1012-00005 · Stonefield Logistics Group · Experts

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PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION

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

November 14, 2022

EXPERT SCOPE MEMORANDUM

Matter: Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No.: 22-cv-07841 (S.D.N.Y.) C&H Matter No.: 1012-00005

From: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP

To: Dr. Evelyn Rosser, Managing Director, Kensington Analytics Group LLC, 1700 Market Street, Suite 2800, Philadelphia, PA 19103

CC: Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP; Simone Laroche, Working Associate, Calderwood & Harkness LLP; Michael Chung, Senior Analyst, Kensington Analytics Group LLC

Re: Scope of Expert Engagement — Damages Rebuttal and Economic Analysis

PRIVILEGE DESIGNATION: This memorandum is protected by the attorney work product doctrine and is prepared in anticipation of litigation. It contains counsel's mental impressions, legal theories, and strategic assessments. Do not disclose without prior written authorization from Calderwood & Harkness LLP.

I. PURPOSE AND INTRODUCTION

The purpose of this memorandum is to define the scope of engagement and identify the key analytical issues for Kensington Analytics Group LLC ("KAG") in its role as the damages and economics rebuttal expert retained on behalf of the defendant, Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), in the above-captioned matter. This memorandum is intended to serve as a comprehensive roadmap for KAG's work over the coming months and to ensure alignment between counsel and the expert team on the critical economic and financial issues that will shape Stonefield's defense.

As set forth in the retention letter dated October 28, 2022, executed by Samuel Eklund, Responsible Partner at Calderwood & Harkness LLP, KAG has been engaged to provide expert economic analysis and testimony in connection with this matter. Dr. Evelyn Rosser will serve as the lead expert, and Michael Chung will serve as the senior analyst supporting Dr. Rosser's work. The agreed-upon hourly rates are $625 per hour for Dr. Rosser and $375 per hour for Mr. Chung. The initial budget estimate for KAG's engagement through completion of the rebuttal expert report is $180,000 to $250,000, subject to revision as the scope of the engagement evolves.

KAG's engagement arises from the defense of Stonefield in a breach-of-contract action filed by Vantor Holdings Corp. ("Vantor") and its wholly owned operating subsidiary, Vantor Transport Services LLC ("VTS"), in the United States District Court for the Southern District of New York, before the Honorable Margaret T. Calloway, United States District Judge. The action concerns Stonefield's termination of a five-year Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315), which governed the provision of transportation and logistics services by VTS to Stonefield.

Vantor claims approximately $95,400,000 in total damages arising from the termination, alleging that Stonefield's termination of the TSA was wrongful and not supported by valid contractual grounds. The claimed damages encompass liquidated damages under the TSA, lost profits, stranded asset costs, workforce reduction costs, and mitigation expenses. Stonefield vigorously disputes these claims, contending that the termination was validly effectuated "for Cause" under Section 13.1 of the TSA based on VTS's chronic and material failure to satisfy its service level obligations.

Vantor has retained Trask Greystone & Associates as its damages expert. The lead expert for Vantor's engagement is Dr. Philip Trask, Founder of Trask Greystone & Associates, located at 400 Madison Avenue, Suite 900, New York, NY 10017. Dr. Trask's expert report is expected to be served during the expert discovery phase pursuant to the Case Management Order, which has not yet been entered by the Court but is anticipated to be issued following the disposition of Stonefield's pending motion to dismiss. The Case Management Order is expected to be entered on or about February 17, 2023, based on preliminary discussions with the Court.

KAG's principal task is to prepare a rebuttal expert report that addresses the enforceability, methodology, and quantum of Vantor's claimed damages across all categories. In addition, KAG should develop affirmative economic analyses that support Stonefield's defense theories, including that the liquidated damages clause operates as an unenforceable penalty, that Vantor's damages are grossly overstated, and that Vantor failed to mitigate its losses. Dr. Rosser should be prepared to testify at deposition and, if the matter proceeds to trial, before the jury or the Court.

The balance of this memorandum sets forth the factual background, the damages framework asserted by Vantor, the specific analytical issues KAG should address, and the logistics of the engagement.

II. BACKGROUND SUMMARY

A. The Parties

Stonefield Logistics Group Inc.

Stonefield Logistics Group Inc. is a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield operates as a mid-market freight brokerage and managed transportation company, providing a broad range of logistics services to shippers across the United States. Stonefield maintains a carrier network of approximately 12,000 approved carriers and handles roughly 850,000 shipments annually across truckload, less-than-truckload, and intermodal service modes.

Stonefield's fiscal year 2021 revenue was approximately $1.42 billion, reflecting strong performance in a robust freight market. Fiscal year 2022 revenue declined to approximately $1.28 billion, a reduction of approximately $140 million attributable in significant part to broader freight market softening and a contraction in spot market volumes during the second half of 2022. Stonefield's FY 2022 EBITDA was approximately $118 million, representing an EBITDA margin of approximately 9.2%. The company employs approximately 2,800 individuals across its corporate headquarters, regional offices, and operational centers.

Stonefield is majority-owned by Ridgeline Capital Partners, LP, acting through Ridgeline Fund III, LP, which holds approximately 72% of the equity. Ridgeline acquired Stonefield in October 2017 through a leveraged buyout at an enterprise value of approximately $680 million. The remaining equity is held by management and other minority investors.

Vantor Holdings Corp.

Vantor Holdings Corp. is a New York corporation headquartered at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Vantor is a holding company and the sole member of Vantor Transport Services LLC, its wholly owned operating subsidiary. Vantor's FY 2021 revenue was approximately $385 million. FY 2022 revenue declined to approximately $310 million, a reduction of approximately $75 million that Vantor attributes in part to the loss of the Stonefield contract and in part to broader market conditions. The company employs approximately 1,900 individuals.

Vantor is owned primarily by its Chief Executive Officer and Founder, Nikolai Vantorovich, who holds approximately 58% of the equity. The Fielding Family Trust, associated with CFO Gregory Fielding, holds approximately 12%. Various minority investors hold the remaining approximately 30%.

Vantor Transport Services LLC

Vantor Transport Services LLC is a New York limited liability company wholly owned by Vantor Holdings Corp. VTS is the signatory counterparty to the TSA alongside Stonefield and is the entity that performed the transportation services contemplated by the agreement. VTS operates a fleet of approximately 650 owned tractors and 2,100 trailers, supplemented by additional capacity sourced through independent owner-operators. VTS provides asset-based and asset-light trucking, warehousing, and regional distribution services, with particular concentration in the Northeast and Mid-Atlantic corridors. VTS is the entity that would have been the primary beneficiary of revenue and profit flows under the TSA and is accordingly the entity whose damages are principally at issue.

Key Personnel — Stonefield

The following individuals at Stonefield are relevant to KAG's expert analysis and may be referenced in documents, deposition testimony, or expert reports:

• Marcus Denton — Chief Executive Officer

• Priya Ramachandran — Chief Financial Officer

• Tobias Wren — General Counsel (authored the formal termination letter of March 4, 2022)

• Carlos Medina — Senior Vice President, Operations

• Janet Kirkwood — Vice President, Carrier Relations (oversaw the Vantor/VTS relationship and was the primary operational contact for VTS during the TSA period)

• Raymond Hess — Director, Contract Compliance (issued the Cure Notice of January 18, 2022, and was responsible for monitoring VTS's performance against the service level obligations)

Key Personnel — Vantor

The following individuals at Vantor and VTS are relevant to KAG's expert analysis:

• Nikolai Vantorovich — Chief Executive Officer, Vantor Holdings Corp.

• Gregory Fielding — Chief Financial Officer, Vantor Holdings Corp.

• Sandra Milescu — Chief Operating Officer, Vantor Holdings Corp. / VTS (recipient of the Cure Notice; responsible for VTS's operational performance)

• Derek Pruitt — Vice President, Business Development, VTS (primary SLG relationship manager; authored the February 14, 2022 response to the Cure Notice)

B. The Transportation Services Agreement

The TSA, executed on March 15, 2019 (Contract Ref. No. SLG-VTS-2019-0315), governs the provision of transportation and logistics services by VTS (as "Carrier-Provider") to Stonefield (as "Shipper-Broker"). The key terms of the TSA relevant to KAG's analysis are summarized below.

Term. The TSA has an initial five-year term commencing April 1, 2019 and expiring March 31, 2024. The agreement provides for one automatic two-year renewal unless either party provides 180 days' written notice of non-renewal prior to the expiration of the initial term.

Annual Committed Volume. Section 4.1 of the TSA establishes an Annual Committed Volume ("ACV") of $43,200,000 per year in transportation charges. Over the full five-year initial term, the total minimum commitment is $216,000,000. The ACV represents the minimum amount of freight that Stonefield agreed to tender to VTS on an annualized basis, measured in terms of total transportation charges at the contract rates.

Rate Structure. Per-mile rates are set forth by lane in Schedule B to the TSA. These rates are subject to annual adjustment pursuant to the Rate Adjustment Mechanism in Section 5.3. The adjustment is calculated using a blended index comprising 70% of the change in the average on-highway diesel fuel price (as published by the U.S. Energy Information Administration) and 30% of the change in the Consumer Price Index for All Urban Consumers (CPI-U), with adjustments applied each April 1 during the term of the agreement.

Service Level Obligations. The TSA establishes five Service Level Obligations ("SLOs") that VTS is required to satisfy on a continuous basis:

• On-time pickup rate: ≥ 95%

• On-time delivery rate: ≥ 93%

• Cargo claims ratio: ≤ 0.5% of gross revenue

• Tender acceptance rate: ≥ 90%

• Equipment availability compliance: ≥ 85% of committed fleet capacity (400 tractors and 1,200 trailers)

These SLOs are measured and reported quarterly. VTS's performance against the SLOs is central to the question of whether Stonefield's termination was validly "for Cause" under the TSA.

Fleet Capacity Commitment. VTS committed under the TSA to maintaining minimum fleet capacity of 400 tractors and 1,200 trailers dedicated to the Stonefield account. This fleet commitment was a material inducement for Stonefield's entry into the agreement and is referenced throughout the SLO framework.

Liquidated Damages. Section 14.2 of the TSA provides that, in the event Stonefield terminates the TSA other than "for Cause," Stonefield is required to pay liquidated damages equal to 75% of the ACV multiplied by the number of full and partial contract years remaining in the term. The clause states that the parties "acknowledge and agree" that the liquidated damages formula represents a "reasonable estimate" of VTS's anticipated harm from early termination and that the liquidated damages amount is "not a penalty." This clause is a central issue in the litigation.

Termination for Cause. Section 13.1 of the TSA defines "Cause" for termination to include: (a) material breach of the TSA that remains uncured for 30 calendar days after written notice specifying the breach with reasonable particularity; (b) insolvency or bankruptcy of the breaching party; (c) failure to maintain insurance required under the TSA; and (d) material violation of applicable law, including Department of Transportation and Federal Motor Carrier Safety Administration regulations.

Cure Notice Requirement. Section 13.2 of the TSA requires that any termination for Cause under Section 13.1(a) be preceded by a written notice specifying with "reasonable particularity" the alleged breach or breaches. The breaching party is afforded a 30-calendar-day cure period from receipt of the notice before the terminating party may declare the termination effective.

Consequential Damages Waiver. Section 15.1 of the TSA provides a mutual waiver of consequential damages. Specifically, the clause provides that neither party shall be liable to the other for "any indirect, incidental, consequential, special, or exemplary damages, including but not limited to lost profits, loss of use, or loss of business opportunity, arising out of or relating to this Agreement." The scope of this waiver and its application to the damages categories claimed by Vantor is a significant issue in the case.

Governing Law and Forum Selection. The TSA is governed by the laws of the State of New York. The parties consented to the exclusive jurisdiction of the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County.

Dispute Resolution. Section 16 of the TSA provides for a mandatory 30-day executive negotiation period before either party may initiate litigation. This process was invoked but did not result in resolution.

Exclusivity. Schedule C to the TSA designates 14 origin-destination pairs as "Primary Lanes." VTS was granted exclusivity with respect to the Primary Lanes, meaning Stonefield was required to tender freight on those lanes exclusively to VTS during the term of the TSA. "Secondary Lanes" were not subject to the exclusivity commitment and could be serviced by other carriers at Stonefield's discretion.

