CONFIDENTIAL — INTERNAL FIRM USE ONLY — NOT FOR DISTRIBUTION OUTSIDE CALDERWOOD & HARKNESS LLP
MEMORANDUM
June 25, 2025
TO: Howard Bellamy, Responsible Partner, Antitrust & Competition Practice Group Elaine Forsythe, Billing Partner, Antitrust & Competition Practice Group
FROM: Office of the General Counsel, Calderwood & Harkness LLP (Conflicts Review Committee)
RE: Conflict Clearance — Proposed Representation of Cascade Retail Holdings Inc. in FTC v. Cascade Retail Holdings Inc. et al., Case No. 2:25-cv-01087-RAJ (W.D. Wash.); Related FTC Administrative Proceeding, Docket No. 9438
Firm Matter No.: 1038-00001
Conflicts Check Request Submitted By: Howard Bellamy, June 23, 2025
Clearance Status: APPROVED — No disqualifying conflicts identified
I. Purpose of Memorandum
This memorandum documents the results of the firm-wide conflicts review conducted by the Conflicts Review Committee of the Office of the General Counsel of Calderwood & Harkness LLP in connection with the proposed engagement of the firm by Cascade Retail Holdings Inc. ("Cascade" or the "Proposed Client") to serve as lead defense counsel in the Federal Trade Commission's challenge to Cascade's proposed acquisition of Pinnacle Market Group Inc. ("Pinnacle"). The FTC has brought suit in two forums: (i) an administrative proceeding before the Commission, captioned In the Matter of Cascade Retail Holdings Inc., Docket No. 9438, and (ii) a civil action in the United States District Court for the Western District of Washington, captioned FTC v. Cascade Retail Holdings Inc. et al., Case No. 2:25-cv-01087-RAJ, in which the Commission seeks a preliminary injunction pursuant to Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), to enjoin the transaction pending the outcome of the administrative proceeding.
This review was initiated upon receipt of a conflicts check request submitted by Howard Bellamy, Responsible Partner, on June 23, 2025, the same date on which the FTC filed its complaint in the Western District of Washington. Given the expedited litigation timeline — including a preliminary injunction evidentiary hearing currently scheduled for September 8, 2025 — and the need to formalize the engagement letter and begin substantive work without delay, the Conflicts Review Committee prioritized this review and completed its analysis on an expedited basis. The engagement letter is expected to be executed no later than June 25, 2025.
The conflicts review was conducted in accordance with the firm's Conflicts Review Policy and Procedures Manual (revised January 2025), in compliance with the applicable Rules of Professional Conduct, including Model Rules 1.7, 1.9, 1.10, and 1.13, as well as the Washington Rules of Professional Conduct and the Delaware Lawyers' Rules of Professional Conduct, both of which are substantively applicable to this engagement.
II. Description of the Proposed Engagement
A. Client Identification
The Proposed Client is Cascade Retail Holdings Inc. (Nasdaq: CSRT), a Delaware corporation headquartered at 2200 Westlake Avenue North, Suite 3400, Seattle, Washington 98109. Cascade's federal employer identification number is 91-2034817. Cascade is a publicly traded omnichannel retail and e-commerce company operating a portfolio of consumer-facing retail brands, a direct-to-consumer e-commerce platform ("CascadeDirect.com"), and a third-party online marketplace platform ("CascadeMarket"). As of June 27, 2025, Cascade had an approximate market capitalization of $41.2 billion based on the closing price of its common shares on the Nasdaq Global Select Market.
The primary client contact for purposes of this engagement is Jerome Weston, General Counsel and Corporate Secretary of Cascade Retail Holdings Inc. Mr. Weston has been designated by Cascade's Board of Directors as the authorized representative for communications with outside counsel in connection with the FTC litigation and related matters.
Additional key client personnel with whom the engagement team anticipates regular communication include:
• Margaret "Meg" Thornberry, Chief Executive Officer and Chairwoman of the Board of Directors
• David Ruan, President and Chief Operating Officer
• Sonia Alvarez-Kirk, Chief Financial Officer
• Patricia "Trish" Delacroix, Senior Vice President, Marketplace & Platform Strategy
Each of these individuals was included in the conflicts search, as detailed in Section III below. Each is expected to be a material fact witness in the FTC proceedings, given their respective roles in the strategic rationale for, negotiation of, and operational planning related to the proposed acquisition of Pinnacle.
B. Nature of the Matter
Calderwood & Harkness LLP is being engaged to serve as lead defense counsel for Cascade Retail Holdings Inc. in connection with the Federal Trade Commission's challenge to Cascade's proposed acquisition of Pinnacle Market Group Inc. for an aggregate all-cash purchase price of approximately $4.7 billion. The engagement encompasses the following matters:
1. Preliminary Injunction Proceeding. Defense of Cascade in FTC v. Cascade Retail Holdings Inc. et al., Case No. 2:25-cv-01087-RAJ, filed June 23, 2025 in the United States District Court for the Western District of Washington, assigned to the Honorable Richard A. Johannsen, United States District Judge. In this action, the FTC seeks a temporary restraining order and preliminary injunction under Section 13(b) of the FTC Act to prevent consummation of the merger pending the outcome of the administrative proceeding. An evidentiary hearing on the preliminary injunction motion is currently scheduled to commence on September 8, 2025.
