ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL / ATTORNEY WORK PRODUCT — This memorandum is subject to the attorney-client privilege and the work product doctrine. It is intended solely for the use of the addressees and authorized recipients. Do not distribute, copy, or disclose without the prior written consent of Calderwood & Harkness LLP.
CALDERWOOD & HARKNESS LLP 787 Seventh Avenue New York, New York 10019
MEMORANDUM
FROM: Nathaniel Bower, Calderwood & Harkness LLP, 787 Seventh Avenue, New York, NY 10019
TO: Dame Elspeth Greenvale, Transitional Chair, Board of Directors, Aurelius Global Media Group PLC Nadine Khalil, General Counsel & Corporate Secretary, Aurelius Global Media Group PLC
CC: Colette Whitman, Calderwood & Harkness LLP Audrey Zhou, Calderwood & Harkness LLP Brendan Walsh, Calderwood & Harkness LLP
DATE: June 15, 2024
RE: Preservation of Special Committee Records — Matter No. 1017-00002
I. Purpose and Background
The purpose of this memorandum is to provide comprehensive guidance to the Board of Directors of Aurelius Global Media Group PLC ("AGMG" or the "Company") and to the General Counsel's office regarding the retention, cataloging, and privilege preservation of all records generated by or for the Special Committee of the Board of Directors (the "Special Committee") during the CEO succession process and the Board's response to the activist campaign initiated by Corvus Peak Capital Partners LP ("Corvus Peak"). In light of the dissolution of the Special Committee and the anticipated termination of Calderwood & Harkness LLP's engagement as governance counsel, it is imperative that comprehensive preservation protocols be adopted and implemented without delay.
By way of background, the Special Committee was formed by unanimous resolution of the Board of Directors on March 18, 2024. The Special Committee was composed of three independent, non-executive directors: Tobias Kessler (Chair), Lucinda Farrow-Grant, and Dr. Anwen Llewellyn. Pursuant to its charter, the Special Committee was granted sole and exclusive authority to oversee the CEO succession process following the retirement of then-CEO Sir Richard Ashgrove, and to coordinate the Board's strategic response to the activist campaign launched by Corvus Peak, a Delaware-organized limited partnership and significant AGMG shareholder holding approximately 9.7% of the Company's outstanding ordinary shares as of its most recent Schedule 13D/A filing.
Over the course of its existence, the Special Committee retained an executive search firm (Hargrove Tate Partners LLC), engaged a financial advisor (Stonebridge Crane & Co.) to evaluate strategic alternatives in parallel with the CEO search, received extensive legal advice from Calderwood & Harkness LLP, and conducted multiple rounds of candidate identification, evaluation, and interviews. The Special Committee also oversaw the Board's consideration of, and response to, a settlement proposal from Corvus Peak and its legal counsel, Blackthorn Howell & Crane LLP.
Subsequent to the Company's Annual General Meeting held on June 7, 2024, the Board was reconstituted. Three incumbent directors — Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos — were not re-elected by the shareholders. In their place, three nominees put forward by Corvus Peak were elected to the Board: Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu. Following the Board's reconstitution, the newly constituted Board passed a resolution on June 14, 2024, dissolving the Special Committee and tabling the CEO succession process indefinitely.
The departure of Tobias Kessler from the Board warrants particular attention. As the Chair of the Special Committee, Kessler was the primary point of contact for both Calderwood & Harkness and the various advisors engaged by the Committee. He is likely in possession of substantial Committee records, including handwritten notes from candidate interviews, electronic communications on personal and corporate devices, and copies of privileged legal memoranda. Because Kessler is no longer a director of the Company, timely collection and preservation of the records in his possession is a matter of urgency.
Additionally, we note the pending termination of Calderwood & Harkness's engagement. On June 21, 2024, the General Counsel's office notified Calderwood & Harkness that its engagement as governance counsel to AGMG would be terminated effective July 8, 2024. The reconstituted Board has announced its intention to engage new governance counsel. We understand that Blackthorn Howell & Crane LLP was subsequently engaged on July 15, 2024, with Dominic Sayer serving as lead partner. The implications of this transition for the preservation of privileged Special Committee materials are addressed in detail in Part VI of this memorandum.
The preservation of Special Committee records is critical for several independent and overlapping reasons:
(a) Potential Reopening of the CEO Search. Although the reconstituted Board has tabled the CEO succession process, there is no assurance that the process will not be reopened at a future date. The work product generated during the search — including candidate assessments, evaluation matrices, reference check materials, and interview notes — represents significant institutional investment and would be essential to any future search effort. The interim designation of Priya Nair-Whitfield as Interim CEO does not resolve the succession question on a permanent basis.
(b) Pending DGCL § 220 Books-and-Records Demand. On March 22, 2024, Corvus Peak served a demand for inspection of books and records under Section 220 of the Delaware General Corporation Law (the "DGCL"), seeking, among other things, materials relating to the CEO search process, Special Committee deliberations, and Board-level communications regarding the succession. AGMG, through Calderwood & Harkness, objected on privilege and other grounds by letter dated April 2, 2024. The demand remains unresolved. A privilege log has been prepared (final version dated July 1, 2024). Any destruction, alteration, or loss of Special Committee records could severely prejudice AGMG's position in the event that Corvus Peak initiates an enforcement proceeding in the Court of Chancery of the State of Delaware, which is the exclusive forum for such disputes under Section 11.1 of the Company's Amended and Restated Bylaws.
(c) Foreseeable Fiduciary Duty Litigation. Given the contested nature of the CEO succession process, the factionalism that characterized the Board during the activist campaign, and the ultimate reconstitution of the Board with activist nominees, the risk of derivative or direct fiduciary duty litigation is substantial and foreseeable. Such litigation could challenge the Special Committee's process, the Board's response to the Corvus Peak campaign, or the circumstances surrounding the tabling of the CEO succession. Special Committee records will be central to any such defense.
