CALDERWOOD & HARKNESS LLP
NEW MATTER INTAKE FORM
Matter No. 1012-00005
CONFIDENTIAL — INTERNAL USE ONLY This document is intended solely for use by authorized personnel of Calderwood & Harkness LLP in connection with the opening and administration of the referenced client matter. This form contains confidential client information and is subject to the firm's obligations of confidentiality and, where applicable, the attorney-client privilege and work product doctrine. Do not distribute outside of the Records Department, Finance Department, or the designated engagement team without prior approval of the Responsible Partner.
Date Prepared: September 1, 2022
Prepared By: Helen Tsao, Senior Paralegal
Submitted To: C&H Records Department / Finance Department
SECTION 1: MATTER IDENTIFICATION
1.1 Assigned Matter Number
The following matter number has been assigned by the Records Department in accordance with the firm's matter numbering conventions. All timekeepers and support staff should reference this matter number on all time entries, disbursement requests, correspondence, filings, and internal memoranda relating to this engagement.
Assigned Matter No.: 1012-00005
1.2 Matter Open Date
Date Opened: September 1, 2022
This date corresponds to the execution of the engagement letter by the client and the commencement of active legal services by the firm. All time entries and costs incurred on or after this date should be billed to the above matter number.
1.3 Matter Title / Short Description
Matter Title: Vantor Holdings Corp. v. Stonefield Logistics Group Inc.
Short Description: Defense of breach of contract claim arising from termination of Transportation Services Agreement. The client, Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), is the defendant in this action. The plaintiff, Vantor Holdings Corp. ("Vantor"), alleges that Stonefield wrongfully terminated a five-year Transportation Services Agreement and seeks approximately $95.4 million in damages. Stonefield contends the termination was properly effectuated for cause based on sustained service level failures by Vantor's operating subsidiary.
1.4 Court / Tribunal / Forum
1.5 Matter Type / Practice Area
This matter falls within the firm's general commercial litigation practice. No specialized regulatory, intellectual property, or cross-border considerations have been identified at this time that would necessitate involvement of other practice groups, although coordination with the firm's Commercial Contracts practice may be required for TSA interpretation issues.
SECTION 2: CLIENT INFORMATION
2.1 Client / Entity Name
Full Legal Name: Stonefield Logistics Group Inc.
Short Name(s): Stonefield; SLG
Status as Client of Record: New litigation client. Stonefield Logistics Group Inc. is a portfolio company of Ridgeline Capital Partners, LP, which is an existing client of Calderwood & Harkness LLP. This engagement represents the first matter opened for Stonefield directly.
2.2 Entity Type and Jurisdiction
2.3 Client Identification Numbers
The EIN has been verified against the engagement letter and the client's most recently available IRS Form W-9. A copy of the W-9 is maintained in the client's records file.
2.4 Headquarters Address
Stonefield Logistics Group Inc. 4200 Commerce Parkway, Suite 800 Fort Worth, Texas 76102
The client's principal executive offices are located at the above address. Correspondence, invoices, and other formal communications should be directed to this address unless otherwise specified below or in the engagement letter.
2.5 Registered Agent
Capitol Registered Agents LLC 1209 Orange Street Wilmington, Delaware 19801
The registered agent's contact information is recorded for purposes of service of process and corporate records. The engagement team should note that service of process upon Stonefield in its capacity as a Delaware corporation may be effectuated through its registered agent. However, in the present action (filed in the Southern District of New York), service has been accepted through Stonefield's General Counsel.
2.6 Industry / Sector
Primary Industry: Transportation and Logistics
Sector Classification: Industrials
NAICS Code: 488510 (Freight Transportation Arrangement)
2.7 Client Overview
Stonefield Logistics Group Inc. is a mid-market freight brokerage, managed transportation, and supply chain solutions company operating across the continental United States with cross-border operations extending into Mexico and Canada. Stonefield does not own a proprietary truck fleet; rather, it operates as an asset-light freight brokerage and managed transportation provider, acting as an intermediary between shippers and a large network of third-party carriers. Stonefield currently manages an approved carrier network of approximately 12,000 carriers and handles roughly 850,000 shipments annually.