Force Majeure. Section 12.1 of the TSA includes a force majeure clause excusing performance to the extent that performance is prevented or materially impeded by events beyond the reasonable control of the affected party, including without limitation pandemics, government orders, and supply chain disruptions. Stonefield invoked this clause with respect to the COVID-19 pandemic during the period of April 2020 through September 2020.

C. Stonefield's Termination of the TSA

The events leading to Stonefield's termination of the TSA are summarized below and will be the subject of extensive fact discovery. KAG should be familiar with this timeline as it informs the causation, mitigation, and damages analyses.

Cure Notice — January 18, 2022. On January 18, 2022, Stonefield's Director of Contract Compliance, Raymond Hess, issued a formal Cure Notice to Vantor and VTS, directed to the attention of Sandra Milescu, Chief Operating Officer. The Cure Notice identified the following material breaches of the TSA, based on VTS's Q4 2021 performance and rolling performance metrics:

• On-time pickup rate: 78.2% (vs. the ≥ 95% SLO threshold) — a shortfall of 16.8 percentage points.

• On-time delivery rate: 81.6% (vs. the ≥ 93% SLO threshold) — a shortfall of 11.4 percentage points.

• Tender acceptance rate: 71.4% (vs. the ≥ 90% SLO threshold) — a shortfall of 18.6 percentage points.

• Equipment availability compliance: 62% of committed fleet capacity (approximately 248 tractors vs. the 400 tractors required under the TSA), against the ≥ 85% SLO threshold — a shortfall of 23 percentage points.

• Cargo claims ratio: 16 cargo claims were filed during November and December 2021, totaling $387,400 in claimed damages. This yielded a claims ratio of approximately 1.07% of gross revenue for that period, significantly exceeding the ≤ 0.5% SLO threshold.

• Surge capacity failure: The Cure Notice also cited VTS's chronic failure to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA when dedicated equipment was unavailable.

The Cure Notice specified that VTS was required to cure all identified breaches within 30 calendar days, establishing a cure deadline of February 17, 2022.

Vantor's Response — February 14, 2022. On February 14, 2022, three days before the cure deadline, Vantor responded through Derek Pruitt (VP Business Development) in a letter addressed to Janet Kirkwood (VP Carrier Relations, Stonefield). The response acknowledged "operational challenges" but attributed VTS's performance shortfalls to three factors: (i) a nationwide driver shortage that had severely constrained VTS's ability to recruit and retain qualified drivers; (ii) Stonefield's own alleged volume shortfalls, which Vantor contended had reduced the predictability and efficiency of VTS's dedicated operations; and (iii) Stonefield's alleged diversion of volume on Primary Lanes to spot market carriers in violation of the exclusivity provisions of Schedule C.

The response asserted that VTS had achieved "substantial cure" of the identified breaches and referenced several remedial actions undertaken by VTS, including driver recruitment initiatives and equipment maintenance programs. The response also disputed Stonefield's cargo claims data, contending that certain claims were attributable to third-party causes and should not have been counted against VTS's claims ratio.

Termination Letter — March 4, 2022. On March 4, 2022, Tobias Wren, General Counsel of Stonefield, issued a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC. The letter declared that VTS had "failed to cure the material breaches" identified in the Cure Notice within the 30-day cure period and that the TSA was terminated effective immediately under Section 13.1(a). The letter specified that Stonefield considered the termination to be "for Cause" and that accordingly no liquidated damages were owed under Section 14.2.

At the time of termination, the remaining term of the TSA was approximately two years and 27 days — from March 4, 2022 through March 31, 2024. This period is the basis for Vantor's calculation of liquidated damages and lost profits.

D. Procedural Posture at Time of This Memo

The procedural history of this matter is as follows:

August 12, 2022: Vantor filed its original Complaint in the United States District Court for the Southern District of New York, Case No. 22-cv-07841, asserting claims for breach of contract and seeking damages in excess of $95 million.

September 1, 2022: Calderwood & Harkness LLP was engaged to represent Stonefield in this matter. The firm opened the matter under C&H Matter No. 1012-00005.

October 14, 2022: Stonefield filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6). The motion argues, among other things, that the liquidated damages clause in Section 14.2 of the TSA is an unenforceable penalty as a matter of law, and that Vantor's lost profits claim is inadequately pled because the Complaint fails to allege with sufficient specificity the basis for Vantor's claimed operating margins and does not account for VTS's duty to mitigate.

November 18, 2022: Vantor filed its opposition to the Motion to Dismiss. The opposition was recently filed and is currently under review by the C&H team.

The Court has not yet ruled on the motion. Stonefield anticipates that the Court may permit limited amendment of the Complaint and that the matter will proceed to an Answer and discovery phase. At the time of this memorandum, fact discovery has not yet commenced and the Case Management Order has not yet been entered. KAG should anticipate receiving substantial documentary evidence during the discovery phase, including financial records, internal communications, and operational data from both parties.

III. VANTOR'S CLAIMED DAMAGES — OVERVIEW

Based on Vantor's Complaint and its pre-suit demand letter dated April 8, 2022 (in which Vantor demanded $95.4 million in total damages), Vantor's damages framework is as follows:

Several observations about Vantor's damages framework are important for KAG's analysis. First, and most significantly, Vantor appears to claim both liquidated damages ($67,230,000) and lost profits ($18,700,000), which together total $85,930,000. These two categories compensate for the same underlying economic harm — the expected value of the contract over the remaining term — and their simultaneous recovery raises significant issues of duplicative recovery that KAG should carefully analyze. Second, the liquidated damages formula (75% of ACV × remaining years) does not deduct any variable costs, mitigation income, or other offsets, suggesting that the formula may dramatically overstate VTS's actual economic loss. Third, the "stranded assets," "workforce reduction," and "mitigation costs" categories, totaling $9,470,000, are potentially barred by the TSA's mutual consequential damages waiver in Section 15.1, and their economic characterization as direct versus consequential damages will be an important component of KAG's analysis.

IV. KEY ISSUES FOR EXPERT ANALYSIS

The following sections identify the seven principal issues that KAG should analyze in preparing its rebuttal expert report. For each issue, this memorandum provides the relevant legal framework (for economic context), the specific analytical tasks requested of KAG, and preliminary observations from counsel that may inform KAG's approach.

A. Issue 1: Enforceability of the Liquidated Damages Clause (Section 14.2)

Legal Framework. Under New York law, a liquidated damages clause is enforceable if two conditions are met: (1) the amount specified in the clause is a reasonable forecast of just compensation for the harm that would be caused by a breach, measured at the time the contract was entered into; and (2) the actual damages from the breach are difficult to estimate at the time of contracting. If, by contrast, the clause operates as a "penalty" — that is, if the stipulated amount is grossly disproportionate to the foreseeable harm or if actual damages were readily ascertainable at the time of contracting — the clause is unenforceable. See Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354 (1977); Kestrel Corporation, 4 N.Y.3d 373 (2005).

The legal analysis of enforceability will be addressed by counsel in Stonefield's briefing. However, KAG's role is to provide the economic analysis and expert opinion that undergirds Stonefield's argument that the liquidated damages clause produces results that are grossly disproportionate to VTS's actual losses from early termination. This economic analysis is essential to the Court's evaluation of the enforceability issue, and KAG's opinion on the disparity between the liquidated damages figure and actual losses will be a central component of Stonefield's defense.

KAG Analysis Requested

KAG should address the following specific analytical questions:

1. Difficulty of Estimation at Time of Contracting. KAG should assess whether actual damages from early termination of a transportation services contract of this nature were, at the time of contracting (March 15, 2019), genuinely difficult to ascertain. In performing this assessment, KAG should consider the availability of market data on prevailing freight rates (both spot and contract), carrier operating margins in the truckload sector, and VTS's own historical financial performance. The freight transportation industry is characterized by extensive data availability, including publicly available benchmarks from Tarrant Software, Dunmore Systems, and other industry sources, as well as VTS's own financial statements reflecting its cost structure and margins. Counsel's preliminary view is that actual damages from early termination were reasonably ascertainable at the time of contracting using standard industry metrics and financial projections, and that the first prong of the enforceability test is therefore not satisfied.

2. Comparison to Reasonable Estimate of Actual Losses. KAG should compare the liquidated damages figure ($67,230,000) to a reasonable estimate of VTS's actual economic losses from early termination of the TSA. This comparison should account for VTS's ability to redeploy its fleet and personnel to replacement freight during the remaining term, VTS's actual cost structure and operating margins on the Stonefield account, and the prevailing freight market conditions during the remaining term period (March 2022 through March 2024). KAG should analyze whether the 75% of ACV formula bears a "reasonable relationship" to VTS's anticipated harm, or whether the formula produces a figure that is untethered from any realistic assessment of loss.

3. Margin Analysis. KAG should evaluate VTS's actual cost structure and operating margins on the Stonefield contract. If VTS's actual operating margins on the SLG contract were in the range of 8% to 12% (as Vantor itself appears to claim in seeking $18.7 million in separate "lost profits" on approximately $86.4 million in remaining committed volume), then VTS's actual lost margin on the remaining term would be in the range of approximately $6.9 million to $10.4 million. The 75% of ACV formula, which produces a figure of $67,230,000, would be approximately 6.5 to 9.7 times the actual lost margin — a disparity that strongly supports Stonefield's argument that the clause operates as a penalty. KAG should develop this analysis rigorously using VTS's financial data once available.

4. Fleet Redeployment Capacity. KAG should consider whether VTS's fleet could be redeployed to alternative freight in the then-prevailing market. The liquidated damages formula assumes that 75% of total contract revenue is lost, without any offset for revenue that VTS could earn by redeploying the dedicated fleet. VTS operated a total fleet of approximately 650 owned tractors and 2,100 trailers; only 400 tractors and 1,200 trailers were committed to the Stonefield contract. The remaining fleet continued to operate on other accounts, demonstrating that VTS had the operational capacity to absorb and redeploy equipment. The failure of the liquidated damages formula to account for mitigation or redeployment income further supports the argument that the clause is punitive rather than compensatory.

5. Gross Disproportionality Opinion. KAG should provide an expert opinion on whether the liquidated damages clause produces results that are "grossly disproportionate" to any reasonable estimate of actual harm from early termination. This opinion should synthesize the margin analysis, fleet redeployment analysis, and market condition analysis described above, and should express a clear conclusion regarding the relationship between the liquidated damages figure and VTS's actual expected losses.

B. Issue 2: Alternative Damages Models — Maximum Recoverable Damages if Termination Found Wrongful

Premise. In the event the Court determines that Stonefield's termination of the TSA was not validly "for Cause" — that is, that the termination was wrongful — Vantor may be entitled to recover contract damages measured by VTS's actual economic losses from the termination. In that scenario, the applicable measure of damages would be lost profits, not the inflated liquidated damages figure. KAG should prepare an alternative damages analysis assuming wrongful termination, with the objective of establishing the maximum credible damages figure under that scenario. This analysis is critical because it will frame the Court's and the jury's understanding of the realistic damages exposure, which counsel anticipates is substantially lower than the $95.4 million claimed by Vantor.

KAG Analysis Requested

1. Lost Profits Model. KAG should develop a rigorous lost profits model calculating VTS's actual lost profits from the remaining term of the TSA (March 4, 2022 through March 31, 2024). This model should adhere to proper economic methodology and should address the following components:

(a) Actual Operating Margin. KAG should determine VTS's actual operating margin on the Stonefield contract, based on VTS's financial statements, cost allocation methodologies, and the distinction between direct and indirect costs. Vantor claims an average operating margin of 12% on Stonefield freight, but this figure should be independently verified and may be inflated. VTS's cost structure includes driver compensation, fuel costs, equipment depreciation, maintenance, insurance, compliance costs, and allocated overhead. KAG should perform a detailed cost analysis to determine the true incremental margin on the Stonefield contract.

(b) Net Incremental Revenue. The margin should be applied only to the net incremental revenue that VTS would have earned — that is, the revenue that VTS actually lost as a result of the termination, after accounting for VTS's ability to redeploy its fleet and drivers to other freight. Revenue earned from redeployed equipment should be offset against the claimed loss.

(c) discount for Market Risk and Time Value of Money. Lost profits over a two-year forward period must be discounted to present value using an appropriate discount rate that reflects the time value of money and the market risk associated with future freight revenues. KAG should identify an appropriate discount rate based on the capital asset pricing model or comparable methodology.