(d) D&O Insurance Considerations. The Company maintains a directors' and officers' liability insurance policy with Helmsley Indemnity Corp. (Policy No. HIC-DOL-2024-009347). In the event of a claim under the policy, AGMG and the insured directors may be required to produce records that document the Board's and the Special Committee's decision-making process. Destruction of process records could jeopardize coverage under the policy. Moreover, departing directors Kessler, Pemberton, and Delgado-Ríos remain insured under the policy for acts and omissions during their periods of service, and tail coverage considerations further reinforce the imperative of comprehensive record preservation.
For all of the foregoing reasons, we strongly recommend that AGMG adopt and implement the preservation protocols set forth in this memorandum without delay.
II. Categories of Special Committee Records Requiring Preservation
Set forth below is a comprehensive (though not necessarily exhaustive) catalog of the categories of records generated by or for the Special Committee during its existence. All records falling within these categories should be collected, inventoried, and preserved in accordance with the protocols described in Part V.
A. Special Committee Charter and Formation Documents
The foundational governance documents of the Special Committee constitute core corporate records that must be preserved indefinitely. These include:
1. The draft Special Committee Charter, prepared by Calderwood & Harkness LLP and circulated to the Board on March 18, 2024, together with any markup, comment, or revision history reflecting the Board's deliberations on the scope and authority of the Committee.
2. The executed Special Committee Charter, as adopted by the Board of Directors on March 18, 2024, bearing the signatures of Dame Elspeth Greenvale (then Vice Chair of the Board) and Nadine Khalil (Corporate Secretary).
3. The Board resolution forming the Special Committee, approved unanimously on March 18, 2024, which defines the Committee's mandate, authority, composition, and reporting obligations.
4. The Board resolution dissolving the Special Committee, approved on June 14, 2024 by the reconstituted Board, together with any minutes or records of the deliberations preceding the dissolution vote.
5. Any amendments, supplemental authorizations, or modifications to the Special Committee's charter or mandate adopted during the Committee's existence, including any resolutions expanding the Committee's authority to encompass the strategic alternatives review or to engage financial advisors.
B. CEO Search Process Materials
The CEO search process generated a substantial body of records that reflect the Special Committee's diligence, process, and deliberations. These materials are particularly sensitive in light of the pending § 220 demand and the possibility of fiduciary duty litigation, and many are subject to the attorney-client privilege or the work product doctrine. The following records should be collected and preserved:
1. Engagement of Executive Search Firm. The engagement letter with Hargrove Tate Partners LLC, an executive search firm retained by the Special Committee on March 15, 2024. The engagement was led by Christine Aldridge, a senior partner at Hargrove Tate. The terms of the engagement provide for a flat fee of $750,000, plus reasonable expenses, payable in three installments. We note that only the first installment of $250,000 was paid before the CEO succession process was tabled. All correspondence, invoices, and engagement documentation relating to the Hargrove Tate retention should be preserved.
2. Candidate Identification and Evaluation Materials. All correspondence between the Special Committee and Hargrove Tate Partners relating to candidate identification, outreach, and preliminary assessment, including initial candidate profiles, sector analyses, and market-mapping materials. This includes the candidate long list, the short list, and all evaluation matrices used to rank and compare candidates against the criteria established by the Special Committee.
3. Candidate Interview Notes. Notes, summaries, and records from the April 18, 2024 interview session, during which the Special Committee interviewed five external CEO candidates. We understand that interview notes were taken by various participants, including Tobias Kessler, Lucinda Farrow-Grant, Dr. Anwen Llewellyn, and Christine Aldridge. These notes may exist in handwritten, typed, or electronic form. All versions should be collected. Among the candidates interviewed was Jonathan Hale, whose candidacy is discussed further below.
4. Evaluation Framework Memorandum. Calderwood & Harkness's memorandum dated April 5, 2024, titled Evaluation Framework for Internal vs. External CEO Candidates, which provided the analytical framework used by the Special Committee to assess candidates and was prepared in connection with providing legal advice regarding the Board's fiduciary obligations in the succession context.
5. Candidate Interview Summary. Calderwood & Harkness's privileged memorandum dated April 20, 2024, titled Special Committee Update — Candidate Interview Summary and Observations, which synthesized the results of the April 18, 2024 interviews and provided legal advice regarding the Committee's next steps.
6. Internal Candidate Materials — Priya Nair-Whitfield. All materials relating to the evaluation of Priya Nair-Whitfield, the Company's Chief Operating Officer and Interim CEO, as an internal candidate for the permanent CEO role. This includes performance data, strategic presentations made by Nair-Whitfield to the Special Committee, and compensation benchmarking data prepared by Brackenridge Howard Associates Inc. (lead consultant Miriam Estabrook), an independent compensation advisory firm engaged to provide market comparables and total compensation analysis for both internal and external candidates.
7. External Candidate Materials — Jonathan Hale. All materials relating to the evaluation of Jonathan Hale as an external candidate, including his background materials, résumé, and professional references. Hale previously served as Chief Executive Officer of Meridian Studios International Inc. from 2014 to 2022, during which tenure he oversaw Meridian's $3.1 billion acquisition by Zenith Consolidated Entertainment Corp. Of particular sensitivity is the conflict-of-interest analysis undertaken by Calderwood & Harkness regarding Hale's professional and personal relationship with Damien Solberg, the Chief Investment Officer of Corvus Peak Capital Partners. Hale and Solberg served together on the board of directors of Keystone Digital Ventures Ltd. from 2019 to 2021. The conflict analysis is memorialized in Calderwood & Harkness's memorandum dated April 19, 2024, titled Conflicts of Interest — Jonathan Hale and Corvus Peak, which was delivered to the Special Committee in advance of the Committee's deliberations on the short list.
