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EXPERT REBUTTAL REPORT OF DR. EVELYN ROSSER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

VANTOR HOLDINGS CORP.,

Plaintiff,

STONEFIELD LOGISTICS GROUP INC.,

Defendant.

Case No. 22-cv-07841

Before the Honorable Margaret T. Calloway, United States District Judge

Submitted on Behalf of Defendant Stonefield Logistics Group Inc.

August 25, 2023

Prepared by:

Dr. Evelyn Rosser Managing Director Kensington Analytics Group LLC 1700 Market Street, Suite 2800 Philadelphia, Pennsylvania 19103 Telephone: (215) 555-7200

Email: erosser@kensingtonanalytics.com

Assisted by:

Michael Chung Senior Analyst Kensington Analytics Group LLC 1700 Market Street, Suite 2800 Philadelphia, Pennsylvania 19103

I. INTRODUCTION AND PURPOSE OF REPORT

A. Engagement and Scope

1. I, Dr. Evelyn Rosser, have been retained by Calderwood & Harkness LLP, counsel for Defendant Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), to serve as an expert witness in the above-captioned matter. My retention was effected pursuant to an engagement letter dated October 28, 2022, executed by Samuel Eklund, Responsible Partner at Calderwood & Harkness LLP. I have been asked to analyze and rebut the damages opinions set forth in the expert report of Dr. Philip Trask of Trask Greystone & Associates, dated May 15, 2023 (the "Trask Report"), which was submitted on behalf of Plaintiff Vantor Holdings Corp. ("Vantor").

2. Specifically, the scope of my engagement encompasses the following four areas of inquiry:

(i) Evaluation of the Trask Report. I have been asked to evaluate the methodology, assumptions, and conclusions contained in the Trask Report, and to identify errors, omissions, and deficiencies in Dr. Trask's analysis that materially affect the reliability of his damages opinions.

(ii) Independent Damages Analysis. I have been asked to provide my own independent analysis of damages, if any, that Vantor and its operating subsidiary Vantor Transport Services LLC ("VTS") could claim under the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Reference No. SLG-VTS-2019-0315), considering appropriate economic adjustments, offsets, and proper damages methodology.

(iii) Liquidated Damages Assessment. I have been asked to assess the enforceability of the liquidated damages clause set forth in Section 14.2 of the TSA from an economic perspective, evaluating whether the formula produces results that constitute a reasonable pre-estimate of anticipated harm or, alternatively, whether the clause operates as an unenforceable penalty under applicable law.

(iv) Mitigation Analysis. I have been asked to analyze Vantor's mitigation efforts and obligations in the period following the termination of the TSA, including an assessment of the freight market conditions that existed during the relevant period and the extent to which Vantor took — or failed to take — reasonable steps to mitigate its alleged damages.

3. In conducting my analysis, I have drawn upon my more than twenty years of experience in transportation economics, freight brokerage, managed transportation, and contract damages quantification. I have reviewed the TSA and its schedules and amendments, the Trask Report and its supporting materials, the parties' document productions, deposition transcripts, financial statements, industry data, and the other materials identified in Appendix B to this Report.

B. Summary of Opinions

4. Based on my analysis of the record evidence, the Trask Report, the applicable economic principles, and the relevant industry data, I have formed the following three principal opinions, each of which I hold to a reasonable degree of economic certainty:

Opinion 1: If Stonefield validly terminated the TSA for Cause under Section 13.1(a), Vantor is entitled to zero ($0) in damages, as no breach occurred giving rise to liability.

5. The documentary and testimonial evidence establishes that VTS simultaneously failed to meet all five Service Level Obligations ("SLOs") set forth in the TSA during the fourth quarter of 2021. These failures were severe, sustained, and pervasive across every performance dimension measured by the TSA. Moreover, the evidence demonstrates that VTS's performance failures were not the result of exogenous market conditions, but rather were directly caused by VTS's voluntary decision in October 2021 to redeploy at least 85 tractors from dedicated SLG lanes to serve the Northwind Distribution Co. account, without notice to or authorization from Stonefield. VTS failed to cure these material breaches within the 30-day cure period prescribed by Section 13.2 of the TSA. If Stonefield's termination of the TSA was valid for Cause, no breach by Stonefield occurred, and Vantor's entire damages claim of $95.4 million fails as a matter of economic causation.

Opinion 2: Under an alternative lost-profits analysis — assuming arguendo that the termination was wrongful — the maximum damages recoverable by Vantor are approximately $8.2 million, after properly accounting for (a) Vantor's own antecedent breaches, (b) Vantor's complete failure to mitigate damages, (c) market-based adjustments, and (d) the elimination of duplicative and barred damages categories.

6. Even if one assumes for purposes of analysis that Stonefield's termination of the TSA was wrongful — a premise I do not accept — the maximum damages to which Vantor could be entitled are dramatically lower than the $95.4 million claimed in the Trask Report. Dr. Trask's damages figure is inflated by his use of an unsupported 12% operating margin that does not reflect the SLG-specific account profitability, his failure to make any adjustment for the significant softening in the national freight market that occurred during the remaining contract term, his failure to apply any offset for VTS's own antecedent material breaches of the TSA, his complete disregard for Vantor's duty to mitigate damages, his inclusion of $9.47 million in consequential and incidental damages that are expressly barred by the TSA's mutual consequential damages waiver (Section 15.1), and his duplicative claiming of both liquidated damages and lost profits to compensate for the same underlying economic harm. When these errors and omissions are corrected, the maximum damages recoverable by Vantor under a properly constructed lost-profits analysis are approximately $8.2 million — a figure that itself represents a conservative upper-bound estimate from Stonefield's perspective.

Opinion 3: The liquidated damages formula in Section 14.2 of the TSA produces results grossly disproportionate to any measure of actual or reasonably anticipated harm, supporting a finding that the clause constitutes an unenforceable penalty under New York law.

7. The Section 14.2 liquidated damages formula — 75% of the Annual Committed Volume ("ACV") multiplied by the number of full and partial contract years remaining — produces a liquidated damages amount of $67,230,000 in this case. This amount exceeds the maximum actual damages I have calculated by a factor of approximately 8.2 times ($67.23 million divided by $8.2 million). Even using Dr. Trask's own inflated lost-profits figure of $18.7 million, the liquidated damages amount is approximately 3.6 times greater than the actual lost profits claimed by Vantor's own expert. The formula uses 75% of gross revenue as its base — a figure that bears no reasonable relationship to VTS's actual economic loss, given that VTS's operating margin on the SLG account was approximately 7 to 8 percent. The clause effectively compensates VTS at ten times its actual margin, ignores VTS's duty to mitigate, and fails to account for VTS's ability to redeploy its fleet and personnel to other revenue-generating activities. From an economic perspective, the clause functions as a penalty, not as a reasonable pre-estimate of anticipated harm, and is an outlier relative to early termination provisions in comparable freight transportation contracts.

C. Statement of Qualifications

8. I am the Managing Director of Kensington Analytics Group LLC, an economic consulting firm based in Philadelphia, Pennsylvania that specializes in transportation economics, logistics and supply chain economics, and commercial damages analysis. I hold a Ph.D. in Economics from the University of Pennsylvania, where my doctoral research focused on industrial organization and the economics of freight transportation markets. I also hold a Master of Arts in Economics from the University of Pennsylvania and a Bachelor of Arts in Economics, magna cum laude, from Georgetown University.

9. I have over twenty years of professional experience in transportation economics and contract damages analysis. My career has encompassed positions in academia, government, and the private sector. Prior to founding Kensington Analytics Group in 2012, I served as a Senior Economist at the Surface Transportation Board of the United States Department of Transportation, where I was responsible for economic analyses of freight rail competition, shipper-carrier disputes, and market dominance determinations. Before my government service, I held a faculty appointment as Assistant Professor of Economics at the Wharton School of the University of Pennsylvania, where I taught courses in industrial organization, transportation economics, and applied microeconometrics.

10. My areas of particular specialization include freight brokerage economics, managed transportation services, truckload and less-than-truckload pricing and capacity analysis, supply chain contract disputes, and the economic analysis of commercial damages in transportation-related litigation. I have published numerous articles and book chapters in peer-reviewed journals and edited volumes on topics including freight rate structures, shipper-carrier contracting practices, the economics of freight intermediation, and damages methodology in commercial disputes.

11. Over the course of my career, I have been retained as an expert in over forty commercial litigation matters involving transportation contracts, damages quantification, and economic loss analysis. I have provided both consulting and testifying expert services in matters involving freight brokerage agreements, dedicated transportation services agreements, managed transportation programs, intermodal service contracts, and related commercial disputes. I have been qualified as an expert and have offered testimony in the United States District Courts for the Southern District of New York, the Eastern District of Pennsylvania, the Northern District of Texas, the Northern District of Illinois, the Central District of California, and the District of New Jersey, as well as in state courts in New York, Pennsylvania, Texas, and Illinois. A complete list of my prior testimony in the past four years, as well as my curriculum vitae, list of publications, and prior expert retentions, is set forth in Appendix A to this Report.

12. My compensation for this engagement is $625 per hour. Michael Chung, a Senior Analyst at Kensington Analytics Group who has assisted me in preparing this Report, is compensated at $375 per hour. Neither my compensation nor Mr. Chung's compensation is contingent in any way upon the opinions expressed in this Report or upon the outcome of this litigation.

II. BACKGROUND AND KEY FACTS

A. The Parties

13. Stonefield Logistics Group Inc. Stonefield is a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield is a mid-market freight brokerage and managed transportation company that provides a broad range of transportation management services to shippers across the United States. Stonefield operates a carrier network of approximately 12,000 approved carriers and handles approximately 850,000 shipments annually across multiple modes, including full truckload ("TL"), less-than-truckload ("LTL"), intermodal, and last-mile delivery services.

14. For fiscal year 2021, Stonefield reported total revenue of approximately $1.42 billion. For fiscal year 2022, Stonefield's total revenue declined to approximately $1.28 billion, reflecting a year-over-year decline of approximately 9.9 percent. This decline was consistent with broader softening in the national freight market during that period, as I discuss in greater detail below. Stonefield's fiscal year 2022 earnings before interest, taxes, depreciation, and amortization ("EBITDA") were approximately $118 million. Stonefield employs approximately 2,800 people across its headquarters, regional offices, and operating facilities.

15. Stonefield has been majority-owned since October 2017 by Ridgeline Capital Partners, LP ("Ridgeline"), a middle-market private equity firm. Ridgeline acquired Stonefield through a leveraged buyout transaction at an enterprise value of approximately $680 million. Ridgeline holds approximately 72 percent of Stonefield's equity through Ridgeline Fund III, LP. The private equity ownership structure is relevant to this case insofar as it underscores that Stonefield is a sophisticated commercial enterprise with access to substantial financial and operational resources, including professional contract compliance and risk management functions.

16. Vantor Holdings Corp. Vantor is a New York corporation headquartered at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Vantor is a holding company whose primary operating subsidiary is VTS (discussed below). Vantor was founded by Nikolai Vantorovich, who serves as the company's Chief Executive Officer and holds an approximately 58 percent ownership interest. For fiscal year 2021, Vantor reported consolidated revenue of approximately $385 million. For fiscal year 2022, Vantor's consolidated revenue declined to approximately $310 million, representing a year-over-year decrease of approximately 19.5 percent — approximately double the rate of decline experienced by Stonefield during the same period and nearly double the rate of decline experienced by the national truckload freight market. Vantor employs approximately 1,900 people.

17. Vantor Transport Services LLC. VTS is a New York limited liability company and the wholly owned operating subsidiary of Vantor. VTS was the signatory counterparty to the TSA at issue in this litigation, serving as the "Carrier-Provider" under the agreement. VTS operates both asset-based and asset-light trucking services, as well as warehousing and regional distribution services. At the time of the TSA's execution, VTS operated approximately 650 owned tractors and 2,100 trailers, with additional capacity sourced through independent owner-operators under contract. VTS's operations are concentrated in the Northeast, Mid-Atlantic, and Southeast freight corridors, which are among the most active and competitive freight lanes in the United States.

18. Ridgeline Capital Partners, LP. As noted above, Ridgeline is a middle-market private equity firm that has held a majority equity stake in Stonefield since its 2017 leveraged buyout. Ridgeline Fund III, LP holds approximately 72 percent of Stonefield's equity. Ridgeline's involvement is relevant to the economic analysis in this Report primarily in two respects: first, it confirms that Stonefield operated under institutional governance and professional management oversight during the period at issue; and second, Ridgeline's ownership structure and portfolio management practices inform the assessment of Stonefield's commercial decision-making regarding the TSA termination and rate adjustment considerations discussed in Section IX below.

