigation hold has been formally released. I will not assume that the litigation hold has been released unless and until I receive such express written notice.
I further understand that the preservation obligation is ongoing and continuing in nature. As the Litigation progresses, the scope of the preservation obligation may be supplemented, expanded, narrowed, or otherwise modified by Calderwood & Harkness LLP to reflect developments in the case, including but not limited to the service of formal discovery requests, court orders regarding discovery, or the identification of additional relevant issues or custodians. I agree to comply with any such supplemental or modified instructions promptly upon receipt.
I understand and acknowledge that failure to comply with the litigation hold could result in serious adverse consequences for Stonefield Logistics Group Inc. in the Litigation. Such consequences may include, without limitation, adverse inference instructions, evidentiary sanctions, monetary penalties, or other sanctions that the Court may impose under Rule 37(e) of the Federal Rules of Civil Procedure or under the Court's inherent authority. I take this obligation seriously and am committed to fulfilling it completely and in good faith.
6. Identification of Key Repositories and Custodial Sources
In accordance with the instructions set forth in the Litigation Hold Memorandum, I have conducted an initial assessment of the repositories and custodial sources within my possession, custody, or control that may contain documents or ESI relevant to the Litigation. I hereby identify the following:
(a) Corporate Email Account. My Stonefield corporate email account (rhess@stonefieldlogistics.com), including all folders, subfolders, sent items, deleted items (to the extent recoverable), drafts, and archived emails maintained within that account.
(b) Network and Shared Drive Directories. Stonefield network and shared drive directories relating to the Contract Compliance department, including but not limited to departmental folders containing VTS performance tracking files, compliance assessment records, SLO monitoring reports, and correspondence files. I believe these files are stored on the Stonefield internal network under directory paths accessible to Contract Compliance department personnel.
(c) Hard-Copy Files. Hard-copy files maintained in my office at Stonefield's headquarters located at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. These hard-copy files include, without limitation:
• The original Cure Notice file, containing the executed Cure Notice, supporting documentation, and related correspondence;
• VTS performance tracking files, including printed performance reports, scorecards, and data summaries;
• TSA contract compliance binders, containing the executed TSA, all schedules and amendments, and compliance review documentation; and
• Miscellaneous correspondence and memoranda relating to VTS and the TSA.
(d) Contract Management System. Stonefield's contract management system, which is the internal database or platform where the TSA and related compliance records, contract milestones, and amendment histories are maintained. I have access to this system in my capacity as Director of Contract Compliance and can identify and retrieve relevant records stored therein.
(e) VTS Carrier Performance Portal. My access credentials to the VTS Carrier Performance Portal, as well as any reports, data exports, screenshots, or printed reports that I have downloaded, saved, or generated from the Portal at any time.
(f) Personal Devices. Any personal devices, including my personal laptop and personal mobile phone, to the extent that I have used such devices for Stonefield business communications at any time. I will work with Pinnacle Forensics LLC to ensure that any relevant materials on such devices are identified and preserved.
(g) Meeting Notes and Files — Ashford Meridian LLP. Notes and files from meetings with counsel at Ashford Meridian LLP, including Lorraine Beckwith and Troy Nakamura, regarding TSA interpretation, the cure process, and the termination decision. These materials may include handwritten notes, printed agendas, and electronic files, and may be located in both my hard-copy files and my corporate email account.
I understand that this list may not be exhaustive and that additional repositories or custodial sources may be identified as the document preservation and collection process proceeds. I commit to supplementing this identification promptly if I become aware of any additional locations or sources of potentially relevant materials.
7. Acknowledgment of Role as Key Custodian
I acknowledge that, in my capacity as Director of Contract Compliance for Stonefield Logistics Group Inc., I played a central role in the monitoring of VTS's performance under the TSA, the identification of performance deficiencies, and the initiation of the contractual cure process. Specifically, I was the individual who prepared and issued the Cure Notice dated January 18, 2022 to Sandra Milescu of VTS, and I was actively involved in the subsequent evaluation of VTS's cure efforts and in the internal deliberations that led to the decision to terminate the TSA.
I understand that, by virtue of this role, I am a key custodian in this Litigation. I recognize that the documents and ESI in my possession, custody, or control are likely to be among the most significant materials in the case, and that my testimony — whether by deposition, affidavit, or trial testimony — may be central to the defense of Stonefield's termination of the TSA for Cause under Section 13.1(a) of the TSA.
I hereby commit to making myself reasonably available to Calderwood & Harkness LLP for interviews, witness preparation sessions, and consultations as needed throughout the pendency of the Litigation. I further understand that I may be called upon to provide deposition testimony and, if necessary, trial testimony, and I commit to cooperating fully with Calderwood & Harkness LLP in preparing for and participating in such proceedings.
8. Confidentiality
I acknowledge and understand that all communications between me and Calderwood & Harkness LLP in connection with this matter, including but not limited to the Litigation Hold Memorandum and this Acknowledgment, are protected by the attorney-client privilege and/or the attorney work product doctrine. I will take all reasonable steps to maintain the confidentiality of such communications and to protect the applicable privileges.
I agree that I will not disclose the substance or content of any communications with Calderwood & Harkness LLP, or the content of the Litigation Hold Memorandum, to any person outside of Stonefield Logistics Group Inc. who is not covered by the attorney-client privilege, without prior written authorization from Tobias Wren, General Counsel of Stonefield, or from Calderwood & Harkness LLP. I understand that unauthorized disclosure of privileged communications could result in a waiver of the attorney-client privilege or the work product protection, which could have material adverse consequences for Stonefield in this Litigation.
Within Stonefield, I will limit any discussion of privileged communications to those individuals who have a need to know in connection with the Litigation and who are themselves covered by the privilege, unless otherwise instructed by Tobias Wren or Calderwood & Harkness LLP.
Acknowledgment and Signature
By signing below, I confirm that I have read this Litigation Hold Acknowledgment in its entirety, that I understand its contents and the obligations described herein, and that I agree to comply fully with all such obligations. I further confirm that the information set forth in Section 6 regarding my repositories and custodial sources is accurate and complete to the best of my current knowledge, and I commit to supplementing that information promptly if additional sources are identified.
ACKNOWLEDGED AND AGREED:
By: ________
Name: Raymond Hess
Title: Director, Contract Compliance
Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102
Date: September 5, 2022
Confirmation of Receipt by Counsel
RECEIVED AND CONFIRMED:
By: ________
Name: Patrick Gallagher
Title: Lead Associate, Litigation (General)
Calderwood & Harkness LLP 200 Park Avenue, 38th Floor New York, NY 10166
Date Received: ________
Copy to be filed in Calderwood & Harkness Matter No. 1012-00005 case file. Additional copies to be provided to Tobias Wren, General Counsel, Stonefield Logistics Group Inc., and to Pinnacle Forensics LLC for custodian tracking records.
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT This document and all information contained herein are protected by the attorney-client privilege and/or the attorney work product doctrine. Any unauthorized review, use, disclosure, or distribution of this document is strictly prohibited. If you have received this document in error, please notify Calderwood & Harkness LLP immediately and destroy all copies.
| Date: | September 5, 2022 |
| To: | Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP |
| From: | Raymond Hess, Director, Contract Compliance, Stonefield Logistics Group Inc. |
| Re: | Acknowledgment of Litigation Hold Obligations — Vantor Holdings Corp. v. Stonefield Logistics Group Inc., Case No. 22-cv-07841 (S.D.N.Y.) |