Stonefield's service offerings span multiple transportation modes, including truckload ("TL"), less-than-truckload ("LTL"), intermodal, and last-mile delivery services. The company's customer base is concentrated primarily in the industrial, retail, and consumer packaged goods sectors, with a diversified portfolio of over 400 active shipper-customers.
The following financial data reflects Stonefield's recent operating performance and scale:
The revenue decline from FY 2021 to FY 2022 is understood to be attributable in part to softening freight market conditions and the loss of volume previously handled through the Vantor relationship, among other factors. The engagement team should be mindful that Vantor may seek to attribute this revenue decline to the termination of the TSA in its damages analysis.
2.8 Ownership / Parent / Sponsor
Stonefield is a privately held company. Its majority equity owner is Ridgeline Capital Partners, LP, a Dallas-based private equity firm that acquired Stonefield in a leveraged buyout transaction that closed in October 2017. Ridgeline holds its equity interest through Ridgeline Fund III, LP, which owns approximately 72% of Stonefield's equity. The remaining equity is held by members of Stonefield's management team and certain co-investors.
The private equity ownership structure has implications for this matter in several respects, including reporting obligations to Ridgeline, board-level oversight of the litigation, potential privilege considerations for communications involving Ridgeline personnel, and the financial reporting and audit disclosure requirements described further in Section 14 below.
2.9 Primary Client Contacts
The following individuals are the designated primary contacts at Stonefield for purposes of this engagement. All substantive communications regarding litigation strategy, billing, and case developments should be directed through the General Counsel unless otherwise agreed.
Tobias Wren has been designated as the primary point of contact for day-to-day matters. Billing inquiries should also be directed to Mr. Wren in the first instance, with copies to Ms. Ramachandran as needed for budgeting and accrual purposes.
2.10 PE Sponsor Contacts (for Reporting)
In accordance with the engagement arrangement and as directed by the client, the following individuals at Ridgeline Capital Partners will receive periodic privileged status updates on the litigation. All such communications are to be transmitted at the direction of and through the client (Tobias Wren) to preserve the attorney-client privilege.
The engagement team should take care to ensure that all communications to Ridgeline personnel are clearly marked as privileged and confidential and are transmitted at the express direction of Stonefield's General Counsel in order to preserve privilege protections. No direct communication with Ridgeline personnel should occur without first consulting with Tobias Wren or the Responsible Partner.
SECTION 3: ADVERSE PARTY INFORMATION
3.1 Adverse Party — Plaintiff
Vantor Holdings Corp. is the named plaintiff in this action. Vantor is a privately held holding company that operates through several subsidiaries in the transportation, logistics, and fleet management sectors. Vantor was founded by Nikolai Vantorovich and, based on publicly available information, is understood to be majority-owned by Mr. Vantorovich and members of his family.
3.2 Adverse Party — Plaintiff Operating Subsidiary
Vantor Transport Services LLC is the operating entity that performed transportation services under the TSA. VTS is the signatory counterparty to the Transportation Services Agreement as the "Carrier-Provider," while Stonefield signed in the capacity of "Shipper-Broker." Although VTS is the contracting party, the Complaint has been filed by the parent entity, Vantor Holdings Corp., which asserts standing as the sole member and economic beneficiary of VTS. Stonefield may challenge Vantor Holdings Corp.'s standing as a threshold matter, although this issue requires further legal analysis by the engagement team.
The engagement team should note that VTS is the entity that actually performed (or failed to perform) under the TSA, and VTS personnel — including COO Sandra Milescu — are likely to be key fact witnesses in the litigation.
3.3 Adverse Party Counsel
Caldwell Royce & Shapiro LLP is a mid-size litigation boutique based in New York City. The firm is known for its commercial litigation practice, and Harrison Caldwell has particular experience in contract disputes in the transportation and logistics sector. All communications with the adverse party must be directed through Caldwell Royce & Shapiro, as Vantor is represented by counsel of record.
SECTION 4: ENGAGEMENT TEAM — CALDERWOOD & HARKNESS LLP
The following attorneys and support professionals have been assigned to this matter. Any changes to the engagement team must be approved by the Responsible Partner and communicated to the client. Timekeepers who do not appear below should not enter time to this matter number without prior authorization.
4.1 Responsible Partner
Mr. Eklund will serve as the Responsible Partner on this matter, with overall supervisory responsibility for the engagement, including strategic direction, key client communications, court appearances, and relationship management with Stonefield and Ridgeline Capital Partners. Mr. Eklund will serve as lead trial counsel in the event the matter proceeds to trial.