B. The Transportation Services Agreement

19. The Transportation Services Agreement at the center of this dispute was executed on March 15, 2019, between Stonefield, in its capacity as "Shipper-Broker," and VTS, in its capacity as "Carrier-Provider" (the "TSA," Contract Reference No. SLG-VTS-2019-0315). The TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. The agreement is governed by the laws of the State of New York, as specified in the choice-of-law provision at Section 16.4. A thorough understanding of the TSA's material terms is essential to evaluating the parties' respective obligations, the validity of the termination, and the calculation of damages.

20. Term. The TSA provided for an initial term of five years, commencing on April 1, 2019 and extending through March 31, 2024. The agreement included a provision for one automatic two-year renewal, extending the term through March 31, 2026, unless either party provided 180 days' prior written notice of non-renewal. As of the termination date of March 4, 2022, the TSA had been in effect for approximately two years and eleven months, with approximately two years and twenty-seven days remaining on the initial five-year term.

21. Scope of Services. Under the TSA, VTS committed to providing dedicated and on-demand truckload transportation services to Stonefield across the Northeast, Mid-Atlantic, and Southeast corridors. These services encompassed the transportation of freight tendered by Stonefield and its shipper customers, utilizing VTS's owned tractors and trailers as well as capacity sourced through VTS's owner-operator network. As part of its obligations, VTS committed to maintaining a minimum fleet capacity of 400 tractors and 1,200 trailers available for SLG-dedicated service at all times during the term. This minimum fleet commitment was a material element of the bargain, as Stonefield relied upon VTS's dedicated capacity to fulfill its own commitments to its shipper customers.

22. Annual Committed Volume. The TSA established an Annual Committed Volume ("ACV") of $43.2 million per contract year, representing the minimum annualized revenue that VTS was entitled to receive from Stonefield for freight tendered under the agreement. Over the full five-year initial term, the total minimum commitment equaled $216 million ($43.2 million multiplied by five years). The ACV served both as a floor for Stonefield's volume commitment and as the basis for the rate adjustment mechanism and the liquidated damages formula.

23. Rate Structure. Per-mile rates were established on a lane-by-lane basis in Schedule B to the TSA. The TSA designated specific freight lanes — origin-destination pairs — in which VTS would provide service, with rates set at levels that were competitive at the time of contracting. The agreement further provided, in Section 5.3, a Rate Adjustment Mechanism that called for annual rate adjustments each April 1 based on a blended index formula: 70 percent weighted to a diesel fuel index component and 30 percent weighted to the Consumer Price Index for All Urban Consumers ("CPI-U"). This mechanism was designed to adjust rates to reflect changes in VTS's two principal cost drivers — fuel and labor/general inflation — but, as I discuss below, the mechanism did not fully insulate VTS from cost pressures and in fact contributed to margin compression on the SLG account.

24. Service Level Obligations. The TSA established five Service Level Obligations ("SLOs") that VTS was required to meet on a continuous basis throughout the term. These SLOs measured VTS's operational performance across the dimensions most material to Stonefield's ability to serve its own customers:

(a) On-time pickup: VTS was required to achieve an on-time pickup rate of at least 95 percent, measured as the percentage of loads picked up within the contracted pickup window.

(b) On-time delivery: VTS was required to achieve an on-time delivery rate of at least 93 percent, measured as the percentage of loads delivered within the contracted delivery window.

(c) Cargo claims ratio: VTS was required to maintain a cargo claims ratio of no more than 0.5 percent of gross revenue, calculated as the aggregate value of filed cargo damage and loss claims as a percentage of total freight revenue under the TSA.

(d) Tender acceptance rate: VTS was required to accept at least 90 percent of all freight tenders submitted by Stonefield under the TSA.

(e) Equipment availability: VTS was required to maintain equipment availability at or above 85 percent of the committed fleet capacity of 400 tractors, meaning that at least 340 tractors were to be available for SLG-dedicated service at all times.

25. These SLOs were not aspirational targets; they were binding contractual obligations. The thresholds themselves were consistent with industry standards for dedicated truckload service agreements and reflected the minimum performance levels necessary to support a reliable, high-service freight network.

26. Liquidated Damages. Section 14.2 of the TSA established a liquidated damages formula applicable in the event that Stonefield terminated the agreement other than "for Cause." Under this provision, liquidated damages were calculated as 75 percent of the ACV multiplied by the number of full and partial contract years remaining on the term at the time of termination. As I discuss at length in Section VII of this Report, this formula produces results that are grossly disproportionate to any reasonable measure of actual or anticipated harm.

27. Termination for Cause. Section 13.1 of the TSA set forth the grounds upon which either party could terminate the agreement for Cause. These grounds included: (a) a material breach of the agreement that remained uncured for 30 calendar days after written notice specifying the breach with reasonable particularity (Section 13.2); (b) the insolvency or bankruptcy of the other party; (c) the failure of the other party to maintain required insurance coverage for more than 15 days; and (d) a material violation of applicable law, including regulations promulgated by the United States Department of Transportation ("DOT") and the Federal Motor Carrier Safety Administration ("FMCSA"). Stonefield terminated the TSA on March 4, 2022, invoking Section 13.1(a) — material breach uncured after the 30-day cure period.

28. Cure Notice Procedure. Section 13.2 required the terminating party to provide written notice specifying with reasonable particularity the alleged breach and the applicable cure period. The non-breaching party then had 30 calendar days from receipt of such notice to cure the identified breach or breaches.

29. Consequential Damages Waiver. Section 15.1 of the TSA contained a mutual waiver of consequential damages. Under this provision, neither party could recover consequential, special, incidental, or punitive damages arising from or related to any breach or termination of the agreement. As I discuss in Section VIII, Dr. Trask's report includes $9.47 million in damages categories that are properly characterized as consequential or incidental damages and are therefore barred by Section 15.1.

30. Force Majeure. Section 12.1 of the TSA contained a force majeure provision applicable to performance excused by qualifying events, including pandemics. As discussed in Section VIII.C, Stonefield properly invoked this provision during the COVID-19 pandemic period from April 2020 through September 2020.

C. Termination Chronology

31. The following chronology sets forth the key events leading to Stonefield's termination of the TSA, drawing upon the contemporaneous documents and deposition testimony in the record:

32. Q4 2021: VTS Performance Failures. Beginning in the fourth quarter of 2021, VTS's performance metrics fell below the SLO thresholds established by the TSA across all five categories simultaneously. Based on my independent analysis of VTS's Q4 2021 Performance Report and the data reported through Stonefield's Carrier Performance Portal, VTS's actual performance during this period was as follows:

(a) On-time pickup: 78.2 percent, versus the 95 percent SLO threshold — a shortfall of 16.8 percentage points.

(b) On-time delivery: 81.6 percent, versus the 93 percent SLO threshold — a shortfall of 11.4 percentage points.

(d) Equipment availability: Approximately 62 percent of committed fleet capacity, equating to approximately 248 tractors available for SLG-dedicated service versus the required 340 tractors (85 percent of the 400-tractor commitment) — a shortfall of approximately 92 tractors.

(e) Cargo claims ratio: 1.07 percent of gross revenue, versus the 0.5 percent SLO threshold. During November and December 2021 alone, VTS incurred 16 cargo claims totaling $387,400 — more than double the permitted threshold.

33. The simultaneous failure across all five SLO categories was unprecedented during the life of the TSA. As I discuss in Section IV below, the nature and magnitude of these failures reflected a fundamental breakdown in VTS's commitment to the SLG contract, driven not by exogenous market forces but by VTS's deliberate decision to redeploy fleet assets away from SLG-dedicated service.

34. November 12, 2021: Internal VTS Email Regarding Fleet Redeployment. On November 12, 2021, Sandra Milescu, VTS's Chief Operating Officer, sent an internal email to Nikolai Vantorovich, Vantor's CEO and founder. This email, produced during discovery as document VHC-008417, stated in relevant part: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." The redacted reference was subsequently identified, through Vantor's supplemental document production, as a reference to the Northwind Distribution Co. account. Additional documents in the supplemental production confirmed that the fleet redeployment from SLG-dedicated lanes to Northwind Distribution Co. lanes had commenced in October 2021, approximately one month before the date of the Milescu email. This evidence is critical because it establishes that VTS's SLO failures were not the product of external market conditions, as Vantor has alleged, but rather were the direct consequence of VTS's own voluntary decision to divert contractually committed fleet resources to another customer.

35. January 18, 2022: Stonefield Cure Notice. On January 18, 2022, Raymond Hess, Stonefield's Director of Contract Compliance, issued a formal written Cure Notice to Sandra Milescu at VTS, in accordance with Section 13.2 of the TSA. The Cure Notice identified with reasonable particularity VTS's failures across all five SLO categories and cited VTS's chronic failure to provide substitute equipment as required by Section 7.4 of the TSA. The Cure Notice triggered the 30-day cure period set forth in Section 13.2.

36. February 14, 2022: Vantor Response. On February 14, 2022, Derek Pruitt, Vantor's Vice President of Business Development, submitted VTS's written response to the Cure Notice. In this response, Vantor acknowledged "operational challenges" but attributed VTS's performance deficiencies to three purported causes: (i) the nationwide driver shortage affecting the trucking industry; (ii) Stonefield's alleged failure to tender minimum committed volumes under the ACV; and (iii) Stonefield's alleged instructions to divert volume from VTS to spot market carriers. Vantor also disputed certain of the cargo claims data cited in the Cure Notice and asserted that VTS had achieved "substantial cure" of the identified deficiencies.

37. Notably, Vantor's February 14 response did not acknowledge, address, or disclose the voluntary fleet redeployment to Northwind Distribution Co. that was the actual cause of VTS's SLO failures. Nor did the response provide any specific evidence or data demonstrating that VTS had actually returned the redeployed tractors to SLG-dedicated lanes or otherwise cured the identified breaches. As I discuss in Section IV.C, the available evidence indicates that VTS did not, in fact, cure its material breaches during the cure period.

38. February 17, 2022: Cure Period Expiration. The 30-day cure period prescribed by Section 13.2 of the TSA expired on February 17, 2022 — 30 calendar days after VTS's receipt of the January 18 Cure Notice.

39. March 4, 2022: Stonefield Termination Letter. On March 4, 2022, Tobias Wren, Stonefield's General Counsel, issued a formal termination letter to Vantor and VTS, stating that VTS had failed to cure the material breaches identified in the January 18 Cure Notice within the 30-day cure period. The letter stated that the TSA was terminated immediately pursuant to Section 13.1(a).

40. At the time of termination, the remaining term of the TSA was approximately two years and twenty-seven days — from March 4, 2022 through March 31, 2024.

D. Materials Reviewed

41. In forming the opinions set forth in this Report, I have reviewed and considered an extensive body of documentary evidence, deposition testimony, financial data, industry data, and other materials. The complete list of materials reviewed is set forth in Appendix B. Below, I identify the principal categories and items of materials reviewed:

(a) Contract Documents. The TSA and all schedules and amendments thereto (Contract Reference No. SLG-VTS-2019-0315), including Schedule B (lane-specific rates), Schedule C (lane designations and exclusivity provisions), and the Rate Adjustment Mechanism set forth in Section 5.3.

(b) Termination-Related Correspondence. The Cure Notice dated January 18, 2022, from Raymond Hess to Sandra Milescu; Vantor's response dated February 14, 2022, from Derek Pruitt; and the Termination Letter dated March 4, 2022, from Tobias Wren.

(c) Expert Report. The expert report of Dr. Philip Trask, Trask Greystone & Associates, dated May 15, 2023, including all exhibits, appendices, and supporting materials.

(d) Document Productions. Vantor's document productions (comprising 28,914 documents in the initial production and 4,218 documents in the supplemental production) and Stonefield's document productions (comprising 42,387 documents).

(e) Internal Performance Data. VTS's Q4 2021 Performance Report (an internal VTS document) and Stonefield's Carrier Performance Portal data for VTS.

(f) Financial Statements. VTS's financial statements for fiscal years 2019 through 2022 and Stonefield's financial statements for fiscal years 2019 through 2022.

(g) Deposition Transcripts. The deposition transcripts of Derek Pruitt (July 10, 2023), Janet Kirkwood (July 14, 2023), Raymond Hess (July 27, 2023), Sandra Milescu (August 4, 2023), and Nikolai Vantorovich (partial transcript, August 18, 2023).