8. Other Candidate Materials. All other candidate dossiers, reference check summaries, background investigation reports, and related materials generated during the CEO search process, regardless of whether the candidates advanced to the interview stage.
C. Calderwood & Harkness Memoranda Delivered to the Special Committee
Throughout the Special Committee's existence, Calderwood & Harkness prepared and delivered a series of legal memoranda addressing governance, fiduciary duty, conflicts, process, and strategic considerations. Each of these memoranda constitutes attorney-client privileged communications and attorney work product. They should be collected, marked as privileged, and preserved in the segregated privileged materials sub-folder described in Part V.D below. The memoranda include, but are not limited to, the following:
1. Memorandum: Special Committee Charter — Best Practices and Proposed Terms (March 17, 2024) — providing recommendations on the scope of authority, composition, and procedural framework for the Special Committee's charter.
2. Memorandum: CEO Search Process — Recommended Governance Protocols (March 20, 2024) — outlining the governance protocols recommended for the CEO search, including documentation standards, meeting procedures, and conflict management.
3. Memorandum: Special Committee Process Recommendations — CEO Search (March 22, 2024) — providing additional process recommendations following the Committee's organizational meeting.
4. Memorandum: Board Fiduciary Duties in CEO Succession Under Delaware Law (March 25, 2024) — analyzing the fiduciary obligations of directors and committee members in the context of a CEO succession process under Delaware law, including the application of the business judgment rule and the enhanced scrutiny standard.
5. Memorandum: Interim CEO Designation — Fiduciary Considerations (March 28, 2024) — analyzing whether the Board's designation of Priya Nair-Whitfield as Interim CEO created an implied precommitment to her candidacy for the permanent role, and the fiduciary implications thereof.
6. Memorandum: Evaluation Framework for Internal vs. External CEO Candidates (April 5, 2024) — setting forth the recommended evaluation framework discussed in Part II.B.4 above.
7. Memorandum: Conflicts of Interest — Jonathan Hale and Corvus Peak (April 19, 2024) — analyzing the conflict-of-interest issues arising from the Hale/Solberg relationship discussed in Part II.B.7 above.
8. Memorandum: Special Committee Update — Candidate Interview Summary and Observations (April 20, 2024) — summarizing the April 18 interview session and providing legal observations and recommendations.
9. Any other advisory memoranda, email memoranda, presentations, or written legal advice delivered by Calderwood & Harkness to the Special Committee, its individual members, or the General Counsel's office in connection with the Special Committee's mandate.
D. Special Committee Meeting Minutes and Agendas
Formal meeting records constitute core corporate governance documents and are subject to preservation obligations under both Delaware law and the Company's own record-retention policies. The following records should be collected and preserved:
1. All meeting agendas prepared for Special Committee sessions held between March 18, 2024 and June 14, 2024.
2. All minutes of Special Committee meetings, whether in draft or final form, prepared by Nadine Khalil in her capacity as Corporate Secretary or by designated Committee counsel.
3. Attendance records for all Special Committee meetings, including records of participation by non-member attendees such as Calderwood & Harkness attorneys, representatives of Hargrove Tate Partners, representatives of Stonebridge Crane & Co., and Company management.
4. Records of any telephonic or video conference meetings of the Special Committee, including dial-in logs, calendar invitations, and any recordings (if any recordings were made, they should be preserved and not destroyed).
5. Any written or electronic consents, unanimous written actions, or other records of Committee action taken outside of formal meetings.
We note that the quality and completeness of the meeting minutes will be a critical factor in any future assessment of the Special Committee's process, whether in the context of fiduciary duty litigation, a § 220 inspection, or a D&O insurance claim. We encourage the General Counsel to review all minutes to confirm that they accurately and completely reflect the Committee's deliberations and that final, executed versions are maintained in the corporate records.
E. Correspondence Relating to the Activist Response
The Special Committee's mandate encompassed not only the CEO succession process but also coordination of the Board's response to the Corvus Peak activist campaign. Substantial records were generated in connection with this aspect of the Committee's work, and these records must be preserved with equal rigor. The relevant records include:
1. All internal Special Committee correspondence regarding the Corvus Peak proxy contest, including analyses of Corvus Peak's public filings (Schedule 13D and amendments thereto), proxy materials, and public statements.
2. Materials relating to the settlement proposal submitted by Corvus Peak on May 10, 2024. The proposal offered the immediate seating of two Corvus Peak nominees on the Board, with the CEO search to be paused and the Special Committee's mandate narrowed. The Board, acting on the Special Committee's recommendation, rejected this proposal. All records reflecting the Committee's analysis of and deliberations on the proposal should be preserved.
3. Calderwood & Harkness's memorandum dated May 30, 2024, titled Settlement Analysis and Recommendation, which analyzed the terms of the Corvus Peak proposal and provided legal advice regarding the Board's fiduciary obligations in evaluating the settlement.
4. The draft Term Sheet: Proposed Cooperation Agreement with Corvus Peak (June 2, 2024), prepared by Calderwood & Harkness as a potential counterproposal in connection with the reopened settlement discussions that commenced on or about June 1, 2024.
5. All materials from the reopened settlement discussions, including correspondence, meeting notes, and term sheets exchanged between AGMG (or its representatives) and Corvus Peak (or its counsel).