(d) Volume Adjustments. KAG should account for the likelihood that Stonefield would not have tendered the full ACV during the remaining term, even had the TSA continued. The freight market experienced meaningful softening in 2022, and Stonefield's own FY 2022 revenue declined from approximately $1.42 billion to approximately $1.28 billion — a reduction of approximately 10%. It is probable that Stonefield's volume tenders to VTS would have declined in tandem with the broader market, and VTS's expected revenue should be adjusted accordingly.

2. ACV Shortfall Offset. KAG should analyze whether Stonefield's alleged failure to tender the full Annual Committed Volume in Contract Years 2 and 3 reduces Vantor's damages through an offset or setoff. Specifically:

(a) Contract Year 2 (April 2020 – March 2021). During CY2, Stonefield tendered $31,800,000 in transportation charges against the $43,200,000 ACV. However, Stonefield invoked the force majeure provision under Section 12.1 of the TSA for COVID-19-related impacts during the period of April 2020 through September 2020 — a period of six months. To the extent the force majeure clause is applicable, the adjusted ACV for CY2 would be $43,200,000 × (6/12) = $21,600,000, reflecting only the six-month period during which force majeure did not apply. Stonefield's actual tenders of $31,800,000 exceeded the adjusted ACV by $10,200,000. KAG should evaluate whether the force majeure adjustment is economically reasonable and consistent with the impact of COVID-19 on freight volumes during the relevant period.

(b) Contract Year 3 (April 2021 – March 2022). CY3 was interrupted by the termination; only approximately 10 months elapsed (April 2021 through January 2022, the month of the Cure Notice). During this period, Stonefield tendered $36,500,000. Vantor calculates a shortfall of $6,700,000 ($43,200,000 − $36,500,000). However, because only 10 of 12 months of the contract year had elapsed, a prorated ACV of $43,200,000 × (10/12) = $36,000,000 may be more appropriate, under which Stonefield's actual tenders exceeded the prorated ACV by $500,000. KAG should analyze whether the proration methodology is appropriate and, alternatively, whether any CY3 shortfall should be set off against Vantor's claimed damages.

3. Ceiling on Alternative Damages. KAG should establish a defensible maximum damages figure under the lost profits model that accounts for all of the adjustments described above. Counsel anticipates that this figure should be well below $95.4 million. Based on preliminary internal estimates by the C&H team, the maximum alternative damages figure is likely in the range of $8 million to $10 million, but KAG should develop this analysis independently and arrive at its own conclusion based on the available data. It is important that KAG's analysis be defensible, well-supported, and capable of withstanding cross-examination and Daubert scrutiny.

C. Issue 3: Duplicative Damages — Liquidated Damages and Lost Profits

Vantor's damages framework presents a significant issue of duplicative recovery. As noted above, Vantor claims both liquidated damages of $67,230,000 and lost profits of $18,700,000, which together total $85,930,000. Both of these categories compensate for fundamentally the same economic harm — the expected value of the TSA over the remaining term of the contract. Vantor cannot recover both.

KAG should analyze and opine on whether these categories are economically duplicative. Specifically, KAG should address the following:

(a) The liquidated damages formula under Section 14.2 of the TSA (75% × ACV × remaining years) is intended to serve as the exclusive contractual remedy for early termination not for Cause. The formula is designed to substitute for actual damages, including lost profits. It represents the parties' agreed-upon estimate of the total economic harm VTS would sustain from early termination. If the Court enforces the liquidated damages clause, VTS's lost profits are subsumed within that recovery, and any additional award of lost profits would constitute an impermissible double recovery.

(b) If the Court does not enforce the liquidated damages clause — for example, because it determines the clause is an unenforceable penalty — then only VTS's actual lost profits (properly calculated under standard contract damages principles) are recoverable. The liquidated damages formula would be of no effect, and Vantor would be limited to its actual demonstrated losses. In that scenario, the lost profits figure (properly calculated by KAG as described in Section IV.B above) would be the measure of damages, but recovery of both the unenforceable liquidated damages amount and separate lost profits would remain impermissible.

(c) Under no scenario is simultaneous recovery of both liquidated damages and lost profits economically justified. KAG should provide a clear economic opinion that recovery of both categories would overcompensate Vantor relative to its actual economic loss from the termination of the TSA.

D. Issue 4: Consequential Damages — Stranded Assets, Workforce Reduction, and Mitigation Costs

Consequential Damages Waiver

The TSA contains a mutual consequential damages waiver in Section 15.1. Counsel will argue that three of Vantor's damages categories — stranded assets and costs ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000), totaling $9,470,000 — are consequential damages barred by this waiver. KAG's role is to provide economic analysis supporting this characterization.

KAG Analysis Requested

1. Classification of Damages Categories. KAG should classify each of the three categories as either "direct" or "consequential" damages from an economic perspective, applying standard contract damages taxonomy. In general, direct damages (also referred to as "general" damages) are those that flow naturally and directly from the breach — in a contract for services, the lost value of the services themselves (i.e., lost profits on the contract). Consequential damages (also referred to as "special" damages) are those that do not flow directly from the breach but arise from the particular circumstances of the non-breaching party — such as costs of winding down operations, disposing of assets acquired in reliance on the contract, or severance payments to employees hired specifically for the contract.

2. Economic Support for Consequential Classification. KAG should provide economic support for the position that stranded asset costs (depreciation on dedicated equipment and lease termination costs), workforce reduction costs (severance and unemployment costs for approximately 180 drivers and support staff), and mitigation costs are consequential or incidental damages flowing from, but not directly caused by, the breach itself. These categories do not represent the direct loss of value of the contract (which is captured by lost profits); rather, they represent the downstream consequences of the termination on VTS's business operations. Under standard economic analysis, these are second-order effects that depend on VTS's particular business structure, asset mix, and employment practices — precisely the types of damages that a consequential damages waiver is intended to exclude.

3. Independent Analysis of Quantum. Even if these categories survive the consequential damages bar — for example, if the Court determines they constitute direct damages — KAG should analyze whether the claimed amounts are independently supportable or inflated. Specifically:

(a) Stranded Assets ($5,200,000). Vantor claims depreciation losses on tractors and trailers acquired for the Stonefield contract, along with lease termination costs. KAG should analyze whether the equipment claimed as "stranded" had residual value, whether it was or could have been redeployed to other uses, and whether the depreciation figures used by Vantor reflect economic depreciation or merely accounting depreciation. Equipment that is sold, redeployed, or otherwise utilized generates offsetting value that reduces the stranded asset claim.

(b) Workforce Reduction Costs ($2,870,000). Vantor claims severance and unemployment costs for approximately 180 drivers and support staff allegedly terminated as a result of the loss of the Stonefield contract. KAG should analyze whether these employees were in fact terminated, whether they were absorbed into other positions within VTS or Vantor, and whether the severance amounts claimed are reasonable and consistent with VTS's employment practices and applicable law. Additionally, to the extent VTS had been experiencing driver shortages (as acknowledged in its February 14, 2022 response to the Cure Notice), the termination of 180 drivers is incongruous and warrants scrutiny.

(c) Mitigation Costs ($1,400,000). Vantor claims costs incurred in seeking replacement freight. KAG should analyze whether these costs are genuine mitigation expenses or ordinary business costs that VTS would have incurred regardless. To the extent the mitigation efforts yielded replacement revenue, that revenue should offset the claimed mitigation costs.

E. Issue 5: Mitigation Analysis

Legal Premise. Under New York law, a plaintiff has a duty to take reasonable steps to mitigate its damages following a breach of contract. The plaintiff cannot recover damages that could have been avoided through the exercise of reasonable diligence and effort. The burden of proving failure to mitigate rests with the defendant, and KAG's analysis will be central to establishing this defense.

KAG Analysis Requested

1. Freight Market Conditions. KAG should analyze freight market conditions in Q1 and Q2 2022 — the period immediately following the March 4, 2022 termination — to establish that VTS had meaningful opportunities to redeploy its fleet and mitigate its losses. Preliminary indications suggest that the spot freight market was robust during this period. National average spot rates were elevated approximately 35% above historical averages during Q1 2022, driven by strong consumer demand, inventory restocking, and continued supply chain disruptions. The truckload market experienced tight capacity conditions, with the truck-to-load ratio remaining well below historical averages. These market conditions presented significant opportunities for an asset-based carrier like VTS to earn replacement revenue by deploying idle equipment to the spot market or entering into short-term contract arrangements with other shippers.

2. Reasonable Mitigation Steps. KAG should assess what reasonable mitigation steps VTS could and should have taken following the termination. These steps would include, at a minimum: (a) seeking replacement freight contracts with other shippers to absorb the dedicated fleet capacity previously committed to the Stonefield account; (b) deploying idle tractors and trailers to the spot freight market, where elevated rates were available; (c) entering into short-term or interim arrangements with other shippers or freight brokers; (d) marketing VTS's available capacity through industry channels, load boards, and broker networks; and (e) reassigning displaced drivers to other VTS accounts that were experiencing capacity shortfalls. Given the favorable market conditions in 2022, a reasonable carrier in VTS's position should have been able to replace a substantial portion of the lost Stonefield revenue within a reasonable period.

3. VTS's Actual Mitigation Efforts. KAG should analyze VTS's actual mitigation efforts, to the extent discoverable through fact discovery. Based on the information currently available in Vantor's Complaint and demand letter, VTS claims only $1,400,000 in "mitigation costs" and does not identify specific replacement contracts, replacement revenue earned, or other concrete mitigation actions. The absence of detailed mitigation evidence in Vantor's pleadings suggests that VTS may not have undertaken adequate mitigation efforts — a failure that should reduce any damages award.

4. Quantification of Mitigation Offset. KAG should quantify the impact of Vantor's failure to mitigate — that is, estimate the revenue that VTS could reasonably have earned by redeploying the dedicated fleet (400 tractors and 1,200 trailers, or whatever portion was actually available) to alternative freight during the remaining term of the TSA (March 2022 through March 2024). This analysis should consider the applicable market rates for the types of freight VTS was equipped to handle, the geographic corridors in which VTS operated, and the time required to secure replacement business. The resulting figure should be deducted from any damages award as revenue that VTS could reasonably have earned through mitigation.

5. Fleet Capacity Focus. KAG should pay particular attention to the composition of VTS's fleet. VTS operated a total fleet of approximately 650 owned tractors and 2,100 trailers. Only 400 tractors and 1,200 trailers were committed to the Stonefield contract. The remaining fleet — approximately 250 tractors and 900 trailers — continued to operate on other VTS accounts. The dedicated fleet should have been readily redeployable to other freight, particularly given that VTS's own drivers and support staff were already trained and operationally capable. The existence of a substantial non-dedicated fleet demonstrates that VTS had the operational infrastructure to absorb the dedicated equipment and redeploy it efficiently.

F. Issue 6: VTS Financial Condition and Causation

KAG Analysis Requested

1. Independent Revenue Decline. KAG should examine VTS's and Vantor's financial condition and operational performance independent of the Stonefield contract. Vantor's FY 2022 revenue declined from approximately $385 million (FY 2021) to approximately $310 million (FY 2022) — a decline of approximately $75 million. However, the Stonefield contract had an ACV of $43,200,000, which means that the loss of the Stonefield contract accounts for, at most, approximately $43 million of the $75 million revenue decline. The remaining decline of approximately $32 million is attributable to factors unrelated to the termination — including broader freight market softening, loss of other customers, and operational challenges. KAG should analyze these independent factors and quantify their contribution to Vantor's overall financial decline in order to isolate the portion of the decline that is causally attributable to the TSA termination.

2. Pre-Existing Operational Strain. KAG should assess whether VTS's financial difficulties — including the revenue decline, driver shortages, and fleet redeployment challenges — predated and were independent of the termination. Evidence already available suggests that VTS was experiencing significant operational strain in Q3 and Q4 of 2021, well before Stonefield issued its Cure Notice. Of particular significance is an internal VTS email dated November 12, 2021, from Sandra Milescu (COO) to Nikolai Vantorovich (CEO), in which Milescu acknowledged that VTS had "pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments." This email demonstrates that VTS was unilaterally reducing its fleet dedication to the Stonefield account as early as late 2021, not because of any action by Stonefield but because of VTS's own commercial decision to reallocate equipment to other customers.

3. Self-Inflicted Operational Failures. KAG should analyze whether VTS's performance failures — which formed the basis for Stonefield's termination — were caused by factors within VTS's control (such as the commercial decision to redeploy fleet to other customers) or by exogenous market conditions (such as the nationwide driver shortage). If VTS's failures were self-inflicted — that is, if VTS made affirmative business decisions to reduce its fleet commitment to Stonefield in order to serve other, presumably more profitable, customers — this fact undermines the causal nexus between Stonefield's termination and Vantor's claimed damages. A party cannot recover damages for a termination that was precipitated by its own breach.