(h) Rate Analysis. The Ashford Meridian LLP rate adjustment analysis memorandum dated February 2022, analyzing the projected impact of the April 2022 rate adjustment under Section 5.3 of the TSA.

(i) Industry Data. Freight market indices, including spot and contract rate data from Tarrant Software and the Dunmore Systems; diesel fuel index data from the U.S. Energy Information Administration; CPI-U data from the U.S. Bureau of Labor Statistics; and driver shortage statistics from the American Trucking Associations.

(j) Fleet and Operational Records. Vantor's and VTS's fleet management and deployment records, including tractor and trailer assignment logs, driver assignment records, and lane-by-lane utilization data.

(k) discovery Responses. Vantor's interrogatory responses and responses to Stonefield's requests for admission.

(l) Third-Party Subpoena Responses. Documents produced by Cascade Freight Systems Inc. and Briarwood Trucking Co. in response to subpoenas issued by Stonefield.

42. In addition to the foregoing, I have reviewed academic and professional literature on transportation economics, freight market dynamics, and damages quantification methodology, as detailed in Appendix B.

III. OVERVIEW OF THE TRASK REPORT AND ITS DAMAGES METHODOLOGY

A. Summary of the Trask Report's Conclusions

43. Dr. Trask's Report, submitted on behalf of Vantor, opines that Vantor's total damages from Stonefield's termination of the TSA are $95,400,000. Dr. Trask presents this figure as the sum of six separate damages categories, as follows:

44. As I discuss in detail in Sections IV through IX of this Report, Dr. Trask's $95.4 million damages figure is inflated, unreliable, and fundamentally flawed. His analysis is marred by a series of interrelated errors and omissions: he mechanically applies the liquidated damages formula without conducting any independent economic assessment of its enforceability; he uses inflated margin assumptions that do not reflect the SLG-specific account profitability; he fails to account for Vantor's own antecedent material breaches; he makes no adjustment whatsoever for Vantor's failure to mitigate damages; he includes $9.47 million in consequential damages that are expressly barred by the TSA's mutual waiver; and he claims both liquidated damages and lost profits, resulting in duplicative recovery for the same economic harm. Each of these deficiencies, standing alone, renders his damages opinion unreliable. Taken together, they result in a damages figure that is approximately 11.6 times greater than the maximum actual damages recoverable by Vantor.

B. Trask's Methodology — Liquidated Damages

45. The largest component of Dr. Trask's damages figure — $67,230,000, representing approximately 70.5 percent of his total — consists of liquidated damages calculated by mechanical application of the formula set forth in Section 14.2 of the TSA. Specifically, Dr. Trask calculates liquidated damages as follows:

• For the two full contract years remaining at termination: 75% × $43,200,000 ACV × 2 years = $64,800,000.

• For the 27-day partial contract year remaining: 75% × $43,200,000 × (27/365) = $2,396,712, which Dr. Trask rounds to $2,430,000.

• Total liquidated damages: $67,230,000 (combining the two full-year and partial-year calculations).

46. Dr. Trask assumes, without conducting any independent economic analysis, that the Section 14.2 liquidated damages clause is enforceable and represents a reasonable pre-estimate of Vantor's anticipated damages from early termination. His report contains no discussion whatsoever of whether the formula bears a reasonable relationship to Vantor's actual or anticipated economic harm. He does not compare the liquidated damages amount to any measure of lost profits, lost margins, or other actual economic loss. He does not address whether the 75%-of-gross-revenue multiplier is calibrated to VTS's expected profitability on the SLG account. He does not analyze whether damages were difficult to ascertain at the time of contracting. In short, Dr. Trask accepts the enforceability of the clause as a given and mechanically computes the result, abdicating his responsibility as an economic expert to evaluate the reasonableness of the formula.

C. Trask's Methodology — Lost Profits

47. In addition to his $67.23 million liquidated damages claim, Dr. Trask calculates lost profits of $18.7 million. He derives this figure by applying an assumed 12 percent average operating margin to the remaining committed volume under the TSA over the balance of the contract term — approximately $86.4 million in ACV over the final two years (with the partial year included in the liquidated damages calculation and thus double-counted in his analysis).

48. Dr. Trask's 12 percent margin assumption is based on VTS's company-wide operating margins for fiscal years 2019 through 2021. Critically, this margin is not derived from the SLG-specific account profitability; it reflects VTS's blended performance across all of its customer accounts, freight lanes, and service offerings. As I demonstrate in Section V.C.3 of this Report, the SLG-specific operating margin was substantially lower than VTS's company-wide average — approximately 7 to 8 percent — due to the competitive rate levels at which the TSA was negotiated, the higher fixed costs associated with the dedicated fleet model, and the incomplete pass-through of cost inflation under the TSA's rate adjustment mechanism.

49. Dr. Trask's lost-profits analysis suffers from additional deficiencies that render it unreliable. He does not adjust for the deteriorating freight market conditions that prevailed during 2022 through 2024 — the period corresponding to the remaining TSA term. He does not account for the fact that VTS's own performance failures would have reduced volumes even absent termination, as VTS's declining service quality would likely have triggered additional remedial measures, volume reductions, or further disputes under the TSA. And he makes no adjustment for VTS's complete failure to mitigate damages following the termination.

D. Trask's Methodology — Consequential/Incidental Damages

50. Beyond liquidated damages and lost profits, Dr. Trask claims $9,470,000 in three additional categories of damages:

(a) Stranded Assets ($5,200,000). Dr. Trask includes $5.2 million representing depreciation on tractors and trailers acquired or dedicated for the SLG contract, as well as lease termination costs for equipment leases entered into in connection with VTS's SLG fleet commitment. This category compensates for the diminished value of assets that VTS claims were rendered unproductive by the termination.

(b) Workforce Reduction Costs ($2,870,000). Dr. Trask includes $2.87 million in severance payments and unemployment insurance costs associated with the termination of approximately 180 drivers and support staff whom VTS alleges were dedicated to the SLG contract and were laid off following the termination.

(c) Mitigation Costs ($1,400,000). Dr. Trask includes $1.4 million in costs allegedly incurred by VTS in seeking replacement freight to replace the lost SLG volume. These costs purportedly include sales and marketing expenses, broker fees, and administrative costs associated with mitigation efforts.

51. Notably, Dr. Trask's report does not address or even acknowledge the existence of Section 15.1 of the TSA — the mutual waiver of consequential damages. This is a remarkable omission. Each of the three categories listed above — stranded assets, workforce reduction costs, and mitigation costs — constitutes consequential or incidental damages that are expressly barred by the TSA's mutual waiver provision. A properly conducted damages analysis would have, at minimum, acknowledged the existence of Section 15.1 and analyzed whether these damages categories fall within the scope of the waiver. Dr. Trask's failure to do so represents a fundamental deficiency in his analysis.

E. Fundamental Deficiencies in the Trask Report

52. In summary, the Trask Report suffers from six categories of fundamental deficiencies, each of which is addressed in detail in Sections IV through VIII of this Report:

(i) No Independent Enforceability Analysis of Liquidated Damages. Dr. Trask mechanically applies the Section 14.2 formula without any economic assessment of whether the resulting amount bears a reasonable relationship to actual or anticipated harm. As I demonstrate in Section VII, the liquidated damages figure exceeds actual damages by a factor of approximately 8.2 times.

(ii) Inflated and Unsupported Margin Assumptions. Dr. Trask uses a 12 percent operating margin based on VTS's company-wide financials, rather than the 7 to 8 percent margin that is specific to the SLG account. This error alone inflates his lost-profits figure by approximately 50 to 70 percent.

(iii) Failure to Account for Vantor's Own Antecedent Breaches. Dr. Trask's analysis ignores VTS's voluntary fleet redeployment and SLO failures, which constituted material breaches of the TSA and would reduce or eliminate VTS's right to recover under a "first-to-breach" analysis.

(iv) Complete Absence of Mitigation Analysis. Dr. Trask makes no adjustment whatsoever for Vantor's duty to mitigate or its failure to take reasonable steps to replace the lost SLG freight volume, despite favorable market conditions in the post-termination period.

(v) Inclusion of Barred Consequential Damages. Dr. Trask includes $9.47 million in consequential and incidental damages that are expressly barred by the mutual waiver in Section 15.1 of the TSA.

(vi) Duplicative Recovery. Dr. Trask claims both liquidated damages ($67.23 million) and lost profits ($18.7 million) for what is economically a single category of harm — the lost value of the remaining contract term. This duplicative approach inflates his damages figure by at least $18.7 million.

IV. OPINION 1: IF THE TERMINATION WAS VALID FOR CAUSE, VANTOR'S DAMAGES ARE ZERO

A. Economic Analysis of VTS's Performance Failures

53. My first and primary opinion is that if Stonefield validly terminated the TSA for Cause under Section 13.1(a), Vantor is entitled to zero dollars in damages, because a valid termination for Cause means that no breach by Stonefield occurred and therefore no damages are owed. This is not a legal opinion — the determination of whether the termination was legally valid for Cause is a question for the Court. Rather, my opinion is grounded in the economic analysis of VTS's performance data, which establishes that VTS's breaches were real, severe, and contemporaneously documented.

54. I have conducted an independent analysis of VTS's performance data for the fourth quarter of 2021, drawing upon VTS's own internal Q4 2021 Performance Report, the Stonefield Carrier Performance Portal data, and the data cited in the January 18, 2022 Cure Notice. My analysis confirms that VTS failed to meet all five SLO thresholds simultaneously during this period, with shortfalls that were not marginal or de minimis but severe and systematic:

55. Several features of these failures are noteworthy from an economic standpoint. First, VTS breached all five SLOs simultaneously. This was not a matter of a single metric slipping marginally below threshold while the carrier otherwise performed satisfactorily; rather, VTS's performance deteriorated across every dimension measured by the TSA. Second, the magnitude of each shortfall was substantial. The on-time pickup shortfall of 16.8 percentage points and the tender acceptance shortfall of 18.6 percentage points are particularly striking, as they reflect a carrier that was failing to show up for a material proportion of the freight it was contractually obligated to handle. Third, the equipment availability shortfall — approximately 92 tractors below the minimum required level — represented a 27 percent reduction in the fleet capacity that VTS was contractually required to maintain for SLG-dedicated service.

56. From an economic perspective, these failures were not consistent with the kind of episodic, short-term performance dip that might result from temporary market disruptions or weather events. Instead, they reflected a structural breakdown in VTS's commitment to the SLG contract — a conclusion supported by the direct evidence of voluntary fleet redeployment discussed in the following subsection.

57. The cargo claims data further corroborate the breadth and severity of VTS's performance breakdown. During November and December 2021 alone, VTS incurred 16 cargo claims totaling $387,400, resulting in a claims ratio of 1.07 percent — more than double the 0.5 percent SLO threshold. A cargo claims ratio at this level indicates not only elevated rates of cargo damage and loss, but also a deterioration in the operational discipline and quality controls necessary to maintain reliable transportation service. In my experience, elevated cargo claims ratios are typically correlated with driver fatigue, deferred equipment maintenance, rushed loading and unloading procedures, and inadequate operational oversight — all of which are consistent with a carrier that has stretched its resources too thin by diverting fleet assets to other accounts.

B. VTS's Voluntary Fleet Redeployment

58. The evidence establishes that VTS's performance failures were caused not by external market conditions, but by VTS's deliberate decision to redeploy at least 85 tractors from SLG-dedicated lanes to serve the Northwind Distribution Co. account. The key piece of evidence on this point is the November 12, 2021 internal email from Sandra Milescu (VTS's Chief Operating Officer) to Nikolai Vantorovich (Vantor's CEO and founder), produced during discovery as document VHC-008417.

59. In that email, Ms. Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." The redacted reference was subsequently identified, through Vantor's supplemental document production, as a reference to the Northwind Distribution Co. account. Additional documents in the supplemental production confirmed that the fleet redeployment from SLG-dedicated lanes to Northwind Distribution Co. lanes had commenced in October 2021, approximately one month before the date of the Milescu email.

60. This evidence is profoundly significant for several reasons. First, it establishes that VTS made a conscious, affirmative decision to reduce the fleet capacity available for SLG-dedicated service. The 85 tractors redeployed to Northwind represent approximately 21.3 percent of VTS's 400-tractor commitment to Stonefield and account for a substantial portion of the 92-tractor equipment availability shortfall observed in Q4 2021. Second, the Milescu email's reference to the expectation that "SLG won't notice until January" demonstrates that VTS understood the redeployment would violate its contractual obligations and deliberately chose to conceal it from Stonefield. Third, the timing of the redeployment — commencing in October 2021 — places the voluntary fleet diversion before the onset of the SLO failures that Stonefield subsequently cited in its Cure Notice, establishing VTS's redeployment as the proximate cause of the performance breakdown.