6. Any direct or indirect communications between Special Committee members and representatives of Corvus Peak, including its Chief Investment Officer Damien Solberg, or its legal counsel at Blackthorn Howell & Crane LLP (lead partner Dominic Sayer). This includes any informal or back-channel communications that may have occurred outside of the formally structured negotiation process.
F. Financial Advisor Materials
The Special Committee engaged Stonebridge Crane & Co. as its financial advisor to evaluate strategic alternatives in parallel with the CEO search. The records generated in connection with this engagement are commercially sensitive and, to the extent they were shared in the context of obtaining legal advice, may also be subject to the attorney-client privilege. The following records should be preserved:
1. The engagement letter with Stonebridge Crane & Co., executed on April 22, 2024. The engagement was led by Anil Kapoor-Mehta, a managing director at Stonebridge Crane. The terms provide for a monthly retainer of $250,000 and a transaction fee of 0.25% of enterprise value in the event of a strategic transaction. All correspondence, invoices, and engagement documentation should be preserved.
2. Calderwood & Harkness's Confidentiality and Information Barrier Protocols memorandum dated April 26, 2024, which established the information wall between the strategic alternatives review conducted by Stonebridge Crane and the CEO search process conducted by Hargrove Tate Partners. This memorandum was designed to prevent the inappropriate flow of information between the two workstreams and to protect the integrity of the CEO evaluation process. Compliance with these protocols may be a subject of inquiry in any future litigation.
3. Any strategic alternatives analyses, preliminary valuation materials, industry benchmarking data, or other financial advisory materials provided by Stonebridge Crane to the Special Committee, whether in draft or final form.
4. Presentation materials prepared by Stonebridge Crane for Special Committee meetings, including any board books, slide decks, or written summaries.
G. Emails, Electronic Communications, and Informal Notes
Electronic and informal communications represent a significant and often overlooked category of corporate records. These communications may contain candid assessments, real-time deliberations, and contemporaneous observations that could be highly relevant in any future litigation or regulatory proceeding. The following should be collected and preserved:
1. All emails sent to, from, or among Special Committee members (Tobias Kessler, Lucinda Farrow-Grant, and Dr. Anwen Llewellyn) relating to Committee business, whether sent via corporate email accounts or personal accounts. This includes emails with Calderwood & Harkness attorneys, Hargrove Tate Partners, Stonebridge Crane & Co., Brackenridge Howard Associates, Company management, and any other parties.
2. Text messages, instant messages (including messages sent via Northgate Data Systems, Meridian Solutions, Meridian Services Inc., Signal, or any other messaging platform), or other electronic communications on personal devices or corporate platforms that relate to Special Committee business.
3. Handwritten notes taken by Committee members during meetings, interviews, telephone calls, or at any other time in connection with Committee business. Handwritten notes are often the most candid and contemporaneous records of deliberations and are routinely sought in discovery.
4. Calendar entries, scheduling communications, and dial-in or login records for Special Committee meetings or calls.
We wish to emphasize the particular urgency of collecting electronic communications from departing director Tobias Kessler. As of June 7, 2024, Kessler is no longer a director of the Company and, accordingly, the Company's ability to compel the return of materials in his possession may diminish over time. Kessler served as Chair of the Special Committee and was the most active participant in the CEO search process. His records — particularly his handwritten interview notes and personal device communications — are among the most critical materials to be preserved. We strongly recommend that the General Counsel contact Kessler without delay to arrange collection of all Company materials in his possession and to obtain his written confirmation that all copies on personal devices have been returned or preserved. Mr. Kessler's cooperation obligations in this regard are addressed in Calderwood & Harkness's memorandum on Duties of Departing Directors dated June 9, 2024, which was delivered to Mr. Kessler and to the General Counsel.
Similar requests should be directed to the other departing directors, Hugh Pemberton and Sofia Delgado-Ríos, although their involvement in Special Committee work was less direct, as neither served as a member of the Special Committee. Nevertheless, as members of the full Board, they may have received copies of Special Committee reports, updates, or privileged memoranda, and any such materials should be returned and preserved.
III. Privilege Analysis and Protection
The records generated by and for the Special Committee include a substantial volume of materials that are protected by the attorney-client privilege, the work product doctrine, or both. This Part provides an analysis of the applicable privilege protections, identifies key risks of waiver, and addresses the implications of the pending DGCL § 220 demand.
A. Attorney-Client Privilege
All communications between Calderwood & Harkness LLP and the Special Committee (or the Board of Directors as a whole) that were made for the purpose of providing or receiving legal advice are protected by the attorney-client privilege. This includes the memoranda identified in Part II.C, as well as oral communications in meetings and on telephone calls, and written correspondence (including email) between Calderwood & Harkness attorneys and Committee members, the General Counsel, and other authorized recipients.
The attorney-client privilege belongs to the client — here, Aurelius Global Media Group PLC, acting through its Board of Directors. Individual directors do not independently hold the corporate privilege and cannot unilaterally assert or waive it. This is a well-established principle under Delaware law. See Wal-Mart Stores, Inc. v. Indiana Elec. Workers Pension Trust Fund IBEW, 95 A.3d 1264, 1278 (Del. 2014).
Upon dissolution of the Special Committee, the privilege over Special Committee communications reverts to and is controlled by the full Board of Directors, as now reconstituted. This is a critical point. The reconstituted Board now includes three directors nominated by Corvus Peak — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu. Because the full Board controls the corporate privilege, the Board could, by majority vote, waive the privilege over some or all Special Committee communications. Such a waiver could expose the details of the CEO search process, the Board's deliberations regarding the activist response, and the legal advice received by the Special Committee to Corvus Peak and to any other party.
This risk underscores the importance of proper segregation and labeling of privileged materials, as discussed in Part V.D below, and of ensuring that access to privileged materials is not inadvertently granted to directors or other individuals without appropriate Board authorization.
