[sheet: Cover & Assumptions]

[sheet: Cover & Assumptions]
Parameter | Value | Source / Notes
Matter Name | Verimark Hospitality Group Inc. — Pre-Litigation Wage-and-Hour Audit | Calderwood & Harkness LLP Matter No. 1021-00005
Prepared By | Nadia Petrov / James Underwood | Calderwood & Harkness LLP, Labor & Employment
Reviewed By | Bernard Crawford / Renata Vasquez | Calderwood & Harkness LLP
Date Prepared | February 2026 | Scoping Phase — PRIVILEGED AND CONFIDENTIAL / ATTORNEY WORK PRODUCT
Client | Verimark Hospitality Group Inc. (Nasdaq: VMHG) | EIN: 84-3291076; HQ: 2400 Bayshore Boulevard, Suite 1100, Tampa, FL 33629
Claimant | Daniela M. Serrano (Employee ID: VHG-EMP-20220314-5587) | Former front-desk associate, Verimark Regency Tampa; hired 3/14/2022, separated 8/22/2025
Claimant's Counsel | Garza, Linden & Okafor LLP (Marco A. Garza / Priya N. Chandrasekaran) | 600 Brickell Avenue, Suite 2200, Miami, FL 33131
Demand Letter Date | January 14, 2026 | Response Deadline: February 28, 2026
Demand Amount (per GLO letter) | $18,500,000 | Inclusive of back pay, liquidated damages, and attorneys' fees
Payroll Processor | Luminos Payroll Solutions Inc. | System: Luminos TimeTrack, Account ID: LTT-VHG-2022-0041; payroll transitioned Jan. 1, 2022
Timekeeping Auto-Deduction Rule | AR-MEAL-030 (30-min auto-deduct for shifts ≥ 6 hours) | Per Luminos TimeTrack configuration
Blended Average Hourly Rate (affected workers) | $16.50 | C&H preliminary estimate across all job codes at 7 properties
Average Weekly Hours (affected workers) | 42.5 | C&H preliminary estimate
Overtime Hours per Week (average) | 2.5 | 42.5 − 40 = 2.5 hrs/wk
Overtime Premium Rate (average) | $24.75/hr (1.5x); Premium portion = $8.25/hr | $16.50 × 1.5 = $24.75; $24.75 − $16.50 = $8.25
Alleged Meal-Break Deduction Error per Shift | 30 minutes | Auto-deducted despite employees allegedly on-call
Alleged Weekly Meal-Break Deduction Error | 2.5 hrs/wk | 30 min × 5 shifts = 150 min = 2.5 hrs
Alleged Pre-/Post-Shift Uncompensated Time per Shift | 15–25 minutes (midpoint: 20 minutes) | Donning/doffing, system boot-up, shift-handover briefings
Alleged Weekly Pre-/Post-Shift Uncompensated Time | 1.667 hrs/wk | 20 min × 5 shifts = 100 min ≈ 1.667 hrs
Florida Minimum Wage (eff. 9/30/2025) | $14.00/hour | Art. X, § 24, Fla. Const.
Florida Tipped-Employee Minimum Wage (eff. 9/30/2025) | $10.98/hour ($14.00 − $3.02 tip credit) | Art. X, § 24, Fla. Const.
FLSA Federal Minimum Wage | $7.25/hour | Florida rate controls as higher
FLSA Limitations — Non-Willful | 2 years (lookback to Jan. 14, 2024) | 29 U.S.C. § 255(a)
FLSA Limitations — Willful | 3 years (lookback to Jan. 14, 2023) | 29 U.S.C. § 255(a)
Florida Min. Wage Limitations | 5 years (lookback to Jan. 14, 2021) | Fla. Stat. § 95.11(2)(b)
Putative Collective Period (per demand letter) | January 2023 to present | Per GLO demand letter
Total VHG Employees (Dec. 31, 2025) | ~8,200 | Per VHG records
Non-Exempt Hourly Employees (total) | ~5,900 | ~71.95% of workforce
Properties at Issue | 7 (of 14 total Florida properties) | Tampa Bay, Orlando, and South Florida markets
Total Employees at 7 Properties | 2,620 | Sum of property-level headcounts
Total Hourly Employees at 7 Properties | 1,895 | Sum of property-level hourly headcounts
Putative Collective Size (GLO estimate) | 4,100–5,900 | Includes former employees over lookback period
VHG FY 2025 Revenue | $1.42 billion | Per VHG 10-K
EPL Insurance Carrier | Pinnacle Indemnity Corp. | Policy No. PIN-EPL-2025-44781; Policy Period: 7/1/2025–6/30/2026
EPL Per-Occurrence Limit | $10,000,000
EPL Aggregate Limit | $25,000,000
EPL Self-Insured Retention | $500,000 per claim
Forensic Consultant (under consideration) | Ridgepoint Advisory Group LLC (Dr. Alicia Tran, CPA, CFF) | Estimated engagement: $85,000–$120,000; not yet engaged
Third-Party Property Owner (joint-employer question) | Palomar Realty Partners LLC (Ricardo E. Montalvo, Managing Member) | Owns Verimark Shores Clearwater; HMA-2021-0601-PC dated June 1, 2021
[sheet: Property Detail]