61. The causal connection between the fleet redeployment and VTS's SLO failures is apparent from the data. Pulling 85 tractors from SLG-dedicated lanes immediately reduced VTS's available capacity from 400 tractors to approximately 315, well below the 340-tractor minimum required under the equipment availability SLO. The reduced fleet capacity cascaded into failures across the other SLOs: with fewer tractors available, VTS was unable to accept tenders at the required rate (71.4 percent versus 90 percent), was unable to dispatch pickups and deliveries on time (78.2 percent on-time pickup and 81.6 percent on-time delivery versus the 95 percent and 93 percent thresholds, respectively), and experienced elevated cargo claims rates as remaining operations were stretched beyond sustainable limits.

62. Ms. Milescu confirmed the 85-tractor reassignment during her deposition on August 4, 2023. She testified that the redeployment was driven by what she characterized as "commercial necessity" and claimed it was intended to be "temporary." However, she was unable to explain why VTS failed to notify Stonefield of the redeployment, as required by the TSA's substitute equipment and notification provisions (Section 7.4). She was also unable to identify a specific date on which VTS planned to return the tractors to SLG-dedicated service or to provide any evidence that the redeployment was, in fact, temporary. Mr. Pruitt, in his deposition on July 10, 2023, acknowledged that VTS "struggled" to maintain committed fleet capacity in Q4 2021, but did not disclose the voluntary nature of the fleet reduction.

63. Vantor's suggestion that VTS's SLO failures were caused by the nationwide driver shortage or by Stonefield's alleged failure to tender minimum committed volumes is contradicted by the direct evidence of voluntary fleet redeployment. While the trucking industry did experience driver shortages during this period, the evidence shows that VTS had sufficient drivers to operate its fleet of 650 tractors — the problem was not a lack of drivers, but rather VTS's decision to deploy 85 of those tractors, along with their associated drivers, to the Northwind account rather than the SLG account. Similarly, Vantor's allegation that Stonefield failed to tender minimum committed volumes is addressed and refuted in Sections VIII.C and VIII.D of this Report.

C. VTS's Failure to Cure

64. The evidence further establishes that VTS failed to cure its material breaches within the 30-day cure period triggered by Stonefield's January 18, 2022 Cure Notice. Vantor's February 14, 2022 response to the Cure Notice acknowledged "operational challenges" but did not demonstrate that VTS had actually remediated any of the identified SLO deficiencies. The response attributed VTS's failures to external factors (driver shortage, Stonefield's alleged volume shortfalls, Stonefield's alleged volume diversion to spot carriers) rather than acknowledging the true cause — VTS's voluntary fleet redeployment. And critically, the response did not include any specific evidence or data showing that VTS had returned the redeployed tractors to SLG-dedicated lanes or had otherwise achieved compliance with the SLO thresholds.

65. Raymond Hess testified at his deposition on July 27, 2023 that the cure notice performance metrics were derived from VTS's own data as reported through the Carrier Performance Portal, and that VTS did not dispute the accuracy of the metrics in its February 14 response. Rather, VTS's response challenged only the characterization of the metrics as material breaches, not the metrics themselves.

66. Moreover, post-cure-period performance data from Stonefield's systems for early March 2022 — the period immediately following the expiration of the 30-day cure period on February 17, 2022 — shows continued failures across the SLO categories, indicating that VTS had not achieved cure by the time Stonefield issued its termination letter on March 4, 2022. While I have not been asked to render a legal opinion on whether VTS's cure efforts were legally sufficient, my economic analysis of the performance data supports the conclusion that VTS's SLO breaches remained unremediated as of the cure period's expiration.

D. Conclusion — Zero Damages

67. If the Court determines that Stonefield validly terminated the TSA for Cause under Section 13.1(a), then no breach by Stonefield occurred. In the absence of a breach by Stonefield, there is no economic basis for any award of damages to Vantor. Under this scenario, Vantor's entire $95.4 million claim fails as a matter of economic causation — the termination was a lawful exercise of Stonefield's contractual rights, not a breach giving rise to liability.

68. The economic evidence overwhelmingly supports the conclusion that VTS's SLO failures were real, severe, and caused by VTS's own voluntary conduct rather than by external factors beyond its control. Accordingly, it is my opinion, held to a reasonable degree of economic certainty, that if the termination was valid for Cause, Vantor is entitled to zero dollars in damages.

V. OPINION 2: ALTERNATIVE LOST-PROFITS ANALYSIS — MAXIMUM DAMAGES OF $8.2 MILLION

A. Framework for Alternative Analysis

69. My second opinion addresses, in the alternative, the maximum damages to which Vantor could be entitled if the Court determines that Stonefield's termination of the TSA was not valid for Cause — i.e., that the termination constituted a wrongful breach by Stonefield. I wish to emphasize that I do not accept this premise. As set forth in Section IV, the economic evidence strongly supports the conclusion that VTS's SLO breaches were real and uncured, and that Stonefield's termination was therefore valid for Cause. However, consistent with my engagement, I have conducted an alternative damages analysis assuming arguendo that the termination was wrongful, in order to demonstrate that even under this unfavorable assumption, Vantor's recoverable damages are dramatically lower than the $95.4 million claimed in the Trask Report.

70. Under New York law, the proper measure of damages for breach of a contract to provide services over a defined term is the non-breaching party's expectation interest — that is, the amount necessary to put the non-breaching party in the position it would have occupied had the contract been performed as agreed. In the context of a wrongful termination of a multi-year transportation services agreement, this expectation interest is most appropriately measured as the non-breaching party's lost profits on the remaining term of the contract, calculated as the contract revenue the non-breaching party would have earned, net of the costs it would have incurred to perform, and further reduced by amounts the non-breaching party did or could have earned through reasonable mitigation efforts.

71. This is the standard lost-profits methodology that is widely accepted in commercial damages analysis. It is not, as Dr. Trask's Report implicitly suggests, appropriate to claim both liquidated damages (which are themselves intended to substitute for actual damages) and actual lost profits covering the same contractual benefit. As I discuss in the following subsection, such duplicative recovery is neither economically sound nor legally permissible.

B. Elimination of Duplicative Damages

72. As an initial matter, I note that Dr. Trask's damages calculation includes both $67,230,000 in liquidated damages and $18,700,000 in lost profits, for a combined total of $85,930,000 attributable to the lost value of the remaining contract term. These two categories of damages compensate for the same fundamental economic harm: the revenue and profits that VTS expected to earn over the remaining term of the TSA.

73. This is duplicative recovery. Under New York law, a plaintiff cannot recover both liquidated damages and actual lost profits where both categories compensate for the loss of the same contractual benefit. A liquidated damages clause, when enforceable, substitutes for actual damages; it is an agreed-upon estimate of the loss, intended to relieve the non-breaching party of the burden of proving actual damages. A plaintiff must elect between liquidated damages and actual damages — it cannot have both.

74. Dr. Trask's approach of stacking liquidated damages on top of lost profits is economically incoherent. The liquidated damages formula in Section 14.2 is designed to compensate VTS for the value it loses from the early termination of the contract — the same value that a lost-profits analysis is designed to measure. To award both would compensate Vantor twice for the same loss.

75. For purposes of my alternative analysis, I reject the liquidated damages claim entirely — both because it is duplicative of the lost-profits claim and because, as I demonstrate in Section VII, the formula produces economically disproportionate results that render it unenforceable as a penalty. Instead, I calculate actual lost profits as the proper measure of Vantor's damages.

C. Corrected Lost-Profits Calculation

1. Revenue Base.

76. The starting point for a lost-profits analysis is the identification of the revenue base — the contract revenue that VTS would have earned over the remaining term of the TSA, absent the termination. The remaining term consisted of approximately two years and twenty-seven days (March 4, 2022 through March 31, 2024).

77. Using the ACV of $43.2 million per contract year, the gross remaining-term revenue can be estimated as follows:

• Two full contract years: 2 × $43,200,000 = $86,400,000

• Partial year (27 days): $43,200,000 × (27/365) ≈ $3,195,616

• Total gross remaining-term revenue: approximately $89,600,000 (rounded)

78. However, the $43.2 million ACV figure is an aspirational contractual minimum, not a realistic projection of actual revenue. Two factors necessitate a downward adjustment to the revenue base. First, Vantor's own financial performance in fiscal year 2022 — in which its consolidated revenue declined by 19.5 percent — suggests that VTS would not have earned the full ACV on the SLG account even if the contract had remained in effect. VTS's revenue decline was driven by the same market forces that were depressing freight volumes and rates industry-wide. Second, the national freight market underwent a significant softening beginning in mid-2022 and extending through 2023, as discussed in the following subsection. This market deterioration would have reduced the actual volume of freight available for VTS to carry under the TSA.

2. Market Adjustment.

79. Dr. Trask's analysis assumes that VTS would have earned the full ACV in each of the remaining contract years, with stable revenue and margins extending through March 2024. This assumption ignores the reality of the freight market conditions that actually prevailed during the relevant period.

80. National freight market data from Tarrant Software and the Dunmore Systems shows that the truckload freight market entered a significant downturn in mid-2022 that continued through 2023 and into early 2024. Specifically:

• Truckload contract rates declined by approximately 15 to 20 percent from mid-2022 through the end of 2023.

• Truckload spot rates — which serve as a barometer of freight demand and capacity dynamics — declined by approximately 30 to 35 percent from their peak in Q1 2022 to their trough in Q4 2023.

• Freight volumes, as measured by the Cass Freight Shipments Index, declined by approximately 7 percent year-over-year in 2023, following an approximately 3 percent decline in the second half of 2022.

81. Stonefield's own financial performance reflected these market conditions. Stonefield's revenue declined from approximately $1.42 billion in fiscal year 2021 to approximately $1.28 billion in fiscal year 2022, a decline of approximately 9.9 percent. Vantor's own revenue declined even more sharply, from approximately $385 million in fiscal year 2021 to approximately $310 million in fiscal year 2022, a decline of approximately 19.5 percent.

82. These data points make clear that the freight market during the remaining term of the TSA was materially weaker than the market conditions prevailing during the period on which Dr. Trask bases his revenue and margin assumptions. Even in the absence of the termination, VTS would have experienced reduced freight volumes, downward rate pressure, and compressed margins during the March 2022 through March 2024 period.

83. To account for these market conditions, I have applied a 15 percent reduction to the gross remaining-term revenue base, yielding a market-adjusted revenue figure of approximately $76,160,000. This adjustment is conservative; it is at the low end of the 15 to 20 percent range of contract rate declines observed during the relevant period, and it does not incorporate the more dramatic 30 to 35 percent decline in spot rates.

3. Margin Correction.

84. Dr. Trask applies a uniform 12 percent operating margin to the remaining-term revenue to calculate lost profits. This margin is based on VTS's company-wide operating margins for fiscal years 2019 through 2021. As an initial matter, I note that the use of a company-wide margin to estimate profitability on a specific account is methodologically unsound. Different customer accounts yield different margins depending on the negotiated rate levels, the geographic footprint of the lanes served, the fleet utilization efficiency, and the cost structure associated with the particular service model (dedicated versus on-demand, asset-based versus asset-light).