4.2 Billing Partner
Ms. Osei will serve as the Billing Partner with responsibility for invoice review, budgeting, rate administration, and billing compliance. Ms. Osei also supervised the conflicts clearance process and will oversee engagement economics and adherence to the agreed billing arrangements. In addition, Ms. Osei will serve as co-counsel on substantive motion practice, particularly with respect to dispositive motions.
4.3 Lead Associate
Mr. Gallagher will serve as the Lead Associate on this matter and will be responsible for day-to-day case management, including discovery coordination, deposition preparation, motion drafting, and regular communication with the client's General Counsel. Mr. Gallagher is also the designated Responsible Attorney for the litigation hold (see Section 12 below).
4.4 Working Associate
Ms. Laroche will assist with legal research, discovery review, deposition preparation, and drafting of court filings and memoranda of law.
4.5 Senior Paralegal
Ms. Tsao will provide paralegal support for the engagement, including document management, court filing logistics, factual research, witness coordination, and trial preparation. Ms. Tsao is also the preparer of this New Matter Intake Form.
4.6 Litigation Support / eDiscovery Manager
Mr. Moretti will serve as the eDiscovery Manager for this matter, responsible for coordination with Pinnacle Forensics LLC (the third-party eDiscovery vendor identified in Section 13 below), management of document collection and processing workflows, search term development, technology-assisted review protocols, and production logistics.
4.7 Contract Associate
Ms. Nystrom is a contract associate who will be assigned to the document review phase of this engagement. Her primary responsibility will be first-level document review, privilege logging, and coding of documents within the eDiscovery review platform. Ms. Nystrom's billing rate reflects the 10% courtesy discount applicable to associate-level timekeepers, as described in Section 7.2 below.
SECTION 5: CONFLICTS CLEARANCE
5.1 Conflicts Check Status
A conflicts check was initiated on August 25, 2022, upon receipt of the initial inquiry from Tobias Wren (General Counsel, Stonefield). The check was conducted by the firm's Conflicts Department in accordance with Calderwood & Harkness LLP's standard New Matter / New Client Conflict Review procedures. The search encompassed the firm's conflicts database, including all current and former clients, adverse parties, and related entities.
5.2 Conflicts Check Results
The conflicts check returned the following results:
1. Vantor Holdings Corp.: No prior or current matters involving Vantor Holdings Corp. or any of its known affiliates (including Vantor Transport Services LLC) were identified in the firm's conflicts database. No former representation. No adverse representation. Result: Clear.
2. Stonefield Logistics Group Inc.: No prior or current matters identified for Stonefield Logistics Group Inc. as a direct client of the firm. Stonefield is a portfolio company of Ridgeline Capital Partners, LP, which is an existing client of Calderwood & Harkness (see item 3 below). Result: Clear (new client intake required).
3. Ridgeline Capital Partners, LP: Ridgeline Capital Partners, LP is confirmed as an existing client of Calderwood & Harkness LLP. The firm has represented Ridgeline on fund formation matters (Matter Nos. 2019-CORP-02210 and 2021-CORP-03684) through the firm's Private Funds practice group. No conflict exists between representation of Stonefield in this litigation and the firm's representation of Ridgeline. Ridgeline, as the majority owner and PE sponsor of Stonefield, is aligned in interest with Stonefield in this matter. Clearance confirmed. Result: Clear.
4. Caldwell Royce & Shapiro LLP (adverse counsel): No conflicts identified with respect to the opposing law firm. Result: Clear.
Conclusion: No conflicts have been identified. The engagement has been approved. A copy of the Conflict Check Memorandum dated August 29, 2022 is maintained in the matter file and in the firm's central conflicts records.
SECTION 6: MATTER DESCRIPTION
6.1 Nature of Matter
This matter involves the defense of a breach-of-contract action filed by Vantor Holdings Corp. against Stonefield Logistics Group Inc. in the United States District Court for the Southern District of New York, Case No. 22-cv-07841. The case has been assigned to the Honorable Margaret T. Calloway, United States District Judge. The action arises from Stonefield's termination of a five-year Transportation Services Agreement with Vantor's operating subsidiary, Vantor Transport Services LLC. Calderwood & Harkness has been retained to defend Stonefield in this litigation.