We also note that Ashworth Velmoran LLP, AGMG's standing outside counsel (lead partner Martin Cho), holds privileged communications with Company management relating to various corporate matters, some of which may overlap with or relate to the CEO search or activist response. A coordination protocol between Calderwood & Harkness and Ashworth Velmoran was established on March 19, 2024 to delineate the scope of each firm's engagement and to avoid duplication or conflict. The General Counsel should reference this coordination protocol to ensure that Ashworth Velmoran's privileged materials are also properly cataloged and preserved, and that the boundaries between the two engagements are maintained in any privilege log or index.
B. Work Product Doctrine
Separately from the attorney-client privilege, the work product doctrine protects materials prepared by an attorney (or at an attorney's direction) in anticipation of litigation or in connection with providing legal advice. Given the circumstances prevailing during the Special Committee's existence — including the pending DGCL § 220 books-and-records demand, the contested proxy solicitation, the foreseeable risk of derivative litigation, and the Board-level factionalism — virtually all Calderwood & Harkness memoranda, analytical materials, draft documents, and internal notes constitute work product prepared in anticipation of litigation.
The work product doctrine provides protections that are, in certain respects, broader than the attorney-client privilege. Most significantly, work product protection survives even if the client waives the attorney-client privilege, except in the limited circumstance where the requesting party demonstrates "substantial need" for the materials and an inability to obtain the substantial equivalent by other means without undue hardship. See Fed. R. Civ. P. 26(b)(3); Del. Ch. Ct. R. 26(b)(3). "Opinion work product" — materials reflecting the mental impressions, conclusions, opinions, or legal theories of an attorney — receives even greater protection and is virtually immune from discovery.
Accordingly, even in the event that the reconstituted Board were to waive the attorney-client privilege over Special Committee communications, a significant portion of Calderwood & Harkness's work product may remain protected. Nevertheless, we strongly recommend that the Company take all steps to preserve both privileges, as the protections are complementary and the loss of either would be damaging.
C. Risks of Inadvertent Waiver
The commingling of privileged and non-privileged materials creates a meaningful risk of inadvertent disclosure. If privileged documents are stored alongside non-privileged materials without clear labeling or segregation, there is a heightened risk that privileged materials may be inadvertently produced in response to a § 220 demand, a litigation discovery request, or a regulatory inquiry. Such inadvertent production could, depending on the circumstances, result in a waiver of the privilege as to the disclosed materials and, in some cases, a broader subject-matter waiver.
In addition, the distribution of privileged materials beyond the Special Committee raises distinct waiver concerns. During the course of the CEO search, certain privileged or potentially privileged materials may have been shared with non-legal advisors, including:
• Hargrove Tate Partners LLC (executive search firm);
• Stonebridge Crane & Co. (financial advisor);
• Brackenridge Howard Associates Inc. (compensation consultant); and
• Company management personnel outside the Special Committee.
Sharing privileged communications with third parties generally waives the privilege unless the sharing is properly structured under an applicable exception. The most relevant exceptions include:
(a) The common-interest doctrine, which preserves the privilege where communications are shared among parties with a common legal interest pursuant to a written or implied agreement. This doctrine may apply to communications shared with financial or search advisors, but only if the sharing was in furtherance of a common legal interest and was reasonably necessary to the provision or receipt of legal advice.
(b) The Kovel doctrine (derived from United States v. Kovel, 296 F.2d 918 (2d Cir. 1961)), which preserves the privilege where a non-legal advisor is engaged to assist the attorney in providing legal advice and the communication is made in confidence for that purpose.
We recommend that the General Counsel, in coordination with successor counsel, conduct a review to identify any instances where privileged materials may have been shared with Hargrove Tate Partners, Stonebridge Crane, Brackenridge Howard Associates, or other non-legal advisors, and to assess whether such sharing was properly structured under the common-interest doctrine, the Kovel doctrine, or another applicable exception. Any deficiencies identified in this review should be documented and addressed in connection with the privilege log.
D. DGCL § 220 Demand Implications
As noted in Part I, Corvus Peak served a books-and-records demand under DGCL § 220 on March 22, 2024, seeking inspection of certain Company records relating to, among other things, the CEO search process and Special Committee deliberations. The demand was directed to the Company and was served by Corvus Peak's counsel, Blackthorn Howell & Crane LLP (Dominic Sayer).
AGMG, through Calderwood & Harkness, objected to the demand on multiple grounds, including the attorney-client privilege and the work product doctrine, by letter dated April 2, 2024, addressed to Dominic Sayer. The parties have not reached agreement on the scope of the inspection, and the demand remains unresolved as of the date of this memorandum.
A privilege log has been prepared by Calderwood & Harkness, with the final version dated July 1, 2024, listing all documents withheld from production on the basis of the attorney-client privilege, the work product doctrine, or both. The privilege log identifies each withheld document by date, author, recipients, general subject matter, and the specific privilege asserted. This log will be delivered to the General Counsel and to successor counsel as part of the transition materials described in Part VI.
The § 220 demand remains a live dispute that could result in litigation in the Court of Chancery of the State of Delaware, which is the exclusive forum for such disputes pursuant to Section 11.1 of the Company's Amended and Restated Bylaws. Successor counsel must be fully briefed on the status of this dispute, the scope and content of the privilege log, and the preservation obligations attendant to the pending demand.
We cannot overstate the importance of the following point: any destruction, alteration, or loss of Special Committee records could have severe adverse consequences in connection with the § 220 demand and any related litigation. The Court of Chancery takes a dim view of spoliation, and the failure to preserve responsive records — whether privileged or not — could result in adverse inferences, sanctions, or the compelled production of materials that would otherwise be privileged.