85. My analysis of VTS's internal financial records — including account-level profitability data, lane-specific rate and cost data, and fleet deployment records — reveals that the SLG-specific operating margin was substantially lower than VTS's company-wide average. Specifically, I estimate the SLG account operating margin at approximately 7 to 8 percent in fiscal year 2021, compared to the 12 percent company-wide average used by Dr. Trask. Three factors contributed to this margin differential:

(a) Competitive Rate Levels. The per-mile rates in Schedule B of the TSA were negotiated at competitive levels that reflected

EXPERT REBUTTAL REPORT OF DR. EVELYN ROSSER
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
VANTOR HOLDINGS CORP.,
Plaintiff,
v.
STONEFIELD LOGISTICS GROUP INC.,
Defendant.
Case No. 22-cv-07841
Before the Honorable Margaret T. Calloway, United States District Judge
Submitted on Behalf of Defendant Stonefield Logistics Group Inc.
August 25, 2023
Prepared by:
Dr. Evelyn Rosser Managing Director Kensington Analytics Group LLC 1700 Market Street, Suite 2800 Philadelphia, Pennsylvania 19103 Telephone: (215) 555-7200
Email: erosser@kensingtonanalytics.com
Assisted by:
Michael Chung Senior Analyst Kensington Analytics Group LLC 1700 Market Street, Suite 2800 Philadelphia, Pennsylvania 19103
I. INTRODUCTION AND PURPOSE OF REPORT
A. Engagement and Scope
1. I, Dr. Evelyn Rosser, have been retained by Calderwood & Harkness LLP, counsel for Defendant Stonefield Logistics Group Inc. ("Stonefield" or "SLG"), to serve as an expert witness in the above-captioned matter. My retention was effected pursuant to an engagement letter dated October 28, 2022, executed by Samuel Eklund, Responsible Partner at Calderwood & Harkness LLP. I have been asked to analyze and rebut the damages opinions set forth in the expert report of Dr. Philip Trask of Trask Greystone & Associates, dated May 15, 2023 (the "Trask Report"), which was submitted on behalf of Plaintiff Vantor Holdings Corp. ("Vantor").
2. Specifically, the scope of my engagement encompasses the following four areas of inquiry:
(i) Evaluation of the Trask Report. I have been asked to evaluate the methodology, assumptions, and conclusions contained in the Trask Report, and to identify errors, omissions, and deficiencies in Dr. Trask's analysis that materially affect the reliability of his damages opinions.
(ii) Independent Damages Analysis. I have been asked to provide my own independent analysis of damages, if any, that Vantor and its operating subsidiary Vantor Transport Services LLC ("VTS") could claim under the Transportation Services Agreement dated March 15, 2019 (the "TSA," Contract Reference No. SLG-VTS-2019-0315), considering appropriate economic adjustments, offsets, and proper damages methodology.
(iii) Liquidated Damages Assessment. I have been asked to assess the enforceability of the liquidated damages clause set forth in Section 14.2 of the TSA from an economic perspective, evaluating whether the formula produces results that constitute a reasonable pre-estimate of anticipated harm or, alternatively, whether the clause operates as an unenforceable penalty under applicable law.
(iv) Mitigation Analysis. I have been asked to analyze Vantor's mitigation efforts and obligations in the period following the termination of the TSA, including an assessment of the freight market conditions that existed during the relevant period and the extent to which Vantor took — or failed to take — reasonable steps to mitigate its alleged damages.
3. In conducting my analysis, I have drawn upon my more than twenty years of experience in transportation economics, freight brokerage, managed transportation, and contract damages quantification. I have reviewed the TSA and its schedules and amendments, the Trask Report and its supporting materials, the parties' document productions, deposition transcripts, financial statements, industry data, and the other materials identified in Appendix B to this Report.
B. Summary of Opinions
4. Based on my analysis of the record evidence, the Trask Report, the applicable economic principles, and the relevant industry data, I have formed the following three principal opinions, each of which I hold to a reasonable degree of economic certainty:
Opinion 1: If Stonefield validly terminated the TSA for Cause under Section 13.1(a), Vantor is entitled to zero ($0) in damages, as no breach occurred giving rise to liability.
5. The documentary and testimonial evidence establishes that VTS simultaneously failed to meet all five Service Level Obligations ("SLOs") set forth in the TSA during the fourth quarter of 2021. These failures were severe, sustained, and pervasive across every performance dimension measured by the TSA. Moreover, the evidence demonstrates that VTS's performance failures were not the result of exogenous market conditions, but rather were directly caused by VTS's voluntary decision in October 2021 to redeploy at least 85 tractors from dedicated SLG lanes to serve the Northwind Distribution Co. account, without notice to or authorization from Stonefield. VTS failed to cure these material breaches within the 30-day cure period prescribed by Section 13.2 of the TSA. If Stonefield's termination of the TSA was valid for Cause, no breach by Stonefield occurred, and Vantor's entire damages claim of $95.4 million fails as a matter of economic causation.
Opinion 2: Under an alternative lost-profits analysis — assuming arguendo that the termination was wrongful — the maximum damages recoverable by Vantor are approximately $8.2 million, after properly accounting for (a) Vantor's own antecedent breaches, (b) Vantor's complete failure to mitigate damages, (c) market-based adjustments, and (d) the elimination of duplicative and barred damages categories.
6. Even if one assumes for purposes of analysis that Stonefield's termination of the TSA was wrongful — a premise I do not accept — the maximum damages to which Vantor could be entitled are dramatically lower than the $95.4 million claimed in the Trask Report. Dr. Trask's damages figure is inflated by his use of an unsupported 12% operating margin that does not reflect the SLG-specific account profitability, his failure to make any adjustment for the significant softening in the national freight market that occurred during the remaining contract term, his failure to apply any offset for VTS's own antecedent material breaches of the TSA, his complete disregard for Vantor's duty to mitigate damages, his inclusion of $9.47 million in consequential and incidental damages that are expressly barred by the TSA's mutual consequential damages waiver (Section 15.1), and his duplicative claiming of both liquidated damages and lost profits to compensate for the same underlying economic harm. When these errors and omissions are corrected, the maximum damages recoverable by Vantor under a properly constructed lost-profits analysis are approximately $8.2 million — a figure that itself represents a conservative upper-bound estimate from Stonefield's perspective.
Opinion 3: The liquidated damages formula in Section 14.2 of the TSA produces results grossly disproportionate to any measure of actual or reasonably anticipated harm, supporting a finding that the clause constitutes an unenforceable penalty under New York law.
7. The Section 14.2 liquidated damages formula — 75% of the Annual Committed Volume ("ACV") multiplied by the number of full and partial contract years remaining — produces a liquidated damages amount of $67,230,000 in this case. This amount exceeds the maximum actual damages I have calculated by a factor of approximately 8.2 times ($67.23 million divided by $8.2 million). Even using Dr. Trask's own inflated lost-profits figure of $18.7 million, the liquidated damages amount is approximately 3.6 times greater than the actual lost profits claimed by Vantor's own expert. The formula uses 75% of gross revenue as its base — a figure that bears no reasonable relationship to VTS's actual economic loss, given that VTS's operating margin on the SLG account was approximately 7 to 8 percent. The clause effectively compensates VTS at ten times its actual margin, ignores VTS's duty to mitigate, and fails to account for VTS's ability to redeploy its fleet and personnel to other revenue-generating activities. From an economic perspective, the clause functions as a penalty, not as a reasonable pre-estimate of anticipated harm, and is an outlier relative to early termination provisions in comparable freight transportation contracts.
C. Statement of Qualifications
8. I am the Managing Director of Kensington Analytics Group LLC, an economic consulting firm based in Philadelphia, Pennsylvania that specializes in transportation economics, logistics and supply chain economics, and commercial damages analysis. I hold a Ph.D. in Economics from the University of Pennsylvania, where my doctoral research focused on industrial organization and the economics of freight transportation markets. I also hold a Master of Arts in Economics from the University of Pennsylvania and a Bachelor of Arts in Economics, magna cum laude, from Georgetown University.
9. I have over twenty years of professional experience in transportation economics and contract damages analysis. My career has encompassed positions in academia, government, and the private sector. Prior to founding Kensington Analytics Group in 2012, I served as a Senior Economist at the Surface Transportation Board of the United States Department of Transportation, where I was responsible for economic analyses of freight rail competition, shipper-carrier disputes, and market dominance determinations. Before my government service, I held a faculty appointment as Assistant Professor of Economics at the Wharton School of the University of Pennsylvania, where I taught courses in industrial organization, transportation economics, and applied microeconometrics.
10. My areas of particular specialization include freight brokerage economics, managed transportation services, truckload and less-than-truckload pricing and capacity analysis, supply chain contract disputes, and the economic analysis of commercial damages in transportation-related litigation. I have published numerous articles and book chapters in peer-reviewed journals and edited volumes on topics including freight rate structures, shipper-carrier contracting practices, the economics of freight intermediation, and damages methodology in commercial disputes.
11. Over the course of my career, I have been retained as an expert in over forty commercial litigation matters involving transportation contracts, damages quantification, and economic loss analysis. I have provided both consulting and testifying expert services in matters involving freight brokerage agreements, dedicated transportation services agreements, managed transportation programs, intermodal service contracts, and related commercial disputes. I have been qualified as an expert and have offered testimony in the United States District Courts for the Southern District of New York, the Eastern District of Pennsylvania, the Northern District of Texas, the Northern District of Illinois, the Central District of California, and the District of New Jersey, as well as in state courts in New York, Pennsylvania, Texas, and Illinois. A complete list of my prior testimony in the past four years, as well as my curriculum vitae, list of publications, and prior expert retentions, is set forth in Appendix A to this Report.
12. My compensation for this engagement is $625 per hour. Michael Chung, a Senior Analyst at Kensington Analytics Group who has assisted me in preparing this Report, is compensated at $375 per hour. Neither my compensation nor Mr. Chung's compensation is contingent in any way upon the opinions expressed in this Report or upon the outcome of this litigation.
II. BACKGROUND AND KEY FACTS
A. The Parties
13. Stonefield Logistics Group Inc. Stonefield is a Delaware corporation headquartered at 4200 Commerce Parkway, Suite 800, Fort Worth, Texas 76102. Stonefield is a mid-market freight brokerage and managed transportation company that provides a broad range of transportation management services to shippers across the United States. Stonefield operates a carrier network of approximately 12,000 approved carriers and handles approximately 850,000 shipments annually across multiple modes, including full truckload ("TL"), less-than-truckload ("LTL"), intermodal, and last-mile delivery services.
14. For fiscal year 2021, Stonefield reported total revenue of approximately $1.42 billion. For fiscal year 2022, Stonefield's total revenue declined to approximately $1.28 billion, reflecting a year-over-year decline of approximately 9.9 percent. This decline was consistent with broader softening in the national freight market during that period, as I discuss in greater detail below. Stonefield's fiscal year 2022 earnings before interest, taxes, depreciation, and amortization ("EBITDA") were approximately $118 million. Stonefield employs approximately 2,800 people across its headquarters, regional offices, and operating facilities.
15. Stonefield has been majority-owned since October 2017 by Ridgeline Capital Partners, LP ("Ridgeline"), a middle-market private equity firm. Ridgeline acquired Stonefield through a leveraged buyout transaction at an enterprise value of approximately $680 million. Ridgeline holds approximately 72 percent of Stonefield's equity through Ridgeline Fund III, LP. The private equity ownership structure is relevant to this case insofar as it underscores that Stonefield is a sophisticated commercial enterprise with access to substantial financial and operational resources, including professional contract compliance and risk management functions.
16. Vantor Holdings Corp. Vantor is a New York corporation headquartered at 580 Eighth Avenue, 14th Floor, New York, New York 10018. Vantor is a holding company whose primary operating subsidiary is VTS (discussed below). Vantor was founded by Nikolai Vantorovich, who serves as the company's Chief Executive Officer and holds an approximately 58 percent ownership interest. For fiscal year 2021, Vantor reported consolidated revenue of approximately $385 million. For fiscal year 2022, Vantor's consolidated revenue declined to approximately $310 million, representing a year-over-year decrease of approximately 19.5 percent — approximately double the rate of decline experienced by Stonefield during the same period and nearly double the rate of decline experienced by the national truckload freight market. Vantor employs approximately 1,900 people.
17. Vantor Transport Services LLC. VTS is a New York limited liability company and the wholly owned operating subsidiary of Vantor. VTS was the signatory counterparty to the TSA at issue in this litigation, serving as the "Carrier-Provider" under the agreement. VTS operates both asset-based and asset-light trucking services, as well as warehousing and regional distribution services. At the time of the TSA's execution, VTS operated approximately 650 owned tractors and 2,100 trailers, with additional capacity sourced through independent owner-operators under contract. VTS's operations are concentrated in the Northeast, Mid-Atlantic, and Southeast freight corridors, which are among the most active and competitive freight lanes in the United States.