4. First-to-Breach Analysis. KAG should assess the economic timeline and sequence of events to determine whether VTS committed the first material breach of the TSA. If VTS unilaterally reduced fleet capacity in October or November 2021 (by pulling 85 tractors off SLG lanes without notification or contractual justification), this may constitute a material breach of the fleet capacity commitment (400 tractors) and the equipment availability SLO (≥ 85% compliance). If VTS breached first, the causal chain between Stonefield's subsequent termination and Vantor's claimed damages may be severed, and VTS may be precluded from recovering damages flowing from its own prior breach. KAG should develop an economic chronology that maps VTS's fleet allocation decisions against the SLO performance data and the contractual requirements.

G. Issue 7: Rate Adjustment Motive — Economic Context

Background. Vantor alleges that Stonefield terminated the TSA not because of genuine performance concerns but to avoid the April 1, 2022 rate adjustment under the Rate Adjustment Mechanism in Section 5.3 of the TSA. The rate adjustment would have increased per-mile rates from a weighted average of $2.87 to $3.28 — an increase of 14.3%, calculated as ($3.28 − $2.87) / $2.87 = 14.29%. This rate increase, applied across the projected volume for the remaining term, would have added approximately $6.2 million in annual transportation costs to Stonefield, or approximately $12.4 million over the two remaining contract years.

An internal memorandum prepared by Ashford Meridian LLP (Stonefield's transactional counsel, 2200 Ross Avenue, Suite 3600, Dallas, TX 75201; Lorraine Beckwith, Partner) in February 2022 analyzed the financial impact of the rate adjustment. This memorandum may be produced in discovery and may be referenced by Vantor in support of its "pretext" theory.

KAG Analysis Requested

1. Economic Magnitude. KAG should be prepared to address whether the economic magnitude of the rate increase ($6.2 million per year, or $12.4 million over the remaining two years) is consistent with or divergent from a termination-for-cost-savings motive. While the legal question of whether Stonefield's subjective motive is relevant to a "for Cause" termination under the TSA is a legal issue that counsel will address, KAG may be asked to opine on the economics of the alleged motive.

2. Rational Actor Analysis. KAG should compare the cost of the rate increase ($6.2 million per year, or approximately $12.4 million over the two remaining years) to the potential liability from a wrongful termination ($95.4 million as claimed by Vantor; approximately $8 million to $10 million under Stonefield's alternative damages model). A rational economic actor would not terminate a contract to save $12.4 million if doing so exposed the actor to $95.4 million in potential liability — a liability-to-savings ratio of approximately 7.7:1. Even under the more conservative alternative damages estimate of $8 million to $10 million, the potential liability approximately equals or slightly exceeds the cost savings, making termination for cost-avoidance purposes a dubious economic proposition from a risk-adjusted perspective. This analysis supports Stonefield's position that the termination was driven by genuine and documented performance concerns, not by a desire to avoid the rate adjustment.

3. Supporting Stonefield's Defense. This rational actor analysis reinforces the credibility of Stonefield's for-Cause defense. KAG should be prepared to present this analysis as part of its broader economic opinion to counteract Vantor's narrative that the termination was pretextual.

V. DATA AND DOCUMENTS TO BE PROVIDED

Calderwood & Harkness LLP will provide KAG with the following categories of documents and data as they become available through fact discovery and document production. KAG should use these materials as the evidentiary foundation for its expert analysis and report.

1. The TSA (Contract Ref. No. SLG-VTS-2019-0315), dated March 15, 2019, including all Schedules (Schedule A — Scope of Services; Schedule B — Rate Matrix by Lane; Schedule C — Primary and Secondary Lane Designations; and any others) and any amendments, supplements, or change orders executed during the term.

2. Stonefield's Cure Notice, dated January 18, 2022, from Raymond Hess (Director, Contract Compliance, Stonefield) to Sandra Milescu (COO, Vantor/VTS).

3. Vantor's Response to Cure Notice, dated February 14, 2022, from Derek Pruitt (VP Business Development, VTS) to Janet Kirkwood (VP Carrier Relations, Stonefield).

4. Stonefield's Termination Letter, dated March 4, 2022, from Tobias Wren (General Counsel, Stonefield) to Vantor Holdings Corp. and Vantor Transport Services LLC.

5. VTS Quarterly and Annual Performance Reports under the TSA, including SLO compliance data, shipment volumes, rate calculations, and fleet utilization metrics for each quarter from the inception of the TSA through termination.

6. VTS Q4 2021 Performance Report — an internal VTS document showing actual performance metrics below SLO thresholds across all five categories (on-time pickup, on-time delivery, tender acceptance, equipment availability, and cargo claims ratio).

7. Vantor/VTS Financial Statements (audited and unaudited) for fiscal years 2019, 2020, 2021, and 2022, including income statements, balance sheets, cash flow statements, and management discussion and analysis.

8. Stonefield Financial Data relevant to volume tenders, rate calculations, and ACV compliance, including invoicing records, shipment-level data, and internal volume tracking reports.

9. Internal VTS Communications regarding fleet management, driver allocation, and the SLG account, including but not limited to the email dated November 12, 2021 from Sandra Milescu to Nikolai Vantorovich referencing the redeployment of 85 tractors from SLG dedicated lanes.

10. Internal Stonefield Communications relevant to the Vantor relationship, including but not limited to the email dated September 22, 2021 from Janet Kirkwood (VP Carrier Relations) to Carlos Medina (SVP Operations) regarding concerns about VTS's performance.

11. Ashford Meridian LLP Rate Adjustment Analysis Memo, prepared in February 2022 by Lorraine Beckwith, Partner, analyzing the financial impact of the April 1, 2022 rate adjustment under Section 5.3 of the TSA.

12. Industry Data on freight market conditions, including spot rates, contract rates, driver availability, capacity utilization, and market indices for the period 2019 through 2024, from sources including Tarrant Software, Dunmore Systems, ATRI, American Trucking Associations, and other relevant industry publications.

13. Vantor's Demand Letter, dated April 8, 2022, and any supporting calculations, schedules, or analyses provided with or referenced in the demand letter.

14. Trask Greystone's Expert Report, once served by Vantor during the expert discovery phase. C&H will transmit this report to KAG promptly upon receipt to enable timely commencement of the rebuttal analysis.

15. VTS Fleet Records, including equipment inventory records, lease agreements for tractors and trailers, equipment depreciation schedules, maintenance records, and disposal/sale records for equipment claimed as "stranded assets."

16. VTS Employment Records related to workforce reduction, including severance agreements, termination notices, unemployment filings, and driver-level records for the approximately 180 drivers and support staff allegedly terminated as a result of the loss of the Stonefield contract.

17. Documents Produced by Vantor or Third Parties during discovery relevant to VTS's mitigation efforts, including correspondence with prospective replacement customers, load board records, broker communications, and financial records reflecting replacement freight revenue.

Document discovery has not yet commenced in this matter. Calderwood & Harkness LLP anticipates serving Stonefield's first set of discovery requests in early 2023, with initial document productions from Vantor expected in the spring of 2023. Documents will be transmitted to KAG on a rolling basis as productions are received, reviewed for relevance and privilege, and cleared for expert access.

eDiscovery for this matter is managed by Pinnacle Forensics LLC. The client engagement director is Nathan Billings, and the project has been assigned Project ID: PF-SLG-2022-0914. Pinnacle's offices are located at 12000 Findley Road, Suite 200, Johns Creek, Georgia 30097. KAG may be provided direct access to the Pinnacle review platform for certain document sets relevant to the economic analysis, subject to appropriate access controls and confidentiality protections. C&H will coordinate platform access with Pinnacle as appropriate.

VI. ANTICIPATED EXPERT REPORT AND DELIVERABLES

Rebuttal Expert Report

KAG's primary deliverable will be a written rebuttal expert report prepared in compliance with Federal Rule of Civil Procedure 26(a)(2)(B). The report must contain a complete statement of all opinions Dr. Rosser will express and the basis and reasons for each opinion, the facts and data considered in forming each opinion, any exhibits to be used to summarize or support each opinion, Dr. Rosser's qualifications including a list of publications authored within the preceding ten years, a list of all cases in which Dr. Rosser has testified as an expert at trial or by deposition during the preceding four years, and a statement of the compensation to be paid for the study and testimony in the case.

Substantively, the rebuttal expert report should accomplish the following:

1. Respond to and rebut each damages category claimed by Vantor and quantified by Trask Greystone & Associates in its expert report. KAG should systematically address the liquidated damages claim, the lost profits claim, the stranded assets claim, the workforce reduction costs claim, and the mitigation costs claim, identifying methodological flaws, unsupported assumptions, and errors in calculation.

2. Provide KAG's independent damages analysis under the alternative scenarios described in Section IV of this memorandum, including the enforceability/penalty analysis for the liquidated damages clause, the alternative lost profits model, the duplicative damages analysis, the consequential damages classification, the mitigation analysis, and the causation analysis.

3. Include detailed calculations, supporting exhibits, data sources, and methodology descriptions sufficient to allow the Court and the opposing expert to evaluate and replicate KAG's analysis. All data inputs, assumptions, and intermediate calculations should be transparent and well-documented.

4. Comply with *Daubert* standards for reliability and relevance. The expert report must demonstrate that KAG's methodology is the product of reliable principles and methods, that those principles and methods have been reliably applied to the facts of the case, and that the testimony is based on sufficient facts or data. KAG should be prepared to defend its methodology against a Daubert challenge.

Timeline

The Case Management Order has not yet been entered, but C&H anticipates that expert reports will be due in mid-to-late 2023. Under the anticipated CMO, Vantor (as the plaintiff) will serve its opening expert report first, and Stonefield will have approximately 90 days thereafter to serve its rebuttal expert report. Calderwood & Harkness LLP will advise KAG of the specific deadlines once the CMO is issued by the Court. KAG should plan accordingly and ensure that adequate resources are available to meet the rebuttal report deadline.

Deposition and Trial Testimony

Dr. Rosser should be prepared for deposition by Vantor's counsel following the service of the rebuttal expert report. Expert depositions are typically scheduled within 30 to 60 days of the completion of expert report exchanges. Dr. Rosser should also be prepared for trial testimony if the case proceeds to trial, which C&H currently anticipates could occur in late 2024 or early 2025 depending on the pace of discovery and any pre-trial motions practice.

Interim Deliverables

As the case develops, C&H may request preliminary analyses, draft calculations, or informal memoranda on specific issues identified in this memorandum. Such interim work product should be labeled "DRAFT — Attorney Work Product" and should not be distributed outside the KAG-C&H engagement team without prior authorization from C&H. These materials may be subject to discovery in certain circumstances, and C&H will provide guidance on appropriate handling.

VII. BUDGET AND BILLING

As set forth in the retention letter of October 28, 2022, the agreed-upon hourly rates for KAG's engagement are $625 per hour for Dr. Evelyn Rosser (Managing Director and lead expert) and $375 per hour for Michael Chung (Senior Analyst). These rates apply to all time spent in connection with this engagement, including research, analysis, report preparation, communications with counsel, deposition preparation, and testimony.