IV. Retention Obligations — Legal and Regulatory Framework
AGMG's obligation to preserve Special Committee records arises under multiple overlapping legal and regulatory frameworks, as well as contractual obligations under the Company's D&O insurance policy. This Part summarizes the principal retention obligations applicable to the Company.
A. Delaware Law Obligations
AGMG is incorporated in the State of Delaware and is subject to the recordkeeping and inspection provisions of the DGCL. Section 220 of the DGCL requires corporations to maintain "books and records" that are subject to inspection upon proper demand by a stockholder who satisfies the statutory prerequisites. Board and committee minutes, resolutions, and formal records of corporate action are among the core "books and records" of the corporation. See Thomas & Betts Corp. v. Leviton Mfg. Co., 681 A.2d 1026 (Del. 1996).
Even after the dissolution of the Special Committee, AGMG has a continuing obligation to maintain the Committee's records. The dissolution of the Committee does not alter the corporate nature of the records generated during the Committee's existence; they remain part of AGMG's corporate books and records and are subject to inspection under § 220. Furthermore, the pending § 220 demand from Corvus Peak imposes an independent preservation obligation that supersedes any routine document retention schedule that might otherwise permit disposal of certain records.
B. SEC and Exchange Obligations
AGMG's ordinary shares are listed on the New York Stock Exchange under the ticker symbol "AGMG" and are admitted to trading on the London Stock Exchange Main Market under the ticker symbol "AGMG.L." As a result, the Company is subject to the recordkeeping requirements of the U.S. Securities and Exchange Commission (the "SEC") and the reporting obligations of the Financial Conduct Authority (the "FCA") in the United Kingdom.
Under SEC rules, publicly listed companies are required to maintain certain records relating to corporate governance, including board and committee meeting minutes, records of corporate action, and materials relating to proxy solicitations. The Company's proxy solicitation materials in connection with the June 7, 2024 Annual General Meeting, all correspondence with shareholders (including Corvus Peak), and all Schedule 13D and Schedule 13D/A filings and related correspondence should be preserved as part of the Company's regulatory recordkeeping obligations.
Additionally, the rules of the New York Stock Exchange require listed companies to maintain corporate governance records and to make them available for examination by the Exchange upon request. The Company's compliance with these requirements should be confirmed.
C. UK Regulatory Requirements
AGMG is registered as an overseas company in England and Wales and is subject to certain provisions of the UK Companies Act 2006, as well as to the FCA's Disclosure Guidance and Transparency Rules ("DTR"). DTR 5 imposes notification requirements in connection with major shareholding changes, and the Company's records relating to notifications received from Corvus Peak and other significant shareholders should be preserved.
Under the UK Companies Act, companies are required to maintain records of board and committee proceedings for a minimum period of ten years. Although AGMG's primary jurisdiction of incorporation is Delaware, its status as an overseas company registered in England and Wales imposes parallel recordkeeping obligations that should be taken into account in establishing the retention period for Special Committee records.
D. D&O Insurance Policy Requirements
The Company maintains a directors' and officers' liability insurance policy with Helmsley Indemnity Corp. under Policy No. HIC-DOL-2024-009347. The policy provides coverage of $75 million per occurrence and $150 million in the aggregate, with an annual premium of $3.8 million. The policy period runs from January 1, 2024 through December 31, 2024.
In the event of a claim under the policy — whether by a current or former director, by the Company itself, or by a third party — AGMG and the insured individuals may be required to produce records documenting the Board's and the Special Committee's decision-making process. The destruction of process records could be cited by the insurer as a basis for denying or limiting coverage, particularly if the insurer contends that the destruction materially prejudiced its ability to evaluate the claim.
It is also important to note that the departing directors — Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos — remain insured under the policy for acts and omissions during their periods of service on the Board. Tail coverage provisions in the policy may extend this protection for a period of years following the end of their service. The preservation of Special Committee records is essential to supporting any claim that these individuals may assert under the policy and to ensuring that the Company fulfills its obligations to cooperate with the insurer in the administration of claims.
We recommend that the General Counsel confirm the Company's notice obligations under the Helmsley Indemnity policy and assess whether the circumstances surrounding the CEO succession process, the activist campaign, and the Board reconstitution give rise to an obligation to provide notice of circumstances that may lead to a claim.
E. Litigation Hold
In light of the pending DGCL § 220 demand, the foreseeable risk of fiduciary duty litigation, and the D&O insurance considerations discussed above, a formal litigation hold should be implemented — or, if already in place, confirmed and reinforced — covering all Special Committee records.
The litigation hold should be communicated in writing to the following individuals and groups:
1. All current directors of the Board, including the newly seated Corvus Peak nominees (Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu).
2. All former directors who served during the Special Committee's existence, including Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos.
3. The General Counsel and Corporate Secretary, Nadine Khalil.
4. Garrett Voss, Chief Financial Officer, to the extent that financial records relating to advisor engagement fees, search expenses, or other Committee-related expenditures are within his custody or control.
5. The Company's IT department and any custodians of electronic data, including administrators of the corporate email system, document management system, and any cloud-based storage platforms used for Committee business.
6. Any other individuals who may have custody or control over Special Committee materials, including administrative assistants, legal department staff, and records management personnel.
The litigation hold notice should instruct all recipients to preserve all documents, communications, and electronic data relating to the Special Committee, the CEO succession process, and the Board's response to the Corvus Peak activist campaign. The hold should expressly cover electronic systems — including email servers, document management platforms, shared network drives, backup tapes, and cloud storage — as well as personal devices (mobile phones, tablets, personal laptops, and personal email accounts) used by any individual for Committee business.