18. Ridgeline Capital Partners, LP. As noted above, Ridgeline is a middle-market private equity firm that has held a majority equity stake in Stonefield since its 2017 leveraged buyout. Ridgeline Fund III, LP holds approximately 72 percent of Stonefield's equity. Ridgeline's involvement is relevant to the economic analysis in this Report primarily in two respects: first, it confirms that Stonefield operated under institutional governance and professional management oversight during the period at issue; and second, Ridgeline's ownership structure and portfolio management practices inform the assessment of Stonefield's commercial decision-making regarding the TSA termination and rate adjustment considerations discussed in Section IX below.
B. The Transportation Services Agreement
19. The Transportation Services Agreement at the center of this dispute was executed on March 15, 2019, between Stonefield, in its capacity as "Shipper-Broker," and VTS, in its capacity as "Carrier-Provider" (the "TSA," Contract Reference No. SLG-VTS-2019-0315). The TSA was drafted by Ashford Meridian LLP on behalf of Stonefield. The agreement is governed by the laws of the State of New York, as specified in the choice-of-law provision at Section 16.4. A thorough understanding of the TSA's material terms is essential to evaluating the parties' respective obligations, the validity of the termination, and the calculation of damages.
20. Term. The TSA provided for an initial term of five years, commencing on April 1, 2019 and extending through March 31, 2024. The agreement included a provision for one automatic two-year renewal, extending the term through March 31, 2026, unless either party provided 180 days' prior written notice of non-renewal. As of the termination date of March 4, 2022, the TSA had been in effect for approximately two years and eleven months, with approximately two years and twenty-seven days remaining on the initial five-year term.
21. Scope of Services. Under the TSA, VTS committed to providing dedicated and on-demand truckload transportation services to Stonefield across the Northeast, Mid-Atlantic, and Southeast corridors. These services encompassed the transportation of freight tendered by Stonefield and its shipper customers, utilizing VTS's owned tractors and trailers as well as capacity sourced through VTS's owner-operator network. As part of its obligations, VTS committed to maintaining a minimum fleet capacity of 400 tractors and 1,200 trailers available for SLG-dedicated service at all times during the term. This minimum fleet commitment was a material element of the bargain, as Stonefield relied upon VTS's dedicated capacity to fulfill its own commitments to its shipper customers.
22. Annual Committed Volume. The TSA established an Annual Committed Volume ("ACV") of $43.2 million per contract year, representing the minimum annualized revenue that VTS was entitled to receive from Stonefield for freight tendered under the agreement. Over the full five-year initial term, the total minimum commitment equaled $216 million ($43.2 million multiplied by five years). The ACV served both as a floor for Stonefield's volume commitment and as the basis for the rate adjustment mechanism and the liquidated damages formula.
23. Rate Structure. Per-mile rates were established on a lane-by-lane basis in Schedule B to the TSA. The TSA designated specific freight lanes — origin-destination pairs — in which VTS would provide service, with rates set at levels that were competitive at the time of contracting. The agreement further provided, in Section 5.3, a Rate Adjustment Mechanism that called for annual rate adjustments each April 1 based on a blended index formula: 70 percent weighted to a diesel fuel index component and 30 percent weighted to the Consumer Price Index for All Urban Consumers ("CPI-U"). This mechanism was designed to adjust rates to reflect changes in VTS's two principal cost drivers — fuel and labor/general inflation — but, as I discuss below, the mechanism did not fully insulate VTS from cost pressures and in fact contributed to margin compression on the SLG account.
24. Service Level Obligations. The TSA established five Service Level Obligations ("SLOs") that VTS was required to meet on a continuous basis throughout the term. These SLOs measured VTS's operational performance across the dimensions most material to Stonefield's ability to serve its own customers:
(a) On-time pickup: VTS was required to achieve an on-time pickup rate of at least 95 percent, measured as the percentage of loads picked up within the contracted pickup window.
(b) On-time delivery: VTS was required to achieve an on-time delivery rate of at least 93 percent, measured as the percentage of loads delivered within the contracted delivery window.
(c) Cargo claims ratio: VTS was required to maintain a cargo claims ratio of no more than 0.5 percent of gross revenue, calculated as the aggregate value of filed cargo damage and loss claims as a percentage of total freight revenue under the TSA.
(d) Tender acceptance rate: VTS was required to accept at least 90 percent of all freight tenders submitted by Stonefield under the TSA.
(e) Equipment availability: VTS was required to maintain equipment availability at or above 85 percent of the committed fleet capacity of 400 tractors, meaning that at least 340 tractors were to be available for SLG-dedicated service at all times.
25. These SLOs were not aspirational targets; they were binding contractual obligations. The thresholds themselves were consistent with industry standards for dedicated truckload service agreements and reflected the minimum performance levels necessary to support a reliable, high-service freight network.
26. Liquidated Damages. Section 14.2 of the TSA established a liquidated damages formula applicable in the event that Stonefield terminated the agreement other than "for Cause." Under this provision, liquidated damages were calculated as 75 percent of the ACV multiplied by the number of full and partial contract years remaining on the term at the time of termination. As I discuss at length in Section VII of this Report, this formula produces results that are grossly disproportionate to any reasonable measure of actual or anticipated harm.
27. Termination for Cause. Section 13.1 of the TSA set forth the grounds upon which either party could terminate the agreement for Cause. These grounds included: (a) a material breach of the agreement that remained uncured for 30 calendar days after written notice specifying the breach with reasonable particularity (Section 13.2); (b) the insolvency or bankruptcy of the other party; (c) the failure of the other party to maintain required insurance coverage for more than 15 days; and (d) a material violation of applicable law, including regulations promulgated by the United States Department of Transportation ("DOT") and the Federal Motor Carrier Safety Administration ("FMCSA"). Stonefield terminated the TSA on March 4, 2022, invoking Section 13.1(a) — material breach uncured after the 30-day cure period.
28. Cure Notice Procedure. Section 13.2 required the terminating party to provide written notice specifying with reasonable particularity the alleged breach and the applicable cure period. The non-breaching party then had 30 calendar days from receipt of such notice to cure the identified breach or breaches.
29. Consequential Damages Waiver. Section 15.1 of the TSA contained a mutual waiver of consequential damages. Under this provision, neither party could recover consequential, special, incidental, or punitive damages arising from or related to any breach or termination of the agreement. As I discuss in Section VIII, Dr. Trask's report includes $9.47 million in damages categories that are properly characterized as consequential or incidental damages and are therefore barred by Section 15.1.
30. Force Majeure. Section 12.1 of the TSA contained a force majeure provision applicable to performance excused by qualifying events, including pandemics. As discussed in Section VIII.C, Stonefield properly invoked this provision during the COVID-19 pandemic period from April 2020 through September 2020.
C. Termination Chronology
31. The following chronology sets forth the key events leading to Stonefield's termination of the TSA, drawing upon the contemporaneous documents and deposition testimony in the record:
32. Q4 2021: VTS Performance Failures. Beginning in the fourth quarter of 2021, VTS's performance metrics fell below the SLO thresholds established by the TSA across all five categories simultaneously. Based on my independent analysis of VTS's Q4 2021 Performance Report and the data reported through Stonefield's Carrier Performance Portal, VTS's actual performance during this period was as follows:
(a) On-time pickup: 78.2 percent, versus the 95 percent SLO threshold — a shortfall of 16.8 percentage points.
(b) On-time delivery: 81.6 percent, versus the 93 percent SLO threshold — a shortfall of 11.4 percentage points.
(c) Tender acceptance rate: 71.4 percent, versus the 90 percent SLO threshold — a shortfall of 18.6 percentage points.
(d) Equipment availability: Approximately 62 percent of committed fleet capacity, equating to approximately 248 tractors available for SLG-dedicated service versus the required 340 tractors (85 percent of the 400-tractor commitment) — a shortfall of approximately 92 tractors.
(e) Cargo claims ratio: 1.07 percent of gross revenue, versus the 0.5 percent SLO threshold. During November and December 2021 alone, VTS incurred 16 cargo claims totaling $387,400 — more than double the permitted threshold.
33. The simultaneous failure across all five SLO categories was unprecedented during the life of the TSA. As I discuss in Section IV below, the nature and magnitude of these failures reflected a fundamental breakdown in VTS's commitment to the SLG contract, driven not by exogenous market forces but by VTS's deliberate decision to redeploy fleet assets away from SLG-dedicated service.
34. November 12, 2021: Internal VTS Email Regarding Fleet Redeployment. On November 12, 2021, Sandra Milescu, VTS's Chief Operating Officer, sent an internal email to Nikolai Vantorovich, Vantor's CEO and founder. This email, produced during discovery as document VHC-008417, stated in relevant part: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." The redacted reference was subsequently identified, through Vantor's supplemental document production, as a reference to the Northwind Distribution Co. account. Additional documents in the supplemental production confirmed that the fleet redeployment from SLG-dedicated lanes to Northwind Distribution Co. lanes had commenced in October 2021, approximately one month before the date of the Milescu email. This evidence is critical because it establishes that VTS's SLO failures were not the product of external market conditions, as Vantor has alleged, but rather were the direct consequence of VTS's own voluntary decision to divert contractually committed fleet resources to another customer.
35. January 18, 2022: Stonefield Cure Notice. On January 18, 2022, Raymond Hess, Stonefield's Director of Contract Compliance, issued a formal written Cure Notice to Sandra Milescu at VTS, in accordance with Section 13.2 of the TSA. The Cure Notice identified with reasonable particularity VTS's failures across all five SLO categories and cited VTS's chronic failure to provide substitute equipment as required by Section 7.4 of the TSA. The Cure Notice triggered the 30-day cure period set forth in Section 13.2.
36. February 14, 2022: Vantor Response. On February 14, 2022, Derek Pruitt, Vantor's Vice President of Business Development, submitted VTS's written response to the Cure Notice. In this response, Vantor acknowledged "operational challenges" but attributed VTS's performance deficiencies to three purported causes: (i) the nationwide driver shortage affecting the trucking industry; (ii) Stonefield's alleged failure to tender minimum committed volumes under the ACV; and (iii) Stonefield's alleged instructions to divert volume from VTS to spot market carriers. Vantor also disputed certain of the cargo claims data cited in the Cure Notice and asserted that VTS had achieved "substantial cure" of the identified deficiencies.
37. Notably, Vantor's February 14 response did not acknowledge, address, or disclose the voluntary fleet redeployment to Northwind Distribution Co. that was the actual cause of VTS's SLO failures. Nor did the response provide any specific evidence or data demonstrating that VTS had actually returned the redeployed tractors to SLG-dedicated lanes or otherwise cured the identified breaches. As I discuss in Section IV.C, the available evidence indicates that VTS did not, in fact, cure its material breaches during the cure period.
38. February 17, 2022: Cure Period Expiration. The 30-day cure period prescribed by Section 13.2 of the TSA expired on February 17, 2022 — 30 calendar days after VTS's receipt of the January 18 Cure Notice.
39. March 4, 2022: Stonefield Termination Letter. On March 4, 2022, Tobias Wren, Stonefield's General Counsel, issued a formal termination letter to Vantor and VTS, stating that VTS had failed to cure the material breaches identified in the January 18 Cure Notice within the 30-day cure period. The letter stated that the TSA was terminated immediately pursuant to Section 13.1(a).
40. At the time of termination, the remaining term of the TSA was approximately two years and twenty-seven days — from March 4, 2022 through March 31, 2024.
D. Materials Reviewed
41. In forming the opinions set forth in this Report, I have reviewed and considered an extensive body of documentary evidence, deposition testimony, financial data, industry data, and other materials. The complete list of materials reviewed is set forth in Appendix B. Below, I identify the principal categories and items of materials reviewed:
(a) Contract Documents. The TSA and all schedules and amendments thereto (Contract Reference No. SLG-VTS-2019-0315), including Schedule B (lane-specific rates), Schedule C (lane designations and exclusivity provisions), and the Rate Adjustment Mechanism set forth in Section 5.3.
(b) Termination-Related Correspondence. The Cure Notice dated January 18, 2022, from Raymond Hess to Sandra Milescu; Vantor's response dated February 14, 2022, from Derek Pruitt; and the Termination Letter dated March 4, 2022, from Tobias Wren.
(c) Expert Report. The expert report of Dr. Philip Trask, Trask Greystone & Associates, dated May 15, 2023, including all exhibits, appendices, and supporting materials.
(d) Document Productions. Vantor's document productions (comprising 28,914 documents in the initial production and 4,218 documents in the supplemental production) and Stonefield's document productions (comprising 42,387 documents).