6.2 Summary of Claims
Vantor's Complaint, filed on August 12, 2022, alleges the following principal claims and theories of liability:
(a) Wrongful Termination of the TSA. Vantor alleges that Stonefield wrongfully terminated the Transportation Services Agreement dated March 15, 2019 (TSA Contract Reference No. SLG-VTS-2019-0315). The TSA was a five-year agreement with a term running from April 1, 2019 through March 31, 2024. Stonefield issued a Notice of Termination for Cause on March 4, 2022, effective immediately, citing sustained service level failures by VTS in Q4 2021 that remained uncured following a 30-day Cure Notice dated January 18, 2022. Vantor contends that the purported termination for cause was pretextual, lacked contractual basis, and itself constituted a material breach of the TSA by Stonefield.
(b) Damages. Vantor claims approximately $95.4 million in total damages, which it categorizes as follows:
• Liquidated damages under Section 14.2 of the TSA;
• Lost profits for the remaining two-year term of the TSA (April 2022 through March 2024);
• Stranded asset costs related to trucks, trailers, and equipment that VTS dedicated to the Stonefield account;
• Workforce reduction costs arising from layoffs VTS claims were necessitated by the termination; and
• Mitigation costs incurred in seeking alternative business to replace the Stonefield account.
(c) Breach by Stonefield. Vantor asserts that Stonefield's purported termination for cause was pretextual and that Stonefield in fact terminated the TSA to avoid paying volume commitments (specifically, the Annual Contract Value or "ACV" minimums) during a period of softening freight demand. Vantor further alleges that Stonefield's own conduct, including the diversion of shipment volume to competing carriers during Q3 and Q4 2021, contributed to VTS's inability to meet the service level metrics cited in the Cure Notice.
6.3 Summary of Stonefield's Position / Defenses
Based on initial discussions with Tobias Wren and preliminary review of the underlying documents, Stonefield's principal defenses and positions are summarized as follows:
(a) Valid Termination for Cause. Stonefield terminated the TSA on March 4, 2022 pursuant to Section 13.1(a) of the TSA (Termination for Cause). The termination followed VTS's sustained failure to meet the contractually required service level obligations across all five performance metrics (on-time pickup, on-time delivery, cargo damage rate, billing accuracy, and claims response time) during Q4 2021. VTS's performance deficiencies were documented in monthly performance scorecards and quarterly performance review reports. Stonefield issued a formal 30-day Cure Notice to VTS on January 18, 2022, in strict compliance with Section 13.1(a). VTS failed to cure the identified deficiencies within the 30-day cure period, and Stonefield thereupon exercised its right to terminate for cause.
(b) Unenforceable Penalty Clause. Stonefield contends that the liquidated damages clause in Section 14.2 of the TSA constitutes an unenforceable penalty under applicable New York law. The liquidated damages formula bears no reasonable relationship to the actual or anticipated damages flowing from early termination, and the amounts generated by the formula are grossly disproportionate to any cognizable harm suffered by Vantor or VTS.
(c) Failure to Mitigate. Stonefield asserts that Vantor and VTS failed to take reasonable steps to mitigate their alleged damages following the termination. Available evidence suggests that VTS made little or no effort to redeploy its assets or seek alternative business during the months following the termination, despite the ready availability of alternative freight opportunities in the market during Q2 2022.
(d) VTS's Own Prior Material Breaches. Stonefield contends that VTS itself was in material breach of the TSA prior to and at the time of termination. Among other things, VTS engaged in an undisclosed fleet redeployment in Q3 2021, diverting trucks and drivers that were contractually committed to the Stonefield account to service other VTS customers. This undisclosed redeployment directly contributed to the service level failures that formed the basis for the Cure Notice and subsequent termination. VTS's own prior material breaches bar recovery under the TSA.
(e) Force Majeure / ACV Shortfall Defense. To the extent Vantor asserts any claims based on Stonefield's failure to meet the Annual Contract Value ("ACV") minimums during 2020, Stonefield contends that any such shortfall is excused by the force majeure provision of the TSA, which was properly invoked by Stonefield for the period April through September 2020 in connection with the COVID-19 pandemic and its impact on freight volumes.