The initial budget estimate for KAG's engagement through completion of the rebuttal expert report is $180,000 to $250,000. This estimate is based on the scope of work described in this memorandum and assumes a standard discovery process without extraordinary complications. The budget may be revised upward if the scope of the engagement expands — for example, if KAG is asked to prepare an affirmative damages analysis (in addition to the rebuttal report), supplemental expert reports in response to reply or surrebuttal reports by Trask Greystone, or additional analyses of new damages theories not yet as

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION
CALDERWOOD & HARKNESS LLP 200 Park Avenue, 38th Floor New York, New York 10166
November 14, 2022
EXPERT SCOPE MEMORANDUM
Matter: Vantor Holdings Corp. v. Stonefield Logistics Group Inc. Case No.: 22-cv-07841 (S.D.N.Y.) C&H Matter No.: 1012-00005
From: Patrick Gallagher, Lead Associate, Litigation (General), Calderwood & Harkness LLP
To: Dr. Evelyn Rosser, Managing Director, Kensington Analytics Group LLC, 1700 Market Street, Suite 2800, Philadelphia, PA 19103
CC: Samuel Eklund, Responsible Partner, Calderwood & Harkness LLP; Simone Laroche, Working Associate, Calderwood & Harkness LLP; Michael Chung, Senior Analyst, Kensington Analytics Group LLC
Re: Scope of Expert Engagement — Damages Rebuttal and Economic Analysis
PRIVILEGE DESIGNATION: This memorandum is protected by the attorney work product doctrine and is prepared in anticipation of litigation. It contains counsel's mental impressions, legal theories, and strategic assessments. Do not disclose without prior written authorization from Calderwood & Harkness LLP.
I. PURPOSE AND INTRODUCTION
The purpose of this memorandum is to define the scope of engagement and identify the key analytical issues for Kensington Analytics Group LLC ("KAG") in its role as the damages and economics rebuttal expert retained on behalf of the defendant, Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), in the above-captioned matter. This memorandum is intended to serve as a comprehensive roadmap for KAG's work over the coming months and to ensure alignment between counsel and the expert team on the critical economic and financial issues that will shape Stonefield's defense.
As set forth in the retention letter dated October 28, 2022, executed by Samuel Eklund, Responsible Partner at Calderwood & Harkness LLP, KAG has been engaged to provide expert economic analysis and testimony in connection with this matter. Dr. Evelyn Rosser will serve as the lead expert, and Michael Chung will serve as the senior analyst supporting Dr. Rosser's work. The agreed-upon hourly rates are $625 per hour for Dr. Rosser and $375 per hour for Mr. Chung. The initial budget estimate for KAG's engagement through completion of the rebuttal expert report is $180,000 to $250,000, subject to revision as the scope of the engagement evolves.
KAG's engagement arises from the defense of Stonefield in a breach-of-contract action filed by Vantor Holdings Corp. ("Vantor") and its wholly owned operating subsidiary, Vantor Transport Services LLC ("VTS"), in the United States District Court for the Southern District of New York, before the Honorable Margaret T. Calloway, United States District Judge. The action concerns Stonefield's termination of a five-year Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Ref. No. SLG-VTS-2019-0315), which governed the provision of transportation and logistics services by VTS to Stonefield.
Vantor claims approximately $95,400,000 in total damages arising from the termination, alleging that Stonefield's termination of the TSA was wrongful and not supported by valid contractual grounds. The claimed damages encompass liquidated damages under the TSA, lost profits, stranded asset costs, workforce reduction costs, and mitigation expenses. Stonefield vigorously disputes these claims, contending that the termination was validly effectuated "for Cause" under Section 13.1 of the TSA based on VTS's chronic and material failure to satisfy its service level obligations.
Vantor has retained Trask Greystone & Associates as its damages expert. The lead expert for Vantor's engagement is Dr. Philip Trask, Founder of Trask Greystone & Associates, located at 400 Madison Avenue, Suite 900, New York, NY 10017. Dr. Trask's expert report is expected to be served during the expert discovery phase pursuant to the Case Management Order, which has not yet been entered by the Court but is anticipated to be issued following the disposition of Stonefield's pending motion to dismiss. The Case Management Order is expected to be entered on or about February 17, 2023, based on preliminary discussions with the Court.
KAG's principal task is to prepare a rebuttal expert report that addresses the enforceability, methodology, and quantum of Vantor's claimed damages across all categories. In addition, KAG should develop affirmative economic analyses that support Stonefield's defense theories, including that the liquidated damages clause operates as an unenforceable penalty, that Vantor's damages are grossly overstated, and that Vantor failed to mitigate its losses. Dr. Rosser should be prepared to testify at deposition and, if the matter proceeds to trial, before the jury or the Court.
The balance of this memorandum sets forth the factual background, the damages framework asserted by Vantor, the specific analytical issues KAG should address, and the logistics of the engagement.
II. BACKGROUND SUMMARY
A. The Parties
Stonefield Logistics Group Inc.
Stonefield Logistics Group Inc. is a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield operates as a mid-market freight brokerage and managed transportation company, providing a broad range of logistics services to shippers across the United States. Stonefield maintains a carrier network of approximately 12,000 approved carriers and handles roughly 850,000 shipments annually across truckload, less-than-truckload, and intermodal service modes.
Stonefield's fiscal year 2021 revenue was approximately $1.42 billion, reflecting strong performance in a robust freight market. Fiscal year 2022 revenue declined to approximately $1.28 billion, a reduction of approximately $140 million attributable in significant part to broader freight market softening and a contraction in spot market volumes during the second half of 2022. Stonefield's FY 2022 EBITDA was approximately $118 million, representing an EBITDA margin of approximately 9.2%. The company employs approximately 2,800 individuals across its corporate headquarters, regional offices, and operational centers.
Stonefield is majority-owned by Ridgeline Capital Partners, LP, acting through Ridgeline Fund III, LP, which holds approximately 72% of the equity. Ridgeline acquired Stonefield in October 2017 through a leveraged buyout at an enterprise value of approximately $680 million. The remaining equity is held by management and other minority investors.
Vantor Holdings Corp.
Vantor Holdings Corp. is a New York corporation headquartered at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Vantor is a holding company and the sole member of Vantor Transport Services LLC, its wholly owned operating subsidiary. Vantor's FY 2021 revenue was approximately $385 million. FY 2022 revenue declined to approximately $310 million, a reduction of approximately $75 million that Vantor attributes in part to the loss of the Stonefield contract and in part to broader market conditions. The company employs approximately 1,900 individuals.
Vantor is owned primarily by its Chief Executive Officer and Founder, Nikolai Vantorovich, who holds approximately 58% of the equity. The Fielding Family Trust, associated with CFO Gregory Fielding, holds approximately 12%. Various minority investors hold the remaining approximately 30%.
Vantor Transport Services LLC
Vantor Transport Services LLC is a New York limited liability company wholly owned by Vantor Holdings Corp. VTS is the signatory counterparty to the TSA alongside Stonefield and is the entity that performed the transportation services contemplated by the agreement. VTS operates a fleet of approximately 650 owned tractors and 2,100 trailers, supplemented by additional capacity sourced through independent owner-operators. VTS provides asset-based and asset-light trucking, warehousing, and regional distribution services, with particular concentration in the Northeast and Mid-Atlantic corridors. VTS is the entity that would have been the primary beneficiary of revenue and profit flows under the TSA and is accordingly the entity whose damages are principally at issue.
Key Personnel — Stonefield
The following individuals at Stonefield are relevant to KAG's expert analysis and may be referenced in documents, deposition testimony, or expert reports:
•  Marcus Denton — Chief Executive Officer
•  Priya Ramachandran — Chief Financial Officer
•  Tobias Wren — General Counsel (authored the formal termination letter of March 4, 2022)
•  Carlos Medina — Senior Vice President, Operations
•  Janet Kirkwood — Vice President, Carrier Relations (oversaw the Vantor/VTS relationship and was the primary operational contact for VTS during the TSA period)
•  Raymond Hess — Director, Contract Compliance (issued the Cure Notice of January 18, 2022, and was responsible for monitoring VTS's performance against the service level obligations)
Key Personnel — Vantor
The following individuals at Vantor and VTS are relevant to KAG's expert analysis:
•  Nikolai Vantorovich — Chief Executive Officer, Vantor Holdings Corp.
•  Gregory Fielding — Chief Financial Officer, Vantor Holdings Corp.
•  Sandra Milescu — Chief Operating Officer, Vantor Holdings Corp. / VTS (recipient of the Cure Notice; responsible for VTS's operational performance)
•  Derek Pruitt — Vice President, Business Development, VTS (primary SLG relationship manager; authored the February 14, 2022 response to the Cure Notice)
B. The Transportation Services Agreement
The TSA, executed on March 15, 2019 (Contract Ref. No. SLG-VTS-2019-0315), governs the provision of transportation and logistics services by VTS (as "Carrier-Provider") to Stonefield (as "Shipper-Broker"). The key terms of the TSA relevant to KAG's analysis are summarized below.
Term. The TSA has an initial five-year term commencing April 1, 2019 and expiring March 31, 2024. The agreement provides for one automatic two-year renewal unless either party provides 180 days' written notice of non-renewal prior to the expiration of the initial term.
Annual Committed Volume. Section 4.1 of the TSA establishes an Annual Committed Volume ("ACV") of $43,200,000 per year in transportation charges. Over the full five-year initial term, the total minimum commitment is $216,000,000. The ACV represents the minimum amount of freight that Stonefield agreed to tender to VTS on an annualized basis, measured in terms of total transportation charges at the contract rates.
Rate Structure. Per-mile rates are set forth by lane in Schedule B to the TSA. These rates are subject to annual adjustment pursuant to the Rate Adjustment Mechanism in Section 5.3. The adjustment is calculated using a blended index comprising 70% of the change in the average on-highway diesel fuel price (as published by the U.S. Energy Information Administration) and 30% of the change in the Consumer Price Index for All Urban Consumers (CPI-U), with adjustments applied each April 1 during the term of the agreement.
Service Level Obligations. The TSA establishes five Service Level Obligations ("SLOs") that VTS is required to satisfy on a continuous basis:
•  On-time pickup rate: ≥ 95%
•  On-time delivery rate: ≥ 93%
•  Cargo claims ratio: ≤ 0.5% of gross revenue
•  Tender acceptance rate: ≥ 90%
•  Equipment availability compliance: ≥ 85% of committed fleet capacity (400 tractors and 1,200 trailers)
These SLOs are measured and reported quarterly. VTS's performance against the SLOs is central to the question of whether Stonefield's termination was validly "for Cause" under the TSA.
Fleet Capacity Commitment. VTS committed under the TSA to maintaining minimum fleet capacity of 400 tractors and 1,200 trailers dedicated to the Stonefield account. This fleet commitment was a material inducement for Stonefield's entry into the agreement and is referenced throughout the SLO framework.
Liquidated Damages. Section 14.2 of the TSA provides that, in the event Stonefield terminates the TSA other than "for Cause," Stonefield is required to pay liquidated damages equal to 75% of the ACV multiplied by the number of full and partial contract years remaining in the term. The clause states that the parties "acknowledge and agree" that the liquidated damages formula represents a "reasonable estimate" of VTS's anticipated harm from early termination and that the liquidated damages amount is "not a penalty." This clause is a central issue in the litigation.
Termination for Cause. Section 13.1 of the TSA defines "Cause" for termination to include: (a) material breach of the TSA that remains uncured for 30 calendar days after written notice specifying the breach with reasonable particularity; (b) insolvency or bankruptcy of the breaching party; (c) failure to maintain insurance required under the TSA; and (d) material violation of applicable law, including Department of Transportation and Federal Motor Carrier Safety Administration regulations.
Cure Notice Requirement. Section 13.2 of the TSA requires that any termination for Cause under Section 13.1(a) be preceded by a written notice specifying with "reasonable particularity" the alleged breach or breaches. The breaching party is afforded a 30-calendar-day cure period from receipt of the notice before the terminating party may declare the termination effective.
Consequential Damages Waiver. Section 15.1 of the TSA provides a mutual waiver of consequential damages. Specifically, the clause provides that neither party shall be liable to the other for "any indirect, incidental, consequential, special, or exemplary damages, including but not limited to lost profits, loss of use, or loss of business opportunity, arising out of or relating to this Agreement." The scope of this waiver and its application to the damages categories claimed by Vantor is a significant issue in the case.
Governing Law and Forum Selection. The TSA is governed by the laws of the State of New York. The parties consented to the exclusive jurisdiction of the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County.
Dispute Resolution. Section 16 of the TSA provides for a mandatory 30-day executive negotiation period before either party may initiate litigation. This process was invoked but did not result in resolution.
Exclusivity. Schedule C to the TSA designates 14 origin-destination pairs as "Primary Lanes." VTS was granted exclusivity with respect to the Primary Lanes, meaning Stonefield was required to tender freight on those lanes exclusively to VTS during the term of the TSA. "Secondary Lanes" were not subject to the exclusivity commitment and could be serviced by other carriers at Stonefield's discretion.