(e) Internal Performance Data. VTS's Q4 2021 Performance Report (an internal VTS document) and Stonefield's Carrier Performance Portal data for VTS.
(f) Financial Statements. VTS's financial statements for fiscal years 2019 through 2022 and Stonefield's financial statements for fiscal years 2019 through 2022.
(g) Deposition Transcripts. The deposition transcripts of Derek Pruitt (July 10, 2023), Janet Kirkwood (July 14, 2023), Raymond Hess (July 27, 2023), Sandra Milescu (August 4, 2023), and Nikolai Vantorovich (partial transcript, August 18, 2023).
(h) Rate Analysis. The Ashford Meridian LLP rate adjustment analysis memorandum dated February 2022, analyzing the projected impact of the April 2022 rate adjustment under Section 5.3 of the TSA.
(i) Industry Data. Freight market indices, including spot and contract rate data from Tarrant Software and the Dunmore Systems; diesel fuel index data from the U.S. Energy Information Administration; CPI-U data from the U.S. Bureau of Labor Statistics; and driver shortage statistics from the American Trucking Associations.
(j) Fleet and Operational Records. Vantor's and VTS's fleet management and deployment records, including tractor and trailer assignment logs, driver assignment records, and lane-by-lane utilization data.
(k) discovery Responses. Vantor's interrogatory responses and responses to Stonefield's requests for admission.
(l) Third-Party Subpoena Responses. Documents produced by Cascade Freight Systems Inc. and Briarwood Trucking Co. in response to subpoenas issued by Stonefield.
42. In addition to the foregoing, I have reviewed academic and professional literature on transportation economics, freight market dynamics, and damages quantification methodology, as detailed in Appendix B.
III. OVERVIEW OF THE TRASK REPORT AND ITS DAMAGES METHODOLOGY
A. Summary of the Trask Report's Conclusions
43. Dr. Trask's Report, submitted on behalf of Vantor, opines that Vantor's total damages from Stonefield's termination of the TSA are $95,400,000. Dr. Trask presents this figure as the sum of six separate damages categories, as follows:
44. As I discuss in detail in Sections IV through IX of this Report, Dr. Trask's $95.4 million damages figure is inflated, unreliable, and fundamentally flawed. His analysis is marred by a series of interrelated errors and omissions: he mechanically applies the liquidated damages formula without conducting any independent economic assessment of its enforceability; he uses inflated margin assumptions that do not reflect the SLG-specific account profitability; he fails to account for Vantor's own antecedent material breaches; he makes no adjustment whatsoever for Vantor's failure to mitigate damages; he includes $9.47 million in consequential damages that are expressly barred by the TSA's mutual waiver; and he claims both liquidated damages and lost profits, resulting in duplicative recovery for the same economic harm. Each of these deficiencies, standing alone, renders his damages opinion unreliable. Taken together, they result in a damages figure that is approximately 11.6 times greater than the maximum actual damages recoverable by Vantor.
B. Trask's Methodology — Liquidated Damages
45. The largest component of Dr. Trask's damages figure — $67,230,000, representing approximately 70.5 percent of his total — consists of liquidated damages calculated by mechanical application of the formula set forth in Section 14.2 of the TSA. Specifically, Dr. Trask calculates liquidated damages as follows:
• For the two full contract years remaining at termination: 75% × $43,200,000 ACV × 2 years = $64,800,000.
• For the 27-day partial contract year remaining: 75% × $43,200,000 × (27/365) = $2,396,712, which Dr. Trask rounds to $2,430,000.
• Total liquidated damages: $67,230,000 (combining the two full-year and partial-year calculations).
46. Dr. Trask assumes, without conducting any independent economic analysis, that the Section 14.2 liquidated damages clause is enforceable and represents a reasonable pre-estimate of Vantor's anticipated damages from early termination. His report contains no discussion whatsoever of whether the formula bears a reasonable relationship to Vantor's actual or anticipated economic harm. He does not compare the liquidated damages amount to any measure of lost profits, lost margins, or other actual economic loss. He does not address whether the 75%-of-gross-revenue multiplier is calibrated to VTS's expected profitability on the SLG account. He does not analyze whether damages were difficult to ascertain at the time of contracting. In short, Dr. Trask accepts the enforceability of the clause as a given and mechanically computes the result, abdicating his responsibility as an economic expert to evaluate the reasonableness of the formula.
C. Trask's Methodology — Lost Profits
47. In addition to his $67.23 million liquidated damages claim, Dr. Trask calculates lost profits of $18.7 million. He derives this figure by applying an assumed 12 percent average operating margin to the remaining committed volume under the TSA over the balance of the contract term — approximately $86.4 million in ACV over the final two years (with the partial year included in the liquidated damages calculation and thus double-counted in his analysis).
48. Dr. Trask's 12 percent margin assumption is based on VTS's company-wide operating margins for fiscal years 2019 through 2021. Critically, this margin is not derived from the SLG-specific account profitability; it reflects VTS's blended performance across all of its customer accounts, freight lanes, and service offerings. As I demonstrate in Section V.C.3 of this Report, the SLG-specific operating margin was substantially lower than VTS's company-wide average — approximately 7 to 8 percent — due to the competitive rate levels at which the TSA was negotiated, the higher fixed costs associated with the dedicated fleet model, and the incomplete pass-through of cost inflation under the TSA's rate adjustment mechanism.
49. Dr. Trask's lost-profits analysis suffers from additional deficiencies that render it unreliable. He does not adjust for the deteriorating freight market conditions that prevailed during 2022 through 2024 — the period corresponding to the remaining TSA term. He does not account for the fact that VTS's own performance failures would have reduced volumes even absent termination, as VTS's declining service quality would likely have triggered additional remedial measures, volume reductions, or further disputes under the TSA. And he makes no adjustment for VTS's complete failure to mitigate damages following the termination.
D. Trask's Methodology — Consequential/Incidental Damages
50. Beyond liquidated damages and lost profits, Dr. Trask claims $9,470,000 in three additional categories of damages:
(a) Stranded Assets ($5,200,000). Dr. Trask includes $5.2 million representing depreciation on tractors and trailers acquired or dedicated for the SLG contract, as well as lease termination costs for equipment leases entered into in connection with VTS's SLG fleet commitment. This category compensates for the diminished value of assets that VTS claims were rendered unproductive by the termination.
(b) Workforce Reduction Costs ($2,870,000). Dr. Trask includes $2.87 million in severance payments and unemployment insurance costs associated with the termination of approximately 180 drivers and support staff whom VTS alleges were dedicated to the SLG contract and were laid off following the termination.
(c) Mitigation Costs ($1,400,000). Dr. Trask includes $1.4 million in costs allegedly incurred by VTS in seeking replacement freight to replace the lost SLG volume. These costs purportedly include sales and marketing expenses, broker fees, and administrative costs associated with mitigation efforts.
51. Notably, Dr. Trask's report does not address or even acknowledge the existence of Section 15.1 of the TSA — the mutual waiver of consequential damages. This is a remarkable omission. Each of the three categories listed above — stranded assets, workforce reduction costs, and mitigation costs — constitutes consequential or incidental damages that are expressly barred by the TSA's mutual waiver provision. A properly conducted damages analysis would have, at minimum, acknowledged the existence of Section 15.1 and analyzed whether these damages categories fall within the scope of the waiver. Dr. Trask's failure to do so represents a fundamental deficiency in his analysis.
E. Fundamental Deficiencies in the Trask Report
52. In summary, the Trask Report suffers from six categories of fundamental deficiencies, each of which is addressed in detail in Sections IV through VIII of this Report:
(i) No Independent Enforceability Analysis of Liquidated Damages. Dr. Trask mechanically applies the Section 14.2 formula without any economic assessment of whether the resulting amount bears a reasonable relationship to actual or anticipated harm. As I demonstrate in Section VII, the liquidated damages figure exceeds actual damages by a factor of approximately 8.2 times.
(ii) Inflated and Unsupported Margin Assumptions. Dr. Trask uses a 12 percent operating margin based on VTS's company-wide financials, rather than the 7 to 8 percent margin that is specific to the SLG account. This error alone inflates his lost-profits figure by approximately 50 to 70 percent.
(iii) Failure to Account for Vantor's Own Antecedent Breaches. Dr. Trask's analysis ignores VTS's voluntary fleet redeployment and SLO failures, which constituted material breaches of the TSA and would reduce or eliminate VTS's right to recover under a "first-to-breach" analysis.
(iv) Complete Absence of Mitigation Analysis. Dr. Trask makes no adjustment whatsoever for Vantor's duty to mitigate or its failure to take reasonable steps to replace the lost SLG freight volume, despite favorable market conditions in the post-termination period.
(v) Inclusion of Barred Consequential Damages. Dr. Trask includes $9.47 million in consequential and incidental damages that are expressly barred by the mutual waiver in Section 15.1 of the TSA.
(vi) Duplicative Recovery. Dr. Trask claims both liquidated damages ($67.23 million) and lost profits ($18.7 million) for what is economically a single category of harm — the lost value of the remaining contract term. This duplicative approach inflates his damages figure by at least $18.7 million.
IV. OPINION 1: IF THE TERMINATION WAS VALID FOR CAUSE, VANTOR'S DAMAGES ARE ZERO
A. Economic Analysis of VTS's Performance Failures
53. My first and primary opinion is that if Stonefield validly terminated the TSA for Cause under Section 13.1(a), Vantor is entitled to zero dollars in damages, because a valid termination for Cause means that no breach by Stonefield occurred and therefore no damages are owed. This is not a legal opinion — the determination of whether the termination was legally valid for Cause is a question for the Court. Rather, my opinion is grounded in the economic analysis of VTS's performance data, which establishes that VTS's breaches were real, severe, and contemporaneously documented.
54. I have conducted an independent analysis of VTS's performance data for the fourth quarter of 2021, drawing upon VTS's own internal Q4 2021 Performance Report, the Stonefield Carrier Performance Portal data, and the data cited in the January 18, 2022 Cure Notice. My analysis confirms that VTS failed to meet all five SLO thresholds simultaneously during this period, with shortfalls that were not marginal or de minimis but severe and systematic:
55. Several features of these failures are noteworthy from an economic standpoint. First, VTS breached all five SLOs simultaneously. This was not a matter of a single metric slipping marginally below threshold while the carrier otherwise performed satisfactorily; rather, VTS's performance deteriorated across every dimension measured by the TSA. Second, the magnitude of each shortfall was substantial. The on-time pickup shortfall of 16.8 percentage points and the tender acceptance shortfall of 18.6 percentage points are particularly striking, as they reflect a carrier that was failing to show up for a material proportion of the freight it was contractually obligated to handle. Third, the equipment availability shortfall — approximately 92 tractors below the minimum required level — represented a 27 percent reduction in the fleet capacity that VTS was contractually required to maintain for SLG-dedicated service.
56. From an economic perspective, these failures were not consistent with the kind of episodic, short-term performance dip that might result from temporary market disruptions or weather events. Instead, they reflected a structural breakdown in VTS's commitment to the SLG contract — a conclusion supported by the direct evidence of voluntary fleet redeployment discussed in the following subsection.
57. The cargo claims data further corroborate the breadth and severity of VTS's performance breakdown. During November and December 2021 alone, VTS incurred 16 cargo claims totaling $387,400, resulting in a claims ratio of 1.07 percent — more than double the 0.5 percent SLO threshold. A cargo claims ratio at this level indicates not only elevated rates of cargo damage and loss, but also a deterioration in the operational discipline and quality controls necessary to maintain reliable transportation service. In my experience, elevated cargo claims ratios are typically correlated with driver fatigue, deferred equipment maintenance, rushed loading and unloading procedures, and inadequate operational oversight — all of which are consistent with a carrier that has stretched its resources too thin by diverting fleet assets to other accounts.
B. VTS's Voluntary Fleet Redeployment
58. The evidence establishes that VTS's performance failures were caused not by external market conditions, but by VTS's deliberate decision to redeploy at least 85 tractors from SLG-dedicated lanes to serve the Northwind Distribution Co. account. The key piece of evidence on this point is the November 12, 2021 internal email from Sandra Milescu (VTS's Chief Operating Officer) to Nikolai Vantorovich (Vantor's CEO and founder), produced during discovery as document VHC-008417.
59. In that email, Ms. Milescu stated: "We've pulled 85 tractors off the SLG dedicated lanes to cover [redacted] commitments. SLG won't notice until January." The redacted reference was subsequently identified, through Vantor's supplemental document production, as a reference to the Northwind Distribution Co. account. Additional documents in the supplemental production confirmed that the fleet redeployment from SLG-dedicated lanes to Northwind Distribution Co. lanes had commenced in October 2021, approximately one month before the date of the Milescu email.