6.4 Key Underlying Contract
The central document in this dispute is the Transportation Services Agreement, the key terms of which are summarized below:
The TSA is a comprehensive agreement governing the provision of dedicated and on-demand transportation services by VTS for Stonefield. Key provisions include service level agreements (Section 7), performance measurement and reporting (Section 8), ACV minimums and volume commitments (Section 9), termination provisions (Section 13), liquidated damages (Section 14.2), force majeure (Section 15), and limitations of liability (Section 16). A complete copy of the executed TSA, together with all amendments and exhibits, is maintained in the matter file.
6.5 Key Litigation Dates
The following dates are significant milestones in the matter through the date of this intake form:
Additional key dates, including the deadline for Stonefield's responsive pleading, the initial pretrial conference, and discovery deadlines, will be tracked on a separate litigation calendar maintained by Patrick Gallagher and Helen Tsao.
SECTION 7: BILLING & FEE ARRANGEMENT
7.1 Billing Arrangement
The 10% courtesy discount applies to all associate-level and contract associate-level timekeepers. The discount does not apply to partner-level billing rates or to paralegal rates. This arrangement is consistent with the standing rate agreement between Calderwood & Harkness LLP and Ridgeline Capital Partners, LP, which extends to all Ridgeline Fund III portfolio company engagements.
7.2 Billing Rates
The following billing rates are applicable to this engagement, effective as of September 1, 2022:
All rates are subject to annual adjustment in accordance with the firm's standard rate schedule, with advance notice to the client. Any additional timekeepers assigned to the matter will be billed at their then-current standard rates, subject to the applicable discount where the timekeeper qualifies under the discount arrangement.
7.3 Engagement Letter
A fully executed copy of the engagement letter is maintained in the matter file. The engagement letter sets forth the scope of the engagement (defense of the Vantor litigation), the applicable fee arrangement, the identification of the engagement team, and the firm's standard terms and conditions of engagement, including provisions relating to confidentiality, conflicts, and document retention.
7.4 Estimated Budget Range
The above estimates are preliminary and subject to revision based on case developments, including the scope of discovery, the number of depositions, and the extent of motion practice. A detailed Preliminary Litigation Budget memorandum will be prepared by Linda Osei and submitted to Tobias Wren and Priya Ramachandran for review. The budget estimates do not include fees and costs that would be incurred in the event the matter proceeds to trial. Trial budget estimates will be developed separately if and when appropriate.
The costs and disbursements estimate includes anticipated expenses for eDiscovery processing and hosting (Pinnacle Forensics LLC), expert witness fees (Kensington Analytics Group LLC), court reporting and deposition transcript costs, filing fees, travel expenses, and other litigation-related disbursements.
SECTION 8: RELATED MATTERS AND PRIOR COUNSEL
8.1 Prior / Related Counsel for Client on This Matter
Ashford Meridian LLP is Stonefield's regular outside commercial counsel and has served as Stonefield's primary transactional law firm since the Ridgeline acquisition in 2017. Ashford Meridian drafted the TSA and provided advice to Stonefield during the pre-termination period, including review of the Cure Notice and the Notice of Termination for Cause. Ashford Meridian also provided initial pre-litigation guidance to Stonefield following Vantor's filing of the Complaint. However, Ashford Meridian does not maintain a litigation practice and recommended retention of separate litigation counsel. Upon engagement of Calderwood & Harkness, Ashford Meridian's role with respect to this matter will transition to a supporting capacity, primarily as a resource on questions of TSA drafting history and intent.
The engagement team should coordinate with Ashford Meridian through Tobias Wren to obtain all relevant drafting files, negotiation correspondence, and pre-litigation advisory memoranda. A document request to Ashford Meridian should be prepared and issued promptly.
8.2 Related or Predecessor Matters at Calderwood & Harkness
None identified. This is the first matter opened by Calderwood & Harkness for Stonefield Logistics Group Inc. or relating to the Vantor relationship. The firm has not previously represented any party in connection with the TSA or any related agreements.
SECTION 9: INSURANCE COVERAGE
9.1 Directors & Officers (D&O) Insurance
Stonefield maintains a D&O liability insurance policy with Graymark Insurance Company. Because the Vantor Complaint names Stonefield as an entity defendant (and not individual directors or officers), the applicability of the D&O policy to this litigation will depend on the specific terms of the policy's entity coverage provisions, which are under review.