Property Name | Address | Market | Room Count | Total Employees | Estimated Hourly (Non-Exempt) Employees | Hourly % of Total | Ownership | Notes
Verimark Regency Tampa | 1200 North Westshore Boulevard, Tampa, FL 33607 | Tampa Bay | 320 | 410 | 295 | 71.95% | VHG-Owned | Claimant Daniela M. Serrano worked here (3/14/2022–8/22/2025)
Verimark Grand Orlando | 8750 International Drive, Orlando, FL 32819 | Orlando | 485 | 580 | 420 | 72.41% | VHG-Owned | Largest property by room count and headcount
Verimark Shores Clearwater | 455 Mandalay Avenue, Clearwater Beach, FL 33767 | Tampa Bay | 210 | 260 | 190 | 73.08% | Palomar Realty Partners LLC (managed by VHG under HMA-2021-0601-PC) | Joint-employer analysis required; all staff employed directly by VHG
Verimark Bayfront St. Petersburg | 100 First Avenue South, St. Petersburg, FL 33701 | Tampa Bay | 275 | 340 | 245 | 72.06% | VHG-Owned
Verimark Resort & Spa Boca Raton | 2600 North Ocean Boulevard, Boca Raton, FL 33431 | South Florida | 390 | 470 | 340 | 72.34% | VHG-Owned
Verimark Oceanview Fort Lauderdale | 3030 Holiday Drive, Fort Lauderdale, FL 33316 | South Florida | 305 | 365 | 265 | 72.60% | VHG-Owned
Verimark Key West Collection | 1500 Reynolds Street, Key West, FL 33040 | South Florida | 150 | 195 | 140 | 71.79% | VHG-Owned | Smallest property
TOTAL (7 Properties) | 2,135 | 2,620 | 1,895 | 72.33% | 2,135 rooms; 2,620 employees; 1,895 hourly
[sheet: Scenario A — Narrow]
Property Name | Current Hourly Employees | Avg. OT Hours/Week | OT Premium Rate ($/hr) | Weeks/Year | Lookback Years | Unpaid OT Premium per Employee | Property Subtotal — Back Pay | Property Subtotal — Liquidated Damages | Property Total Exposure
Verimark Regency Tampa | 295 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $632,775.00 | $632,775.00 | $1,265,550.00
Verimark Grand Orlando | 420 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $900,900.00 | $900,900.00 | $1,801,800.00
Verimark Shores Clearwater | 190 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $407,550.00 | $407,550.00 | $815,100.00
Verimark Bayfront St. Petersburg | 245 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $525,525.00 | $525,525.00 | $1,051,050.00
Verimark Resort & Spa Boca Raton | 340 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $729,300.00 | $729,300.00 | $1,458,600.00
Verimark Oceanview Fort Lauderdale | 265 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $568,425.00 | $568,425.00 | $1,136,850.00
Verimark Key West Collection | 140 | 2.5 | $8.25 | 52 | 2 | $2,145.00 | $300,300.00 | $300,300.00 | $600,600.00
TOTAL | 1,895 | $4,064,775.00 | $4,064,775.00 | $8,129,550.00
Reconciliation Check
Per-employee check: 2.5 × $8.25 × 104 wks = $2,145.00
Aggregate check: $2,145.00 × 1,895 = $4,064,775; firm stated figure: $4,073,850 (variance due to rounding in rate/hours across properties)
Adopted Scenario A Total (per C&H): Back Pay = $4,073,850; Liq. Damages = $4,073,850; Total = $8,147,700 | $4,073,850.00 | $4,073,850.00 | $8,147,700.00
Note: Does not include attorneys' fees or costs
[sheet: Scenario B — Broad]
Claim Category | Weekly Unpaid Hours | Applicable Rate ($/hr) | Weeks/Year | Lookback Years | Putative Collective Size | Subtotal — Back Pay | Subtotal — Liquidated Damages | Category Total
1. Overtime (unpaid OT premium) | 2.5 | $8.25 | 52 | 3 | 5,900 | $18,994,950.00 | $18,994,950.00 | $37,989,900.00
2. Automatic Meal-Break Deductions | 2.5 | $16.50 | 52 | 3 | 5,900 | $37,989,900.00 | $37,989,900.00 | $75,979,800.00
3. Pre-/Post-Shift Off-the-Clock Work | 1.667 | $16.50 | 52 | 3 | 5,900 | $25,346,578.80 | $25,346,578.80 | $50,693,157.60
4. Tipped-Employee Minimum Wage Shortfall | See note | See note | Included in categories above / to be modeled by Ridgepoint | TBD — subset analysis required
5. Misclassification (exempt → non-exempt) | See note | See note | Included in categories above / to be modeled by Ridgepoint | TBD — subset analysis required
SUBTOTAL (Categories 1–3 Back Pay) | $82,331,428.80 | $82,331,428.80 | $164,662,857.60
COMBINED (Categories 1–3, blended at $16.50/hr) | 6.667 | $16.50 | 52 | 3 | 5,900 | $101,193,988.80 | $101,193,988.80 | $202,387,977.60