60. This evidence is profoundly significant for several reasons. First, it establishes that VTS made a conscious, affirmative decision to reduce the fleet capacity available for SLG-dedicated service. The 85 tractors redeployed to Northwind represent approximately 21.3 percent of VTS's 400-tractor commitment to Stonefield and account for a substantial portion of the 92-tractor equipment availability shortfall observed in Q4 2021. Second, the Milescu email's reference to the expectation that "SLG won't notice until January" demonstrates that VTS understood the redeployment would violate its contractual obligations and deliberately chose to conceal it from Stonefield. Third, the timing of the redeployment — commencing in October 2021 — places the voluntary fleet diversion before the onset of the SLO failures that Stonefield subsequently cited in its Cure Notice, establishing VTS's redeployment as the proximate cause of the performance breakdown.
61. The causal connection between the fleet redeployment and VTS's SLO failures is apparent from the data. Pulling 85 tractors from SLG-dedicated lanes immediately reduced VTS's available capacity from 400 tractors to approximately 315, well below the 340-tractor minimum required under the equipment availability SLO. The reduced fleet capacity cascaded into failures across the other SLOs: with fewer tractors available, VTS was unable to accept tenders at the required rate (71.4 percent versus 90 percent), was unable to dispatch pickups and deliveries on time (78.2 percent on-time pickup and 81.6 percent on-time delivery versus the 95 percent and 93 percent thresholds, respectively), and experienced elevated cargo claims rates as remaining operations were stretched beyond sustainable limits.
62. Ms. Milescu confirmed the 85-tractor reassignment during her deposition on August 4, 2023. She testified that the redeployment was driven by what she characterized as "commercial necessity" and claimed it was intended to be "temporary." However, she was unable to explain why VTS failed to notify Stonefield of the redeployment, as required by the TSA's substitute equipment and notification provisions (Section 7.4). She was also unable to identify a specific date on which VTS planned to return the tractors to SLG-dedicated service or to provide any evidence that the redeployment was, in fact, temporary. Mr. Pruitt, in his deposition on July 10, 2023, acknowledged that VTS "struggled" to maintain committed fleet capacity in Q4 2021, but did not disclose the voluntary nature of the fleet reduction.
63. Vantor's suggestion that VTS's SLO failures were caused by the nationwide driver shortage or by Stonefield's alleged failure to tender minimum committed volumes is contradicted by the direct evidence of voluntary fleet redeployment. While the trucking industry did experience driver shortages during this period, the evidence shows that VTS had sufficient drivers to operate its fleet of 650 tractors — the problem was not a lack of drivers, but rather VTS's decision to deploy 85 of those tractors, along with their associated drivers, to the Northwind account rather than the SLG account. Similarly, Vantor's allegation that Stonefield failed to tender minimum committed volumes is addressed and refuted in Sections VIII.C and VIII.D of this Report.
C. VTS's Failure to Cure
64. The evidence further establishes that VTS failed to cure its material breaches within the 30-day cure period triggered by Stonefield's January 18, 2022 Cure Notice. Vantor's February 14, 2022 response to the Cure Notice acknowledged "operational challenges" but did not demonstrate that VTS had actually remediated any of the identified SLO deficiencies. The response attributed VTS's failures to external factors (driver shortage, Stonefield's alleged volume shortfalls, Stonefield's alleged volume diversion to spot carriers) rather than acknowledging the true cause — VTS's voluntary fleet redeployment. And critically, the response did not include any specific evidence or data showing that VTS had returned the redeployed tractors to SLG-dedicated lanes or had otherwise achieved compliance with the SLO thresholds.
65. Raymond Hess testified at his deposition on July 27, 2023 that the cure notice performance metrics were derived from VTS's own data as reported through the Carrier Performance Portal, and that VTS did not dispute the accuracy of the metrics in its February 14 response. Rather, VTS's response challenged only the characterization of the metrics as material breaches, not the metrics themselves.
66. Moreover, post-cure-period performance data from Stonefield's systems for early March 2022 — the period immediately following the expiration of the 30-day cure period on February 17, 2022 — shows continued failures across the SLO categories, indicating that VTS had not achieved cure by the time Stonefield issued its termination letter on March 4, 2022. While I have not been asked to render a legal opinion on whether VTS's cure efforts were legally sufficient, my economic analysis of the performance data supports the conclusion that VTS's SLO breaches remained unremediated as of the cure period's expiration.
D. Conclusion — Zero Damages
67. If the Court determines that Stonefield validly terminated the TSA for Cause under Section 13.1(a), then no breach by Stonefield occurred. In the absence of a breach by Stonefield, there is no economic basis for any award of damages to Vantor. Under this scenario, Vantor's entire $95.4 million claim fails as a matter of economic causation — the termination was a lawful exercise of Stonefield's contractual rights, not a breach giving rise to liability.
68. The economic evidence overwhelmingly supports the conclusion that VTS's SLO failures were real, severe, and caused by VTS's own voluntary conduct rather than by external factors beyond its control. Accordingly, it is my opinion, held to a reasonable degree of economic certainty, that if the termination was valid for Cause, Vantor is entitled to zero dollars in damages.
V. OPINION 2: ALTERNATIVE LOST-PROFITS ANALYSIS — MAXIMUM DAMAGES OF $8.2 MILLION
A. Framework for Alternative Analysis
69. My second opinion addresses, in the alternative, the maximum damages to which Vantor could be entitled if the Court determines that Stonefield's termination of the TSA was not valid for Cause — i.e., that the termination constituted a wrongful breach by Stonefield. I wish to emphasize that I do not accept this premise. As set forth in Section IV, the economic evidence strongly supports the conclusion that VTS's SLO breaches were real and uncured, and that Stonefield's termination was therefore valid for Cause. However, consistent with my engagement, I have conducted an alternative damages analysis assuming arguendo that the termination was wrongful, in order to demonstrate that even under this unfavorable assumption, Vantor's recoverable damages are dramatically lower than the $95.4 million claimed in the Trask Report.
70. Under New York law, the proper measure of damages for breach of a contract to provide services over a defined term is the non-breaching party's expectation interest — that is, the amount necessary to put the non-breaching party in the position it would have occupied had the contract been performed as agreed. In the context of a wrongful termination of a multi-year transportation services agreement, this expectation interest is most appropriately measured as the non-breaching party's lost profits on the remaining term of the contract, calculated as the contract revenue the non-breaching party would have earned, net of the costs it would have incurred to perform, and further reduced by amounts the non-breaching party did or could have earned through reasonable mitigation efforts.
71. This is the standard lost-profits methodology that is widely accepted in commercial damages analysis. It is not, as Dr. Trask's Report implicitly suggests, appropriate to claim both liquidated damages (which are themselves intended to substitute for actual damages) and actual lost profits covering the same contractual benefit. As I discuss in the following subsection, such duplicative recovery is neither economically sound nor legally permissible.
B. Elimination of Duplicative Damages
72. As an initial matter, I note that Dr. Trask's damages calculation includes both $67,230,000 in liquidated damages and $18,700,000 in lost profits, for a combined total of $85,930,000 attributable to the lost value of the remaining contract term. These two categories of damages compensate for the same fundamental economic harm: the revenue and profits that VTS expected to earn over the remaining term of the TSA.
73. This is duplicative recovery. Under New York law, a plaintiff cannot recover both liquidated damages and actual lost profits where both categories compensate for the loss of the same contractual benefit. A liquidated damages clause, when enforceable, substitutes for actual damages; it is an agreed-upon estimate of the loss, intended to relieve the non-breaching party of the burden of proving actual damages. A plaintiff must elect between liquidated damages and actual damages — it cannot have both.
74. Dr. Trask's approach of stacking liquidated damages on top of lost profits is economically incoherent. The liquidated damages formula in Section 14.2 is designed to compensate VTS for the value it loses from the early termination of the contract — the same value that a lost-profits analysis is designed to measure. To award both would compensate Vantor twice for the same loss.
75. For purposes of my alternative analysis, I reject the liquidated damages claim entirely — both because it is duplicative of the lost-profits claim and because, as I demonstrate in Section VII, the formula produces economically disproportionate results that render it unenforceable as a penalty. Instead, I calculate actual lost profits as the proper measure of Vantor's damages.
C. Corrected Lost-Profits Calculation
1. Revenue Base.
76. The starting point for a lost-profits analysis is the identification of the revenue base — the contract revenue that VTS would have earned over the remaining term of the TSA, absent the termination. The remaining term consisted of approximately two years and twenty-seven days (March 4, 2022 through March 31, 2024).
77. Using the ACV of $43.2 million per contract year, the gross remaining-term revenue can be estimated as follows:
• Two full contract years: 2 × $43,200,000 = $86,400,000
• Partial year (27 days): $43,200,000 × (27/365) ≈ $3,195,616
• Total gross remaining-term revenue: approximately $89,600,000 (rounded)
78. However, the $43.2 million ACV figure is an aspirational contractual minimum, not a realistic projection of actual revenue. Two factors necessitate a downward adjustment to the revenue base. First, Vantor's own financial performance in fiscal year 2022 — in which its consolidated revenue declined by 19.5 percent — suggests that VTS would not have earned the full ACV on the SLG account even if the contract had remained in effect. VTS's revenue decline was driven by the same market forces that were depressing freight volumes and rates industry-wide. Second, the national freight market underwent a significant softening beginning in mid-2022 and extending through 2023, as discussed in the following subsection. This market deterioration would have reduced the actual volume of freight available for VTS to carry under the TSA.
2. Market Adjustment.
79. Dr. Trask's analysis assumes that VTS would have earned the full ACV in each of the remaining contract years, with stable revenue and margins extending through March 2024. This assumption ignores the reality of the freight market conditions that actually prevailed during the relevant period.
80. National freight market data from Tarrant Software and the Dunmore Systems shows that the truckload freight market entered a significant downturn in mid-2022 that continued through 2023 and into early 2024. Specifically:
• Truckload contract rates declined by approximately 15 to 20 percent from mid-2022 through the end of 2023.
• Truckload spot rates — which serve as a barometer of freight demand and capacity dynamics — declined by approximately 30 to 35 percent from their peak in Q1 2022 to their trough in Q4 2023.
• Freight volumes, as measured by the Cass Freight Shipments Index, declined by approximately 7 percent year-over-year in 2023, following an approximately 3 percent decline in the second half of 2022.
81. Stonefield's own financial performance reflected these market conditions. Stonefield's revenue declined from approximately $1.42 billion in fiscal year 2021 to approximately $1.28 billion in fiscal year 2022, a decline of approximately 9.9 percent. Vantor's own revenue declined even more sharply, from approximately $385 million in fiscal year 2021 to approximately $310 million in fiscal year 2022, a decline of approximately 19.5 percent.
82. These data points make clear that the freight market during the remaining term of the TSA was materially weaker than the market conditions prevailing during the period on which Dr. Trask bases his revenue and margin assumptions. Even in the absence of the termination, VTS would have experienced reduced freight volumes, downward rate pressure, and compressed margins during the March 2022 through March 2024 period.
83. To account for these market conditions, I have applied a 15 percent reduction to the gross remaining-term revenue base, yielding a market-adjusted revenue figure of approximately $76,160,000. This adjustment is conservative; it is at the low end of the 15 to 20 percent range of contract rate declines observed during the relevant period, and it does not incorporate the more dramatic 30 to 35 percent decline in spot rates.
3. Margin Correction.
84. Dr. Trask applies a uniform 12 percent operating margin to the remaining-term revenue to calculate lost profits. This margin is based on VTS's company-wide operating margins for fiscal years 2019 through 2021. As an initial matter, I note that the use of a company-wide margin to estimate profitability on a specific account is methodologically unsound. Different customer accounts yield different margins depending on the negotiated rate levels, the geographic footprint of the lanes served, the fleet utilization efficiency, and the cost structure associated with the particular service model (dedicated versus on-demand, asset-based versus asset-light).
85. My analysis of VTS's internal financial records — including account-level profitability data, lane-specific rate and cost data, and fleet deployment records — reveals that the SLG-specific operating margin was substantially lower than VTS's company-wide average. Specifically, I estimate the SLG account operating margin at approximately 7 to 8 percent in fiscal year 2021, compared to the 12 percent company-wide average used by Dr. Trask. Three factors contributed to this margin differential:
(a) Competitive Rate Levels. The per-mile rates in Schedule B of the TSA were negotiated at competitive levels that reflected

EXPERT REBUTTAL REPORT OF DR. EVELYN ROSSER

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

VANTOR HOLDINGS CORP.,

STONEFIELD LOGISTICS GROUP INC.,

I. INTRODUCTION AND PURPOSE OF REPORT

II. BACKGROUND AND KEY FACTS

III. OVERVIEW OF THE TRASK REPORT AND ITS DAMAGES METHODOLOGY

IV. OPINION 1: IF THE TERMINATION WAS VALID FOR CAUSE, VANTOR'S DAMAGES ARE ZERO

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