A tender letter is being prepared by Tobias Wren (with review by Samuel Eklund) for submission to Graymark on or about September 6, 2022. The tender will provide notice of the claim and request that Graymark acknowledge coverage and reimburse defense costs, subject to the terms and conditions of the policy. The engagement team should obtain and review the complete D&O policy (including all endorsements and exclusions) as part of the coverage analysis.
9.2 Commercial General Liability (CGL) Insurance
Stonefield's CGL policy is a standard commercial general liability policy that provides coverage for bodily injury and property damage claims. The policy does not extend coverage to breach of contract claims, and no tender of the Vantor litigation to Brindoval Mutual is anticipated. This determination is subject to confirmation upon review of the full policy.
SECTION 10: LENDER / CREDIT FACILITY NOTIFICATIONS
10.1 Credit Facility
Stonefield maintains a senior secured credit facility with the following terms relevant to this matter:
10.2 Notification Requirement
Section 6.03(b) of the Credit Agreement (as amended and restated) requires that Stonefield provide written notice to the Administrative Agent within ten (10) business days of becoming aware of any litigation, arbitration, or governmental investigation involving potential liability in excess of $25 million (individually or in the aggregate). The notice must describe the nature of the proceeding, the parties involved, and the amount of potential liability.
The claimed damages in this action total approximately $95.4 million, which significantly exceeds the $25 million notification threshold under Section 6.03(b). Accordingly, written notification to Lakeshore National Bank is required.
10.3 Notification Status
As of the date of this intake form, the notification letter to Lakeshore National Bank is in preparation. Tobias Wren is drafting the notification letter, which will be reviewed by Calderwood & Harkness (Samuel Eklund) prior to submission. The notification is expected to be sent on or about August 24, 2022, which falls within the 10 business day window following service of the Complaint on Stonefield.
The engagement team should follow up with Tobias Wren to confirm timely delivery of the notification and obtain a copy of the sent letter for the matter file. Failure to comply with the notification requirement could constitute a technical default under the Credit Agreement, and the engagement team should ensure that this obligation is fulfilled promptly.
SECTION 11: KEY CLIENT PERSONNEL (ANTICIPATED WITNESSES / DOCUMENT CUSTODIANS)
The following Stonefield personnel have been identified as individuals who are likely to have knowledge of facts relevant to this litigation and/or who are anticipated to be custodians of relevant documents and electronically stored information. This list is preliminary and may be expanded as the case develops and additional fact investigation is conducted.
All individuals listed above will be subject to the litigation hold described in Section 12 and will be identified as initial document custodians in the preservation and collection protocol.
SECTION 12: LITIGATION HOLD STATUS
12.1 Litigation Hold
Custodians to Receive Litigation Hold Notice:
1. Tobias Wren — General Counsel
2. Priya Ramachandran — Chief Financial Officer
3. Carlos Medina — SVP, Operations
4. Janet Kirkwood — VP, Carrier Relations
5. Raymond Hess — Director, Contract Compliance
The litigation hold notice will instruct each custodian to preserve all documents and electronically stored information ("ESI") in their possession, custody, or control that relate to the Vantor relationship, the Transportation Services Agreement (including all amendments, exhibits, and schedules), the performance of services under the TSA, the Cure Notice and cure process, the termination of the TSA, the post-termination negotiation sessions, and any related communications with Vantor, VTS, or their representatives. The hold will encompass all forms of documents and ESI, including emails, text messages, instant messages, voicemails, memoranda, reports, spreadsheets, presentations, calendars, and any other records, in any format, whether stored on company servers, personal devices, cloud-based storage, or any other medium.
Patrick Gallagher will coordinate with David Moretti (eDiscovery Manager) and Tobias Wren to ensure that the litigation hold is properly implemented, that all custodians acknowledge receipt, and that appropriate steps are taken to suspend any automatic deletion or records retention policies that might otherwise result in the destruction of potentially relevant materials. A follow-up hold reminder will be issued on a quarterly basis or more frequently as warranted.
The list of custodians is preliminary. Additional custodians may be identified as the investigation progresses and will be added to the hold at that time. In particular, the engagement team should evaluate whether Marcus Denton (CEO) should be added as a custodian, given his participation in the executive negotiation sessions, and whether any IT personnel or lower-level operational staff who interacted with VTS on a regular basis should also be included.