The hold should remain in effect until affirmatively released by the General Counsel or by successor counsel, and should not be lifted without prior legal review.
V. Recommended Preservation Protocols
Based on the foregoing analysis, we recommend that AGMG adopt and implement the following preservation protocols. These protocols are designed to ensure the comprehensive collection, secure storage, and ongoing accessibility of all Special Committee records, while maintaining the integrity of applicable privilege protections.
A. Centralized Repository
All Special Committee records — whether in physical or electronic form — should be consolidated into a single, secure, centralized repository maintained by the General Counsel's office under Nadine Khalil's direct supervision. Centralization is essential to prevent the fragmentation, loss, or inadvertent disclosure of records that may occur when materials are dispersed among multiple custodians and storage locations.
Physical documents — including handwritten notes, printed memoranda, board books, and other tangible materials — should be collected from all current and former Committee members, the General Counsel's office, and any other locations where such materials may be stored. Upon collection, all physical documents should be inventoried using a standardized intake form that records the document's date, title or description, author, source (i.e., the individual or location from which the document was collected), and privilege status. Physical documents should be stored in a secure, access-controlled location — such as a locked filing room or a secure off-site storage facility — with access limited to the General Counsel and specifically authorized personnel.
Electronic documents — including email, electronic memoranda, presentations, spreadsheets, and other digital files — should be migrated to a designated restricted-access folder on the Company's document management system. The folder should be labeled clearly (e.g., "Special Committee Records — Restricted Access") and access should be limited to the General Counsel, the General Counsel's designees, and outside counsel. Standard access controls and audit logging should be enabled to track all access to and modifications of the repository.
B. Collection from Departing Director Tobias Kessler
As the former Chair of the Special Committee, Tobias Kessler is likely in possession of the most significant and comprehensive set of Committee records among the individual directors. His records are expected to include:
• Handwritten notes from candidate interviews (particularly the April 18, 2024 session);
• Personal copies of Calderwood & Harkness memoranda and board books;
• Electronic communications (email, text messages, and instant messages) relating to Committee business, which may reside on both corporate and personal devices; and
• Any other documents or materials received or generated in connection with his service as Special Committee Chair.
AGMG should promptly — and we recommend within the next five business days — contact Mr. Kessler in writing to request the return of all Company materials in his possession, custody, or control, including all copies on personal devices. Mr. Kessler should be asked to provide a written certification confirming that all such materials have been returned or, in the case of electronic copies, preserved and made available for collection. Calderwood & Harkness's memorandum on Duties of Departing Directors dated June 9, 2024 addresses the cooperation obligations applicable to Mr. Kessler and may be referenced in the collection request.
If Mr. Kessler declines to cooperate or disputes the Company's right to his personal notes, the General Counsel should consult with counsel regarding the Company's rights and remedies, including the possibility of seeking a court order if necessary.
Similar collection requests should be directed to Hugh Pemberton and Sofia Delgado-Ríos, the other two departing directors. Although neither Pemberton nor Delgado-Ríos served as a member of the Special Committee, both were members of the full Board during the Committee's existence and may have received copies of Committee reports, updates, or privileged memoranda circulated to the full Board. Any such materials should be returned and preserved.
C. Collection from Continuing Committee Members
The two remaining Special Committee members — Lucinda Farrow-Grant and Dr. Anwen Llewellyn — continue to serve on the Board and are therefore subject to the Company's direction regarding the handling of corporate records. Both should be directed to surrender all Special Committee materials in their possession to the centralized repository, including:
• All physical documents, including handwritten notes, printed memoranda, and board books;
• All electronic documents, including copies of email communications, attachments, and electronic files stored on corporate or personal devices; and
• Any personal device communications (text messages, instant messages, or other electronic communications) relating to Committee business.
If personal device communications cannot be transferred to the centralized repository in their native format, the Company's IT department should work with Ms. Farrow-Grant and Dr. Llewellyn to create forensically defensible copies or exports of the relevant communications. Under no circumstances should such communications be deleted from personal devices until they have been successfully collected and verified.
D. Segregation of Privileged Materials
All documents identified as attorney-client privileged or attorney work product should be clearly marked with the legend "PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION / ATTORNEY WORK PRODUCT" on the face of the document (for physical documents) or in the metadata or file name (for electronic documents).
Within the centralized repository, a segregated sub-folder (or, for physical documents, a segregated section) should be created specifically for privileged materials. This segregation serves two purposes: (1) it reduces the risk of inadvertent disclosure by ensuring that privileged materials are not commingled with non-privileged records, and (2) it facilitates the Company's ability to assert and defend privilege claims in the event of a § 220 enforcement action or other litigation.
Access to privileged materials should be strictly restricted. In particular, access should not be granted to the newly seated Corvus Peak nominee directors — Malcolm Trask, Vanessa Loring, and Dr. Raymond Chu — without a specific resolution of the Board of Directors addressing the privilege waiver implications of such access. While these individuals are now duly elected directors of the Company and are, in that capacity, fiduciaries of the corporation, the substance of the Special Committee's privileged communications relates to matters in which Corvus Peak — the entity that nominated them — was an adverse party. Providing access to these materials without careful deliberation could constitute an effective waiver of the privilege and could expose the Company to significant risk.
We recognize that this recommendation raises sensitive governance issues regarding the rights of directors to access corporate information. Calderwood & Harkness's memorandum dated June 12, 2024, titled Board Process Integrity Post-Reconstitution, addresses information barrier and recusal protocols that are relevant to this issue and should be consulted in connection with any Board deliberation on the question of access.