Force Majeure. Section 12.1 of the TSA includes a force majeure clause excusing performance to the extent that performance is prevented or materially impeded by events beyond the reasonable control of the affected party, including without limitation pandemics, government orders, and supply chain disruptions. Stonefield invoked this clause with respect to the COVID-19 pandemic during the period of April 2020 through September 2020.
C. Stonefield's Termination of the TSA
The events leading to Stonefield's termination of the TSA are summarized below and will be the subject of extensive fact discovery. KAG should be familiar with this timeline as it informs the causation, mitigation, and damages analyses.
Cure Notice — January 18, 2022. On January 18, 2022, Stonefield's Director of Contract Compliance, Raymond Hess, issued a formal Cure Notice to Vantor and VTS, directed to the attention of Sandra Milescu, Chief Operating Officer. The Cure Notice identified the following material breaches of the TSA, based on VTS's Q4 2021 performance and rolling performance metrics:
•  On-time pickup rate: 78.2% (vs. the ≥ 95% SLO threshold) — a shortfall of 16.8 percentage points.
•  On-time delivery rate: 81.6% (vs. the ≥ 93% SLO threshold) — a shortfall of 11.4 percentage points.
•  Tender acceptance rate: 71.4% (vs. the ≥ 90% SLO threshold) — a shortfall of 18.6 percentage points.
•  Equipment availability compliance: 62% of committed fleet capacity (approximately 248 tractors vs. the 400 tractors required under the TSA), against the ≥ 85% SLO threshold — a shortfall of 23 percentage points.
•  Cargo claims ratio: 16 cargo claims were filed during November and December 2021, totaling $387,400 in claimed damages. This yielded a claims ratio of approximately 1.07% of gross revenue for that period, significantly exceeding the ≤ 0.5% SLO threshold.
•  Surge capacity failure: The Cure Notice also cited VTS's chronic failure to provide substitute equipment or surge capacity as required under Section 7.4 of the TSA when dedicated equipment was unavailable.
The Cure Notice specified that VTS was required to cure all identified breaches within 30 calendar days, establishing a cure deadline of February 17, 2022.
Vantor's Response — February 14, 2022. On February 14, 2022, three days before the cure deadline, Vantor responded through Derek Pruitt (VP Business Development) in a letter addressed to Janet Kirkwood (VP Carrier Relations, Stonefield). The response acknowledged "operational challenges" but attributed VTS's performance shortfalls to three factors: (i) a nationwide driver shortage that had severely constrained VTS's ability to recruit and retain qualified drivers; (ii) Stonefield's own alleged volume shortfalls, which Vantor contended had reduced the predictability and efficiency of VTS's dedicated operations; and (iii) Stonefield's alleged diversion of volume on Primary Lanes to spot market carriers in violation of the exclusivity provisions of Schedule C.
The response asserted that VTS had achieved "substantial cure" of the identified breaches and referenced several remedial actions undertaken by VTS, including driver recruitment initiatives and equipment maintenance programs. The response also disputed Stonefield's cargo claims data, contending that certain claims were attributable to third-party causes and should not have been counted against VTS's claims ratio.
Termination Letter — March 4, 2022. On March 4, 2022, Tobias Wren, General Counsel of Stonefield, issued a formal termination letter to Vantor Holdings Corp. and Vantor Transport Services LLC. The letter declared that VTS had "failed to cure the material breaches" identified in the Cure Notice within the 30-day cure period and that the TSA was terminated effective immediately under Section 13.1(a). The letter specified that Stonefield considered the termination to be "for Cause" and that accordingly no liquidated damages were owed under Section 14.2.
At the time of termination, the remaining term of the TSA was approximately two years and 27 days — from March 4, 2022 through March 31, 2024. This period is the basis for Vantor's calculation of liquidated damages and lost profits.
D. Procedural Posture at Time of This Memo
The procedural history of this matter is as follows:
August 12, 2022: Vantor filed its original Complaint in the United States District Court for the Southern District of New York, Case No. 22-cv-07841, asserting claims for breach of contract and seeking damages in excess of $95 million.
September 1, 2022: Calderwood & Harkness LLP was engaged to represent Stonefield in this matter. The firm opened the matter under C&H Matter No. 1012-00005.
October 14, 2022: Stonefield filed a Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6). The motion argues, among other things, that the liquidated damages clause in Section 14.2 of the TSA is an unenforceable penalty as a matter of law, and that Vantor's lost profits claim is inadequately pled because the Complaint fails to allege with sufficient specificity the basis for Vantor's claimed operating margins and does not account for VTS's duty to mitigate.
November 18, 2022: Vantor filed its opposition to the Motion to Dismiss. The opposition was recently filed and is currently under review by the C&H team.
The Court has not yet ruled on the motion. Stonefield anticipates that the Court may permit limited amendment of the Complaint and that the matter will proceed to an Answer and discovery phase. At the time of this memorandum, fact discovery has not yet commenced and the Case Management Order has not yet been entered. KAG should anticipate receiving substantial documentary evidence during the discovery phase, including financial records, internal communications, and operational data from both parties.
III. VANTOR'S CLAIMED DAMAGES — OVERVIEW
Based on Vantor's Complaint and its pre-suit demand letter dated April 8, 2022 (in which Vantor demanded $95.4 million in total damages), Vantor's damages framework is as follows:
Several observations about Vantor's damages framework are important for KAG's analysis. First, and most significantly, Vantor appears to claim both liquidated damages ($67,230,000) and lost profits ($18,700,000), which together total $85,930,000. These two categories compensate for the same underlying economic harm — the expected value of the contract over the remaining term — and their simultaneous recovery raises significant issues of duplicative recovery that KAG should carefully analyze. Second, the liquidated damages formula (75% of ACV × remaining years) does not deduct any variable costs, mitigation income, or other offsets, suggesting that the formula may dramatically overstate VTS's actual economic loss. Third, the "stranded assets," "workforce reduction," and "mitigation costs" categories, totaling $9,470,000, are potentially barred by the TSA's mutual consequential damages waiver in Section 15.1, and their economic characterization as direct versus consequential damages will be an important component of KAG's analysis.
IV. KEY ISSUES FOR EXPERT ANALYSIS
The following sections identify the seven principal issues that KAG should analyze in preparing its rebuttal expert report. For each issue, this memorandum provides the relevant legal framework (for economic context), the specific analytical tasks requested of KAG, and preliminary observations from counsel that may inform KAG's approach.
A. Issue 1: Enforceability of the Liquidated Damages Clause (Section 14.2)
Legal Framework.  Under New York law, a liquidated damages clause is enforceable if two conditions are met: (1) the amount specified in the clause is a reasonable forecast of just compensation for the harm that would be caused by a breach, measured at the time the contract was entered into; and (2) the actual damages from the breach are difficult to estimate at the time of contracting. If, by contrast, the clause operates as a "penalty" — that is, if the stipulated amount is grossly disproportionate to the foreseeable harm or if actual damages were readily ascertainable at the time of contracting — the clause is unenforceable. See Northpoint Holdings v. Purdy Corp., 41 N.Y.2d 354 (1977); Kestrel Corporation, 4 N.Y.3d 373 (2005).
The legal analysis of enforceability will be addressed by counsel in Stonefield's briefing. However, KAG's role is to provide the economic analysis and expert opinion that undergirds Stonefield's argument that the liquidated damages clause produces results that are grossly disproportionate to VTS's actual losses from early termination. This economic analysis is essential to the Court's evaluation of the enforceability issue, and KAG's opinion on the disparity between the liquidated damages figure and actual losses will be a central component of Stonefield's defense.
KAG Analysis Requested
KAG should address the following specific analytical questions:
1. Difficulty of Estimation at Time of Contracting. KAG should assess whether actual damages from early termination of a transportation services contract of this nature were, at the time of contracting (March 15, 2019), genuinely difficult to ascertain. In performing this assessment, KAG should consider the availability of market data on prevailing freight rates (both spot and contract), carrier operating margins in the truckload sector, and VTS's own historical financial performance. The freight transportation industry is characterized by extensive data availability, including publicly available benchmarks from Tarrant Software, Dunmore Systems, and other industry sources, as well as VTS's own financial statements reflecting its cost structure and margins. Counsel's preliminary view is that actual damages from early termination were reasonably ascertainable at the time of contracting using standard industry metrics and financial projections, and that the first prong of the enforceability test is therefore not satisfied.
2. Comparison to Reasonable Estimate of Actual Losses. KAG should compare the liquidated damages figure ($67,230,000) to a reasonable estimate of VTS's actual economic losses from early termination of the TSA. This comparison should account for VTS's ability to redeploy its fleet and personnel to replacement freight during the remaining term, VTS's actual cost structure and operating margins on the Stonefield account, and the prevailing freight market conditions during the remaining term period (March 2022 through March 2024). KAG should analyze whether the 75% of ACV formula bears a "reasonable relationship" to VTS's anticipated harm, or whether the formula produces a figure that is untethered from any realistic assessment of loss.
3. Margin Analysis. KAG should evaluate VTS's actual cost structure and operating margins on the Stonefield contract. If VTS's actual operating margins on the SLG contract were in the range of 8% to 12% (as Vantor itself appears to claim in seeking $18.7 million in separate "lost profits" on approximately $86.4 million in remaining committed volume), then VTS's actual lost margin on the remaining term would be in the range of approximately $6.9 million to $10.4 million. The 75% of ACV formula, which produces a figure of $67,230,000, would be approximately 6.5 to 9.7 times the actual lost margin — a disparity that strongly supports Stonefield's argument that the clause operates as a penalty. KAG should develop this analysis rigorously using VTS's financial data once available.
4. Fleet Redeployment Capacity. KAG should consider whether VTS's fleet could be redeployed to alternative freight in the then-prevailing market. The liquidated damages formula assumes that 75% of total contract revenue is lost, without any offset for revenue that VTS could earn by redeploying the dedicated fleet. VTS operated a total fleet of approximately 650 owned tractors and 2,100 trailers; only 400 tractors and 1,200 trailers were committed to the Stonefield contract. The remaining fleet continued to operate on other accounts, demonstrating that VTS had the operational capacity to absorb and redeploy equipment. The failure of the liquidated damages formula to account for mitigation or redeployment income further supports the argument that the clause is punitive rather than compensatory.
5. Gross Disproportionality Opinion. KAG should provide an expert opinion on whether the liquidated damages clause produces results that are "grossly disproportionate" to any reasonable estimate of actual harm from early termination. This opinion should synthesize the margin analysis, fleet redeployment analysis, and market condition analysis described above, and should express a clear conclusion regarding the relationship between the liquidated damages figure and VTS's actual expected losses.
B. Issue 2: Alternative Damages Models — Maximum Recoverable Damages if Termination Found Wrongful
Premise.  In the event the Court determines that Stonefield's termination of the TSA was not validly "for Cause" — that is, that the termination was wrongful — Vantor may be entitled to recover contract damages measured by VTS's actual economic losses from the termination. In that scenario, the applicable measure of damages would be lost profits, not the inflated liquidated damages figure. KAG should prepare an alternative damages analysis assuming wrongful termination, with the objective of establishing the maximum credible damages figure under that scenario. This analysis is critical because it will frame the Court's and the jury's understanding of the realistic damages exposure, which counsel anticipates is substantially lower than the $95.4 million claimed by Vantor.
KAG Analysis Requested
1. Lost Profits Model. KAG should develop a rigorous lost profits model calculating VTS's actual lost profits from the remaining term of the TSA (March 4, 2022 through March 31, 2024). This model should adhere to proper economic methodology and should address the following components:
(a) Actual Operating Margin. KAG should determine VTS's actual operating margin on the Stonefield contract, based on VTS's financial statements, cost allocation methodologies, and the distinction between direct and indirect costs. Vantor claims an average operating margin of 12% on Stonefield freight, but this figure should be independently verified and may be inflated. VTS's cost structure includes driver compensation, fuel costs, equipment depreciation, maintenance, insurance, compliance costs, and allocated overhead. KAG should perform a detailed cost analysis to determine the true incremental margin on the Stonefield contract.
(b) Net Incremental Revenue. The margin should be applied only to the net incremental revenue that VTS would have earned — that is, the revenue that VTS actually lost as a result of the termination, after accounting for VTS's ability to redeploy its fleet and drivers to other freight. Revenue earned from redeployed equipment should be offset against the claimed loss.