SECTION 13: THIRD-PARTY VENDORS (ANTICIPATED)
The following third-party vendors are anticipated to be engaged in connection with this matter. Vendor engagements will be formalized through appropriate engagement letters or statements of work, and all vendor costs will be passed through to the client as disbursements.
Pinnacle Forensics LLC has been tentatively selected as the eDiscovery vendor for this matter based on the firm's existing master services agreement with Pinnacle and Pinnacle's prior experience handling matters of comparable scale. Pinnacle will provide document processing, hosting, and a review platform (Relativity-based) for use by the engagement team and contract associates during the document review phase. David Moretti will serve as the primary point of contact with Pinnacle. A project kickoff call is anticipated in mid-September 2022 following issuance of the litigation hold and initial custodian interviews.
Kensington Analytics Group LLC has been identified as a potential damages expert for purposes of preparing a rebuttal damages analysis. Dr. Evelyn Rosser, a Managing Director at Kensington, has been recommended by Samuel Eklund based on her experience in commercial contract disputes and transportation industry damages analysis. Formal retention of Kensington is not anticipated until the discovery phase is further advanced and the client has approved the expert budget. The engagement team should prepare a preliminary expert retention memorandum for client review.
SECTION 14: SPECIAL CONSIDERATIONS
14.1 PE Sponsor Involvement
Ridgeline Capital Partners, LP is the majority equity owner of Stonefield (approximately 72% through Ridgeline Fund III, LP) and requires regular reporting on the status, strategy, and budget of this litigation. The engagement was authorized by Stonefield's General Counsel, Tobias Wren, with full awareness and approval of Ridgeline Capital Partners.
Alison Trang, a Partner at Ridgeline Capital Partners and a member of Stonefield's Board of Directors, has been designated to receive privileged litigation status updates. All such updates will be transmitted at the express direction of Tobias Wren to preserve the attorney-client privilege. The engagement team should take care to ensure that communications with Ridgeline personnel are appropriately structured to maintain privilege, including the use of appropriate privilege legends and the routing of communications through the client's General Counsel.
Douglas Whitmore (Managing Partner, Ridgeline) and Brendan Carey (Vice President, Ridgeline; SLG Board Observer) may also receive privileged updates at the direction of the client. The Responsible Partner (Samuel Eklund) should discuss with Tobias Wren the appropriate frequency and format for Ridgeline reporting, which is anticipated to include monthly written status memoranda and quarterly calls with the Ridgeline team.
14.2 Financial Reporting / Audit Disclosure
Stonefield's independent auditor is Clarendon Partners LLP, based in Austin, Texas. The engagement partner at Clarendon is Robert Farraday. Given the magnitude of Vantor's claimed damages ($95.4 million), this litigation may require disclosure as a contingent liability in Stonefield's audited financial statements in accordance with ASC 450 (Contingencies).
Coordination with Clarendon Partners will be managed through Priya Ramachandran (CFO) and Tobias Wren (General Counsel). The engagement team should be prepared to respond to audit inquiry letters from Clarendon Partners in connection with Stonefield's annual audit. Samuel Eklund will review and approve all responses to audit inquiry letters before they are submitted.
The financial reporting implications of this litigation should also be considered in the context of Stonefield's obligations under its Credit Agreement (see Section 10) and any reporting obligations to Ridgeline Fund III investors.
14.3 Amount at Stake
Vantor's claimed damages of approximately $95.4 million represent the total amount demanded in the Complaint. This figure includes liquidated damages, lost profits, stranded asset costs, workforce reduction costs, and mitigation costs. Stonefield's initial assessment, based on preliminary review of the claims and subject to further expert analysis, is that the realistic exposure range is significantly lower, with a maximum potential exposure estimated at $8.2 million. This estimate assumes that the liquidated damages clause is found unenforceable, that Vantor's lost profits claim is significantly reduced, and that VTS's failure to mitigate and its own prior material breaches are successfully established as defenses. The $0 floor reflects the possibility that all of Vantor's claims are defeated at summary judgment or trial.
This exposure assessment is preliminary and will be refined as discovery progresses and expert analysis is completed. The engagement team should prepare a formal case assessment memorandum for the client and Ridgeline within 60 days of engagement.