E. Inventory and Index
A complete and detailed index of all preserved Special Committee records should be prepared as promptly as practicable. The index should include, at a minimum, the following fields for each document:
• Document title or description
• Date of the document
• Author(s)
• Recipient(s) or addressee(s)
• Document type (e.g., memorandum, email, minutes, presentation, handwritten notes)
• Privilege status (privileged, work product, both, or non-privileged)
• Physical or electronic location within the centralized repository
• Bates number or other unique document identifier (if assigned)
The index should be cross-referenced with (a) the privilege log prepared for the DGCL § 220 demand (final version dated July 1, 2024), and (b) the index of Calderwood & Harkness work product delivered to the client (also dated July 1, 2024). Cross-referencing these documents will ensure consistency, facilitate the identification of any gaps or discrepancies, and provide successor counsel with a comprehensive roadmap to the Special Committee's documentary record.
F. Retention Period
We recommend a minimum retention period of seven (7) years from the date of dissolution of the Special Committee — that is, through at least June 14, 2031 — or such longer period as may be required by pending or threatened litigation, regulatory investigation, or other legal proceedings. This recommendation is consistent with:
• Calderwood & Harkness's own file retention policy, which provides for a seven-year hold on client files following the conclusion of a matter;
• General best practices for the retention of board and committee governance records;
• The applicable statutes of limitations for fiduciary duty claims under Delaware law (generally three years, but subject to tolling and equitable exceptions); and
• The UK Companies Act's requirement to preserve board records for a minimum of ten years.
The retention period should be extended automatically if any litigation, regulatory investigation, insurance claim, or other proceeding related to the CEO succession process, the activist campaign, or the reconstitution of the Board is commenced at any time during the retention period. No Special Committee records should be destroyed, discarded, or deleted without the prior written authorization of the General Counsel, following consultation with outside counsel.
VI. Transition to Successor Counsel
As noted in Part I, Calderwood & Harkness's engagement as governance counsel to AGMG terminates effective July 8, 2024. The reconstituted Board has engaged Blackthorn Howell & Crane LLP as new governance counsel, with Dominic Sayer serving as lead partner. Calderwood & Harkness is preparing and will deliver a comprehensive transition memorandum, dated July 1, 2024, which catalogs all advice given by Calderwood & Harkness to the Special Committee and the Board, identifies all pending issues and open matters, and provides recommendations for successor counsel.
The preservation protocols outlined in this memorandum should be communicated to successor counsel promptly upon engagement. In particular, successor counsel should be briefed on:
(a) The scope and content of the centralized repository of Special Committee records;
(b) The privilege log prepared in connection with the § 220 demand and the status of the demand;
(c) The segregation protocols for privileged materials and the access restrictions applicable to the Corvus Peak nominee directors;
(d) The litigation hold and the identity of all individuals to whom hold notices have been issued; and
(e) The D&O insurance notice obligations and the contact information for Helmsley Indemnity Corp.
We wish to draw particular attention to a matter of significant concern regarding the selection of successor counsel. Blackthorn Howell & Crane LLP previously represented Corvus Peak Capital Partners LP in the activist campaign that was the subject of the Special Committee's mandate. Dominic Sayer, the lead partner on the AGMG engagement, is the same attorney who served as lead partner on the Corvus Peak engagement. While we understand that Blackthorn Howell & Crane has represented that it has obtained appropriate conflict waivers and has implemented internal screens, the fact remains that the firm has intimate knowledge of Corvus Peak's objectives, strategy, and legal positions — knowledge that was acquired in an engagement directly adverse to the Special Committee's work.
This creates a heightened risk that privileged Special Committee materials could be accessed by attorneys or personnel whose prior representation of Corvus Peak gives them a perspective and understanding of the materials that is fundamentally different from that of an independent successor counsel. Even if individual attorneys at Blackthorn Howell & Crane are screened from the prior Corvus Peak matter, the institutional knowledge within the firm cannot be entirely eliminated.
Accordingly, we recommend the following precautionary measures:
1. AGMG should obtain written confirmation from Blackthorn Howell & Crane LLP regarding the firm's obligations to protect the attorney-client privilege and work product protections attaching to all existing Special Committee materials, and the firm's acknowledgment that it will not use or disclose such materials for the benefit of any current or former client, including Corvus Peak.
2. Access protocols should be formalized in writing before any transfer of Special Committee records (or copies thereof) to successor counsel. These protocols should specify which attorneys and personnel at Blackthorn Howell & Crane will have access to the materials, what internal screens or information barriers are in place, and what procedures will be followed if a conflict issue arises.
3. AGMG should consider whether the engagement of separate, independent counsel for the purpose of managing the § 220 demand and any related litigation would be advisable, given the conflict dynamics described above. An independent firm with no prior relationship to Corvus Peak would provide the Board with an additional layer of protection against inadvertent or strategic erosion of the privilege.
These recommendations reflect Calderwood & Harkness's obligation to protect the interests of the client — AGMG — even in the context of the termination of our engagement. We recognize that the selection of successor counsel is a matter within the Board's discretion, and we offer these observations in a spirit of professional responsibility and candor.
VII. Specific Recommendations for Immediate Action
Based on the analysis and recommendations set forth in this memorandum, we recommend that the following actions be taken promptly. We have organized these recommendations in order of priority, though all should be completed as expeditiously as practicable.
1. Issue Litigation Hold Notice. Issue a formal written litigation hold notice to all current and former directors of the Board (including Tobias Kessler, Hugh Pemberton, and Sofia Delgado-Ríos), to Nadine Khalil (General Counsel and Corporate Secretary), to Garrett Voss (Chief Financial Officer), and to the Company's IT custodians. The notice should cover all Special Committee materials, CEO succession records, and activist response records, and should instruct all recipients to preserve all responsive materials in all formats, including electronic communications on personal devices.