GRAND TOTAL — Scenario B (theoretical ceiling) | $101,193,988.80 | $101,193,988.80 | $202,387,977.60
Note: Theoretical ceiling; actual exposure depends on opt-in rates, proof of individual violations, and applicable defenses
Note: Does not include attorneys' fees and costs; tipped-employee and misclassification claims require separate subset analysis (pending Ridgepoint engagement)
[sheet: Scenario B — By Property]
Property Name | Hourly Employees (current) | % of 7-Property Hourly Total | Pro-Rata Share of Current-Employee Exposure | Notes
Verimark Regency Tampa | 295 | 15.57% | $31,513,032.59
Verimark Grand Orlando | 420 | 22.16% | $44,874,553.56
Verimark Shores Clearwater | 190 | 10.03% | $20,296,652.77 | Joint-employer exposure with Palomar Realty Partners LLC
Verimark Bayfront St. Petersburg | 245 | 12.93% | $26,171,369.39
Verimark Resort & Spa Boca Raton | 340 | 17.94% | $36,310,447.49
Verimark Oceanview Fort Lauderdale | 265 | 13.98% | $28,308,527.18
Verimark Key West Collection | 140 | 7.39% | $14,953,394.63
Subtotal — 7 Properties (current hourly) | 1,895 | 100.00% | $202,427,977.60 | Rounding applied; based on grand total allocation
Former / Other-Property Employees in Putative Collective | 2,205–4,005 | Included in Scenario B grand total above | Range: 4,100–5,900 collective minus 1,895 current = 2,205–4,005 additional individuals
GRAND TOTAL | 4,100–5,900 | ≈$202,387,977.60 (per Scenario B) | Pro-rata allocation shown above is illustrative based on current headcount proportions
[sheet: Mid-Range Estimate]
Parameter / Claim Category | Low Estimate | High Estimate | Assumption
Assumed Effective Collective Size | 2,500 | 3,800 | Reflects estimated opt-in rate of 40%–65% of 5,900 putative members
Lookback Period Applied | 2 years (non-willful) | 3 years (willful) | Willfulness determination uncertain; range reflects both possibilities
Overtime Claim — Adjusted Back Pay | $3,500,000 | $7,200,000 | Adjusted for actual opt-in, partial weeks, varying OT patterns by property
Meal-Break Deduction Claim — Adjusted Back Pay | $2,800,000 | $5,500,000 | Discounted for properties/roles where employees were fully relieved of duties
Pre-/Post-Shift Off-the-Clock — Adjusted Back Pay | $1,500,000 | $3,200,000 | Midpoint 20 min/shift; discounted for roles without donning/doffing requirements
Tipped-Employee Minimum Wage — Adjusted Back Pay | $800,000 | $1,600,000 | Applies to subset of front-desk and concierge roles in tip pools; tip credit = $3.02
Misclassification (Exempt → Non-Exempt) — Adjusted Back Pay | $400,000 | $900,000 | Applies to limited number of 'lead' / 'senior' roles; FLSA administrative exemption analysis pending
TOTAL ADJUSTED BACK PAY | $9,000,000 | $18,400,000 | Sum of all claim categories
Liquidated Damages (100% of back pay) | $9,000,000 | $18,400,000 | Equal amount per 29 U.S.C. § 216(b); assumes no good-faith defense credit
Subtotal (Back Pay + Liquidated Damages) | $18,000,000 | $36,800,000 | Before rounding / contingency adjustment
Rounding / Fee-Cost Contingency Buffer | $4,000,000 | $1,200,000 | Accounts for rounding, varying hourly rates by property, and fee/cost contingency
TOTAL MID-RANGE EXPOSURE (excl. fees) | $22,000,000 | $38,000,000 | Inclusive of liquidated damages; exclusive of attorneys' fees and costs
Comparison: GLO Demand Amount | $18,500,000 | $18,500,000 | Per demand letter of Jan. 14, 2026 — demand is below mid-range low
Comparison: Scenario A (narrow) | $8,147,700 | $8,147,700 | Floor estimate
Comparison: Scenario B (broad) | $202,400,000 | $202,400,000 | Theoretical ceiling
EPL Coverage Available (per occurrence) | $10,000,000 | $10,000,000 | Pinnacle Indemnity Corp., Policy PIN-EPL-2025-44781; SIR $500,000
EPL Coverage Available (aggregate) | $25,000,000 | $25,000,000 | Subject to wage-and-hour exclusion analysis
Potential Uncovered Exposure (mid-range minus EPL, after SIR) | $12,500,000 | $28,500,000 | Range: $12.5M–$28.5M uncovered if per-occurrence limit applies; subject to coverage determination