SECTION 15: APPROVALS AND SIGNATURES
This New Matter Intake Form has been prepared in accordance with Calderwood & Harkness LLP's policies and procedures for the opening of new matters. By signing below, the undersigned confirm that the information set forth herein is accurate and complete to the best of their knowledge, that the conflicts clearance process has been completed, and that the matter is approved for opening.
15.1 Prepared By
Prepared By:
Helen Tsao Senior Paralegal, Calderwood & Harkness LLP
Date: September 1, 2022
15.2 Responsible Partner Approval
Responsible Partner Approval:
Samuel Eklund Partner, Litigation (General) Calderwood & Harkness LLP
By: ________
Date: ________
15.3 Billing Partner Approval
Billing Partner Approval:
Linda Osei Partner, Litigation (General) Calderwood & Harkness LLP
By: ________
Date: ________
15.4 Records / Finance Acknowledgment
Records / Finance Department Acknowledgment:
Received By: ________
Title: ________
Date Entered into System: ________
Matter Number Confirmed: 1012-00005
— END OF NEW MATTER INTAKE FORM —
Calderwood & Harkness LLP — 200 Park Avenue, 38th Floor, New York, NY 10166 Confidential — Internal Use Only
| Field | Detail | |
| Court | United States District Court for the Southern District of New York | |
| Case Number | 22-cv-07841 | |
| Presiding Judge | Hon. Margaret T. Calloway, U.S.D.J. | |
| Assignment Method | Random assignment upon filing | |
| Courthouse | Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York 10007 | |
| Field | Detail | |
| Practice Group | Litigation (General) | |
| Sub-Category | Commercial Contract Dispute — Breach of Contract Defense | |
| Matter Classification | Active Litigation — Defense | |
| Field | Detail | |
| Entity Type | Corporation | |
| Jurisdiction of Incorporation | State of Delaware | |
| Date of Incorporation | August 14, 2017 (formed in connection with the Ridgeline Capital Partners leveraged buyout) | |
| Good Standing | Active / Good Standing (per Delaware Secretary of State records) | |
| Identification | Number | |
| Employer Identification Number (EIN) | 83-2947106 | |
| Metric | FY 2021 | FY 2022 (Estimated) |
| Revenue | ~$1.42 billion | ~$1.28 billion |
| EBITDA | Not reported at intake | ~$118 million |
| Employees | Approximately 2,800 | Approximately 2,800 |
| Field | Detail | |
| PE Sponsor | Ridgeline Capital Partners, LP | |
| Fund | Ridgeline Fund III, LP | |
| Equity Ownership | ~72% |
| Ridgeline Headquarters | 300 Crescent Court, Suite 1500, Dallas, Texas 75201 | ||
| Acquisition Date | October 2017 | ||
| Acquisition Enterprise Value | ~$680 million | ||
| Name | Title | Phone | |
| Tobias Wren | General Counsel | (817) 555-3400 | t.wren@stonefieldlogistics.com |
| Marcus Denton | Chief Executive Officer | (817) 555-3401 | m.denton@stonefieldlogistics.com |
| Priya Ramachandran | Chief Financial Officer | (817) 555-3422 | p.ramachandran@stonefieldlogistics.com |
| Name | Title | Entity | |
| Alison Trang | Partner; SLG Board Member | Ridgeline Capital Partners, LP | a.trang@ridgelinecapital.com |
| Douglas Whitmore | Managing Partner | Ridgeline Capital Partners, LP | d.whitmore@ridgelinecapital.com |
| Brendan Carey | Vice President; SLG Board Observer | Ridgeline Capital Partners, LP | b.carey@ridgelinecapital.com |
| Field | Detail | ||
| Full Legal Name | Vantor Holdings Corp. | ||
| Short Name | Vantor | ||
| Entity Type | Corporation | ||
| Jurisdiction of Incorporation | State of New York | ||
| EIN | 46-3821554 | ||
| Headquarters | 580 Eighth Avenue, 14th Floor, New York, New York 10018 | ||
| CEO / Founder | Nikolai Vantorovich | ||
| CFO | Gregory Fielding | ||
| Field | Detail | ||
| Full Legal Name | Vantor Transport Services LLC | ||
| Short Name | VTS | ||
| Entity Type | Limited Liability Company | ||
| Jurisdiction of Organization | State of New York |