(c) discount for Market Risk and Time Value of Money. Lost profits over a two-year forward period must be discounted to present value using an appropriate discount rate that reflects the time value of money and the market risk associated with future freight revenues. KAG should identify an appropriate discount rate based on the capital asset pricing model or comparable methodology.
(d) Volume Adjustments. KAG should account for the likelihood that Stonefield would not have tendered the full ACV during the remaining term, even had the TSA continued. The freight market experienced meaningful softening in 2022, and Stonefield's own FY 2022 revenue declined from approximately $1.42 billion to approximately $1.28 billion — a reduction of approximately 10%. It is probable that Stonefield's volume tenders to VTS would have declined in tandem with the broader market, and VTS's expected revenue should be adjusted accordingly.
2. ACV Shortfall Offset. KAG should analyze whether Stonefield's alleged failure to tender the full Annual Committed Volume in Contract Years 2 and 3 reduces Vantor's damages through an offset or setoff. Specifically:
(a) Contract Year 2 (April 2020 – March 2021). During CY2, Stonefield tendered $31,800,000 in transportation charges against the $43,200,000 ACV. However, Stonefield invoked the force majeure provision under Section 12.1 of the TSA for COVID-19-related impacts during the period of April 2020 through September 2020 — a period of six months. To the extent the force majeure clause is applicable, the adjusted ACV for CY2 would be $43,200,000 × (6/12) = $21,600,000, reflecting only the six-month period during which force majeure did not apply. Stonefield's actual tenders of $31,800,000 exceeded the adjusted ACV by $10,200,000. KAG should evaluate whether the force majeure adjustment is economically reasonable and consistent with the impact of COVID-19 on freight volumes during the relevant period.
(b) Contract Year 3 (April 2021 – March 2022). CY3 was interrupted by the termination; only approximately 10 months elapsed (April 2021 through January 2022, the month of the Cure Notice). During this period, Stonefield tendered $36,500,000. Vantor calculates a shortfall of $6,700,000 ($43,200,000 − $36,500,000). However, because only 10 of 12 months of the contract year had elapsed, a prorated ACV of $43,200,000 × (10/12) = $36,000,000 may be more appropriate, under which Stonefield's actual tenders exceeded the prorated ACV by $500,000. KAG should analyze whether the proration methodology is appropriate and, alternatively, whether any CY3 shortfall should be set off against Vantor's claimed damages.
3. Ceiling on Alternative Damages. KAG should establish a defensible maximum damages figure under the lost profits model that accounts for all of the adjustments described above. Counsel anticipates that this figure should be well below $95.4 million. Based on preliminary internal estimates by the C&H team, the maximum alternative damages figure is likely in the range of $8 million to $10 million, but KAG should develop this analysis independently and arrive at its own conclusion based on the available data. It is important that KAG's analysis be defensible, well-supported, and capable of withstanding cross-examination and Daubert scrutiny.
C. Issue 3: Duplicative Damages — Liquidated Damages and Lost Profits
Vantor's damages framework presents a significant issue of duplicative recovery. As noted above, Vantor claims both liquidated damages of $67,230,000 and lost profits of $18,700,000, which together total $85,930,000. Both of these categories compensate for fundamentally the same economic harm — the expected value of the TSA over the remaining term of the contract. Vantor cannot recover both.
KAG should analyze and opine on whether these categories are economically duplicative. Specifically, KAG should address the following:
(a) The liquidated damages formula under Section 14.2 of the TSA (75% × ACV × remaining years) is intended to serve as the exclusive contractual remedy for early termination not for Cause. The formula is designed to substitute for actual damages, including lost profits. It represents the parties' agreed-upon estimate of the total economic harm VTS would sustain from early termination. If the Court enforces the liquidated damages clause, VTS's lost profits are subsumed within that recovery, and any additional award of lost profits would constitute an impermissible double recovery.
(b) If the Court does not enforce the liquidated damages clause — for example, because it determines the clause is an unenforceable penalty — then only VTS's actual lost profits (properly calculated under standard contract damages principles) are recoverable. The liquidated damages formula would be of no effect, and Vantor would be limited to its actual demonstrated losses. In that scenario, the lost profits figure (properly calculated by KAG as described in Section IV.B above) would be the measure of damages, but recovery of both the unenforceable liquidated damages amount and separate lost profits would remain impermissible.
(c) Under no scenario is simultaneous recovery of both liquidated damages and lost profits economically justified. KAG should provide a clear economic opinion that recovery of both categories would overcompensate Vantor relative to its actual economic loss from the termination of the TSA.
D. Issue 4: Consequential Damages — Stranded Assets, Workforce Reduction, and Mitigation Costs
Consequential Damages Waiver
The TSA contains a mutual consequential damages waiver in Section 15.1. Counsel will argue that three of Vantor's damages categories — stranded assets and costs ($5,200,000), workforce reduction costs ($2,870,000), and mitigation costs ($1,400,000), totaling $9,470,000 — are consequential damages barred by this waiver. KAG's role is to provide economic analysis supporting this characterization.
KAG Analysis Requested
1. Classification of Damages Categories. KAG should classify each of the three categories as either "direct" or "consequential" damages from an economic perspective, applying standard contract damages taxonomy. In general, direct damages (also referred to as "general" damages) are those that flow naturally and directly from the breach — in a contract for services, the lost value of the services themselves (i.e., lost profits on the contract). Consequential damages (also referred to as "special" damages) are those that do not flow directly from the breach but arise from the particular circumstances of the non-breaching party — such as costs of winding down operations, disposing of assets acquired in reliance on the contract, or severance payments to employees hired specifically for the contract.
2. Economic Support for Consequential Classification. KAG should provide economic support for the position that stranded asset costs (depreciation on dedicated equipment and lease termination costs), workforce reduction costs (severance and unemployment costs for approximately 180 drivers and support staff), and mitigation costs are consequential or incidental damages flowing from, but not directly caused by, the breach itself. These categories do not represent the direct loss of value of the contract (which is captured by lost profits); rather, they represent the downstream consequences of the termination on VTS's business operations. Under standard economic analysis, these are second-order effects that depend on VTS's particular business structure, asset mix, and employment practices — precisely the types of damages that a consequential damages waiver is intended to exclude.
3. Independent Analysis of Quantum. Even if these categories survive the consequential damages bar — for example, if the Court determines they constitute direct damages — KAG should analyze whether the claimed amounts are independently supportable or inflated. Specifically:
(a) Stranded Assets ($5,200,000). Vantor claims depreciation losses on tractors and trailers acquired for the Stonefield contract, along with lease termination costs. KAG should analyze whether the equipment claimed as "stranded" had residual value, whether it was or could have been redeployed to other uses, and whether the depreciation figures used by Vantor reflect economic depreciation or merely accounting depreciation. Equipment that is sold, redeployed, or otherwise utilized generates offsetting value that reduces the stranded asset claim.
(b) Workforce Reduction Costs ($2,870,000). Vantor claims severance and unemployment costs for approximately 180 drivers and support staff allegedly terminated as a result of the loss of the Stonefield contract. KAG should analyze whether these employees were in fact terminated, whether they were absorbed into other positions within VTS or Vantor, and whether the severance amounts claimed are reasonable and consistent with VTS's employment practices and applicable law. Additionally, to the extent VTS had been experiencing driver shortages (as acknowledged in its February 14, 2022 response to the Cure Notice), the termination of 180 drivers is incongruous and warrants scrutiny.
(c) Mitigation Costs ($1,400,000). Vantor claims costs incurred in seeking replacement freight. KAG should analyze whether these costs are genuine mitigation expenses or ordinary business costs that VTS would have incurred regardless. To the extent the mitigation efforts yielded replacement revenue, that revenue should offset the claimed mitigation costs.
E. Issue 5: Mitigation Analysis
Legal Premise.  Under New York law, a plaintiff has a duty to take reasonable steps to mitigate its damages following a breach of contract. The plaintiff cannot recover damages that could have been avoided through the exercise of reasonable diligence and effort. The burden of proving failure to mitigate rests with the defendant, and KAG's analysis will be central to establishing this defense.
KAG Analysis Requested
1. Freight Market Conditions. KAG should analyze freight market conditions in Q1 and Q2 2022 — the period immediately following the March 4, 2022 termination — to establish that VTS had meaningful opportunities to redeploy its fleet and mitigate its losses. Preliminary indications suggest that the spot freight market was robust during this period. National average spot rates were elevated approximately 35% above historical averages during Q1 2022, driven by strong consumer demand, inventory restocking, and continued supply chain disruptions. The truckload market experienced tight capacity conditions, with the truck-to-load ratio remaining well below historical averages. These market conditions presented significant opportunities for an asset-based carrier like VTS to earn replacement revenue by deploying idle equipment to the spot market or entering into short-term contract arrangements with other shippers.
2. Reasonable Mitigation Steps. KAG should assess what reasonable mitigation steps VTS could and should have taken following the termination. These steps would include, at a minimum: (a) seeking replacement freight contracts with other shippers to absorb the dedicated fleet capacity previously committed to the Stonefield account; (b) deploying idle tractors and trailers to the spot freight market, where elevated rates were available; (c) entering into short-term or interim arrangements with other shippers or freight brokers; (d) marketing VTS's available capacity through industry channels, load boards, and broker networks; and (e) reassigning displaced drivers to other VTS accounts that were experiencing capacity shortfalls. Given the favorable market conditions in 2022, a reasonable carrier in VTS's position should have been able to replace a substantial portion of the lost Stonefield revenue within a reasonable period.
3. VTS's Actual Mitigation Efforts. KAG should analyze VTS's actual mitigation efforts, to the extent discoverable through fact discovery. Based on the information currently available in Vantor's Complaint and demand letter, VTS claims only $1,400,000 in "mitigation costs" and does not identify specific replacement contracts, replacement revenue earned, or other concrete mitigation actions. The absence of detailed mitigation evidence in Vantor's pleadings suggests that VTS may not have undertaken adequate mitigation efforts — a failure that should reduce any damages award.
4. Quantification of Mitigation Offset. KAG should quantify the impact of Vantor's failure to mitigate — that is, estimate the revenue that VTS could reasonably have earned by redeploying the dedicated fleet (400 tractors and 1,200 trailers, or whatever portion was actually available) to alternative freight during the remaining term of the TSA (March 2022 through March 2024). This analysis should consider the applicable market rates for the types of freight VTS was equipped to handle, the geographic corridors in which VTS operated, and the time required to secure replacement business. The resulting figure should be deducted from any damages award as revenue that VTS could reasonably have earned through mitigation.
5. Fleet Capacity Focus. KAG should pay particular attention to the composition of VTS's fleet. VTS operated a total fleet of approximately 650 owned tractors and 2,100 trailers. Only 400 tractors and 1,200 trailers were committed to the Stonefield contract. The remaining fleet — approximately 250 tractors and 900 trailers — continued to operate on other VTS accounts. The dedicated fleet should have been readily redeployable to other freight, particularly given that VTS's own drivers and support staff were already trained and operationally capable. The existence of a substantial non-dedicated fleet demonstrates that VTS had the operational infrastructure to absorb the dedicated equipment and redeploy it efficiently.
F. Issue 6: VTS Financial Condition and Causation
KAG Analysis Requested
1. Independent Revenue Decline. KAG should examine VTS's and Vantor's financial condition and operational performance independent of the Stonefield contract. Vantor's FY 2022 revenue declined from approximately $385 million (FY 2021) to approximately $310 million (FY 2022) — a decline of approximately $75 million. However, the Stonefield contract had an ACV of $43,200,000, which means that the loss of the Stonefield contract accounts for, at most, approximately $43 million of the $75 million revenue decline. The remaining decline of approximately $32 million is attributable to factors unrelated to the termination — including broader freight market softening, loss of other customers, and operational challenges. KAG should analyze these independent factors and quantify their contribution to Vantor's overall financial decline in order to isolate the portion of the decline that is causally attributable to the TSA termination.
2. Pre-Existing Operational Strain. KAG should assess whether VTS's financial difficulties — including the revenue decline, driver shortages, and fleet redeployment challenges — predated and were independent of the termination. Evidence already available suggests that VTS was experiencing significant operational strain in Q3 and Q4 of 2021, well before Stonefield issued its Cure Notice. Of particular significance is an internal VTS email dated November 12, 2021, from Sandra Milescu (COO) to Nikolai Vantorovich (CEO), in which Milescu acknowledged that VTS had "pulled 85 tractors off the SLG dedicated lanes to cover [other] commitments." This email demonstrates that VTS was unilaterally reducing its fleet dedication to the Stonefield account as early as late 2021, not because of any action by Stonefield but because of VTS's own commercial decision to reallocate equipment to other customers.
3. Self-Inflicted Operational Failures. KAG should analyze whether VTS's performance failures — which formed the basis for Stonefield's termination — were caused by factors within VTS's control (such as the commercial decision to redeploy fleet to other customers) or by exogenous market conditions (such as the nationwide driver shortage). If VTS's failures were self-inflicted — that is, if VTS made affirmative business decisions to reduce its fleet commitment to Stonefield in order to serve other, presumably more profitable, customers — this fact undermines the causal nexus between Stonefield's termination and Vantor's claimed damages. A party cannot recover damages for a termination that was precipitated by its own breach.
4. First-to-Breach Analysis. KAG should assess the economic timeline and sequence of events to determine whether VTS committed the first material breach of the TSA. If VTS unilaterally reduced fleet capacity in October or November 2021 (by pulling 85 tractors off SLG lanes without notification or contractual justification), this may constitute a material breach of the fleet capacity commitment (400 tractors) and the equipment availability SLO (≥ 85% compliance). If VTS breached first, the causal chain between Stonefield's subsequent termination and Vantor's claimed damages may be severed, and VTS may be precluded from recovering damages flowing from its own prior breach. KAG should develop an economic chronology that maps VTS's fleet allocation decisions against the SLO performance data and the contractual requirements.
G. Issue 7: Rate Adjustment Motive — Economic Context
Background.  Vantor alleges that Stonefield terminated the TSA not because of genuine performance concerns but to avoid the April 1, 2022 rate adjustment under the Rate Adjustment Mechanism in Section 5.3 of the TSA. The rate adjustment would have increased per-mile rates from a weighted average of $2.87 to $3.28 — an increase of 14.3%, calculated as ($3.28 − $2.87) / $2.87 = 14.29%. This rate increase, applied across the projected volume for the remaining term, would have added approximately $6.2 million in annual transportation costs to Stonefield, or approximately $12.4 million over the two remaining contract years.
An internal memorandum prepared by Ashford Meridian LLP (Stonefield's transactional counsel, 2200 Ross Avenue, Suite 3600, Dallas, TX 75201; Lorraine Beckwith, Partner) in February 2022 analyzed the financial impact of the rate adjustment. This memorandum may be produced in discovery and may be referenced by Vantor in support of its "pretext" theory.
KAG Analysis Requested
1. Economic Magnitude. KAG should be prepared to address whether the economic magnitude of the rate increase ($6.2 million per year, or $12.4 million over the remaining two years) is consistent with or divergent from a termination-for-cost-savings motive. While the legal question of whether Stonefield's subjective motive is relevant to a "for Cause" termination under the TSA is a legal issue that counsel will address, KAG may be asked to opine on the economics of the alleged motive.
2. Rational Actor Analysis. KAG should compare the cost of the rate increase ($6.2 million per year, or approximately $12.4 million over the two remaining years) to the potential liability from a wrongful termination ($95.4 million as claimed by Vantor; approximately $8 million to $10 million under Stonefield's alternative damages model). A rational economic actor would not terminate a contract to save $12.4 million if doing so exposed the actor to $95.4 million in potential liability — a liability-to-savings ratio of approximately 7.7:1. Even under the more conservative alternative damages estimate of $8 million to $10 million, the potential liability approximately equals or slightly exceeds the cost savings, making termination for cost-avoidance purposes a dubious economic proposition from a risk-adjusted perspective. This analysis supports Stonefield's position that the termination was driven by genuine and documented performance concerns, not by a desire to avoid the rate adjustment.
3. Supporting Stonefield's Defense. This rational actor analysis reinforces the credibility of Stonefield's for-Cause defense. KAG should be prepared to present this analysis as part of its broader economic opinion to counteract Vantor's narrative that the termination was pretextual.
V. DATA AND DOCUMENTS TO BE PROVIDED
Calderwood & Harkness LLP will provide KAG with the following categories of documents and data as they become available through fact discovery and document production. KAG should use these materials as the evidentiary foundation for its expert analysis and report.
1.  The TSA (Contract Ref. No. SLG-VTS-2019-0315), dated March 15, 2019, including all Schedules (Schedule A — Scope of Services; Schedule B — Rate Matrix by Lane; Schedule C — Primary and Secondary Lane Designations; and any others) and any amendments, supplements, or change orders executed during the term.
2.  Stonefield's Cure Notice, dated January 18, 2022, from Raymond Hess (Director, Contract Compliance, Stonefield) to Sandra Milescu (COO, Vantor/VTS).
3.  Vantor's Response to Cure Notice, dated February 14, 2022, from Derek Pruitt (VP Business Development, VTS) to Janet Kirkwood (VP Carrier Relations, Stonefield).
4.  Stonefield's Termination Letter, dated March 4, 2022, from Tobias Wren (General Counsel, Stonefield) to Vantor Holdings Corp. and Vantor Transport Services LLC.
5.  VTS Quarterly and Annual Performance Reports under the TSA, including SLO compliance data, shipment volumes, rate calculations, and fleet utilization metrics for each quarter from the inception of the TSA through termination.
6.  VTS Q4 2021 Performance Report — an internal VTS document showing actual performance metrics below SLO thresholds across all five categories (on-time pickup, on-time delivery, tender acceptance, equipment availability, and cargo claims ratio).
7.  Vantor/VTS Financial Statements (audited and unaudited) for fiscal years 2019, 2020, 2021, and 2022, including income statements, balance sheets, cash flow statements, and management discussion and analysis.
8.  Stonefield Financial Data relevant to volume tenders, rate calculations, and ACV compliance, including invoicing records, shipment-level data, and internal volume tracking reports.
9.  Internal VTS Communications regarding fleet management, driver allocation, and the SLG account, including but not limited to the email dated November 12, 2021 from Sandra Milescu to Nikolai Vantorovich referencing the redeployment of 85 tractors from SLG dedicated lanes.
10.  Internal Stonefield Communications relevant to the Vantor relationship, including but not limited to the email dated September 22, 2021 from Janet Kirkwood (VP Carrier Relations) to Carlos Medina (SVP Operations) regarding concerns about VTS's performance.
11.  Ashford Meridian LLP Rate Adjustment Analysis Memo, prepared in February 2022 by Lorraine Beckwith, Partner, analyzing the financial impact of the April 1, 2022 rate adjustment under Section 5.3 of the TSA.
12.  Industry Data on freight market conditions, including spot rates, contract rates, driver availability, capacity utilization, and market indices for the period 2019 through 2024, from sources including Tarrant Software, Dunmore Systems, ATRI, American Trucking Associations, and other relevant industry publications.
13.  Vantor's Demand Letter, dated April 8, 2022, and any supporting calculations, schedules, or analyses provided with or referenced in the demand letter.
14.  Trask Greystone's Expert Report, once served by Vantor during the expert discovery phase. C&H will transmit this report to KAG promptly upon receipt to enable timely commencement of the rebuttal analysis.
15.  VTS Fleet Records, including equipment inventory records, lease agreements for tractors and trailers, equipment depreciation schedules, maintenance records, and disposal/sale records for equipment claimed as "stranded assets."
16.  VTS Employment Records related to workforce reduction, including severance agreements, termination notices, unemployment filings, and driver-level records for the approximately 180 drivers and support staff allegedly terminated as a result of the loss of the Stonefield contract.
17.  Documents Produced by Vantor or Third Parties during discovery relevant to VTS's mitigation efforts, including correspondence with prospective replacement customers, load board records, broker communications, and financial records reflecting replacement freight revenue.
Document discovery has not yet commenced in this matter. Calderwood & Harkness LLP anticipates serving Stonefield's first set of discovery requests in early 2023, with initial document productions from Vantor expected in the spring of 2023. Documents will be transmitted to KAG on a rolling basis as productions are received, reviewed for relevance and privilege, and cleared for expert access.
eDiscovery for this matter is managed by Pinnacle Forensics LLC. The client engagement director is Nathan Billings, and the project has been assigned Project ID: PF-SLG-2022-0914. Pinnacle's offices are located at 12000 Findley Road, Suite 200, Johns Creek, Georgia 30097. KAG may be provided direct access to the Pinnacle review platform for certain document sets relevant to the economic analysis, subject to appropriate access controls and confidentiality protections. C&H will coordinate platform access with Pinnacle as appropriate.
VI. ANTICIPATED EXPERT REPORT AND DELIVERABLES
Rebuttal Expert Report
KAG's primary deliverable will be a written rebuttal expert report prepared in compliance with Federal Rule of Civil Procedure 26(a)(2)(B). The report must contain a complete statement of all opinions Dr. Rosser will express and the basis and reasons for each opinion, the facts and data considered in forming each opinion, any exhibits to be used to summarize or support each opinion, Dr. Rosser's qualifications including a list of publications authored within the preceding ten years, a list of all cases in which Dr. Rosser has testified as an expert at trial or by deposition during the preceding four years, and a statement of the compensation to be paid for the study and testimony in the case.
Substantively, the rebuttal expert report should accomplish the following:
1.  Respond to and rebut each damages category claimed by Vantor and quantified by Trask Greystone & Associates in its expert report. KAG should systematically address the liquidated damages claim, the lost profits claim, the stranded assets claim, the workforce reduction costs claim, and the mitigation costs claim, identifying methodological flaws, unsupported assumptions, and errors in calculation.
2.  Provide KAG's independent damages analysis under the alternative scenarios described in Section IV of this memorandum, including the enforceability/penalty analysis for the liquidated damages clause, the alternative lost profits model, the duplicative damages analysis, the consequential damages classification, the mitigation analysis, and the causation analysis.
3.  Include detailed calculations, supporting exhibits, data sources, and methodology descriptions sufficient to allow the Court and the opposing expert to evaluate and replicate KAG's analysis. All data inputs, assumptions, and intermediate calculations should be transparent and well-documented.
4.  Comply with *Daubert* standards for reliability and relevance. The expert report must demonstrate that KAG's methodology is the product of reliable principles and methods, that those principles and methods have been reliably applied to the facts of the case, and that the testimony is based on sufficient facts or data. KAG should be prepared to defend its methodology against a Daubert challenge.
Timeline
The Case Management Order has not yet been entered, but C&H anticipates that expert reports will be due in mid-to-late 2023. Under the anticipated CMO, Vantor (as the plaintiff) will serve its opening expert report first, and Stonefield will have approximately 90 days thereafter to serve its rebuttal expert report. Calderwood & Harkness LLP will advise KAG of the specific deadlines once the CMO is issued by the Court. KAG should plan accordingly and ensure that adequate resources are available to meet the rebuttal report deadline.
Deposition and Trial Testimony
Dr. Rosser should be prepared for deposition by Vantor's counsel following the service of the rebuttal expert report. Expert depositions are typically scheduled within 30 to 60 days of the completion of expert report exchanges. Dr. Rosser should also be prepared for trial testimony if the case proceeds to trial, which C&H currently anticipates could occur in late 2024 or early 2025 depending on the pace of discovery and any pre-trial motions practice.
Interim Deliverables
As the case develops, C&H may request preliminary analyses, draft calculations, or informal memoranda on specific issues identified in this memorandum. Such interim work product should be labeled "DRAFT — Attorney Work Product" and should not be distributed outside the KAG-C&H engagement team without prior authorization from C&H. These materials may be subject to discovery in certain circumstances, and C&H will provide guidance on appropriate handling.
VII. BUDGET AND BILLING
As set forth in the retention letter of October 28, 2022, the agreed-upon hourly rates for KAG's engagement are $625 per hour for Dr. Evelyn Rosser (Managing Director and lead expert) and $375 per hour for Michael Chung (Senior Analyst). These rates apply to all time spent in connection with this engagement, including research, analysis, report preparation, communications with counsel, deposition preparation, and testimony.
The initial budget estimate for KAG's engagement through completion of the rebuttal expert report is $180,000 to $250,000. This estimate is based on the scope of work described in this memorandum and assumes a standard discovery process without extraordinary complications. The budget may be revised upward if the scope of the engagement expands — for example, if KAG is asked to prepare an affirmative damages analysis (in addition to the rebuttal report), supplemental expert reports in response to reply or surrebuttal reports by Trask Greystone, or additional analyses of new damages theories not yet as

PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT — PREPARED IN ANTICIPATION OF LITIGATION

EXPERT SCOPE MEMORANDUM

I. PURPOSE AND INTRODUCTION

II. BACKGROUND SUMMARY

IV. KEY ISSUES FOR EXPERT ANALYSIS

V. DATA AND DOCUMENTS TO BE PROVIDED

VI. ANTICIPATED EXPERT REPORT AND DELIVERABLES

VII. BUDGET AND BILLING

Record

Parties

Dates

Amounts