2. Administrative Proceeding. Defense of Cascade in the FTC's administrative proceeding, In the Matter of Cascade Retail Holdings Inc., Docket No. 9438, initiated by the filing of an administrative complaint on June 20, 2025 before an FTC Administrative Law Judge. The administrative complaint alleges that the proposed acquisition would violate Section 7 of the Clayton Act, 15 U.S.C. § 18, and Section 5 of the FTC Act, 15 U.S.C. § 45, by substantially lessening competition in the alleged relevant market of "online marketplace platform services for third-party sellers in the United States."
3. Ancillary Motions, discovery, and Related Matters. The scope of the engagement includes all motions practice, fact and expert discovery, depositions, expert reports, pre-hearing briefing, evidentiary hearings, post-hearing briefing, and any appeals or related proceedings arising from or ancillary to the foregoing matters.
The FTC's central theory of harm, as set forth in its complaints, is that the combination of Cascade's CascadeMarket platform with Pinnacle's online marketplace would result in a merged entity controlling an alleged combined share of approximately 38.4% of gross merchandise value transacted through "online marketplace platform services for third-party sellers in the United States," a market the FTC alleges is distinct from broader e-commerce and traditional retail channels. The FTC further alleges that the transaction would eliminate Pinnacle as an independent competitive force, increase barriers to entry, and enable the merged firm to impose supracompetitive commission rates and less favorable terms on third-party sellers.
Cascade disputes the FTC's market definition, competitive effects analysis, and underlying factual assumptions, and intends to mount a vigorous defense of the transaction on both legal and economic grounds, including demonstrating that the proposed merger will generate substantial procompetitive efficiencies and consumer benefits.
C. Transaction Background
The following background information regarding the underlying transaction was provided by the engagement team and confirmed through review of publicly available filings:
Merger Agreement. Cascade and Pinnacle entered into an Agreement and Plan of Merger (the "Merger Agreement") on March 14, 2025. The transaction was publicly announced on March 17, 2025 through simultaneous press releases issued by both companies and Current Reports on Form 8-K filed with the Securities and Exchange Commission.
Transaction Structure. The acquisition is structured as a reverse triangular merger. CRH Merger Sub Inc. (EIN 91-2098433), a Delaware corporation and wholly owned subsidiary of Cascade formed for the purpose of effecting the transaction, will merge with and into Pinnacle Market Group Inc., with Pinnacle surviving the merger as a wholly owned subsidiary of Cascade. This structure preserves Pinnacle's existing contracts, licenses, and corporate identity.
Merger Consideration. The aggregate merger consideration is approximately $4.7 billion in cash, representing a price of $26.85 per share of Pinnacle common stock for each of the 175,047,319 shares of Pinnacle common stock outstanding (on a fully diluted basis, including shares issuable upon conversion of outstanding equity awards). The per-share price represents a premium of approximately 31% over Pinnacle's unaffected closing price on March 13, 2025.
Transaction Advisors. The following advisors are engaged in connection with the transaction:
• Cascade's Transaction Counsel: Harmon Ridgeway & Strauss LLP, New York, New York (Phillip Strauss, Lead M&A Partner; Monica Chen-Barrios, Partner). HRS has served as Cascade's primary outside counsel for corporate and transactional matters and negotiated the Merger Agreement on Cascade's behalf.
• Cascade's Financial Advisor: Mercer Hollis & Co., New York, New York (Graham Mercer IV, Managing Director; Yuki Tanabe, Vice President). Mercer Hollis rendered a fairness opinion to the Cascade Board of Directors in connection with the merger consideration.
• Pinnacle's Financial Advisor: Ridgeline Capital Partners, Austin, Texas (Nadine Vasquez, Managing Director). Ridgeline Capital rendered a fairness opinion to the Pinnacle Board of Directors.
• Acquisition Financing Lead Arranger: Whitmore National Bank, N.A. (Brian Alderman, Senior Managing Director, Leveraged Finance). Whitmore is the lead arranger and administrative agent for the debt financing package consisting of a $2.8 billion Term Loan B facility and a $500 million revolving credit facility under a committed financing letter dated March 13, 2025.
• Cascade's Auditor: Aldrich & Warwick CPAs LLP.
• Pinnacle's Auditor: Kessler Fong Accounting Group LLP.
• Cascade's Proxy Solicitor: Arundel Proxy Advisors LLC.
• Transfer Agent (both companies): Veltrano Transfer Services Inc.
• Cascade's Communications Advisor: Pendleton Crier & Associates (Douglas Crier, Senior Counselor).
Regulatory History. Cascade and Pinnacle submitted their pre-merger notification filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 on April 2, 2025 (Transaction No. HSR-20250402-0347). The initial statutory waiting period expired without early termination. On May 7, 2025, the FTC issued a Second Request for Additional Information and Documentary Material (File No. 251-0089) to both Cascade and Pinnacle. Both parties substantially complied with the Second Request, and Cascade certified substantial compliance on June 10, 2025. Rather than allowing the statutory waiting period to expire following substantial compliance, the FTC filed its administrative complaint on June 20, 2025 and its district court complaint seeking preliminary injunctive relief on June 23, 2025.
III. Parties and Entities Searched
In accordance with the firm's Conflicts Review Policy and Procedures Manual, the Conflicts Review Committee conducted a comprehensive search of the firm's electronic conflicts database (IntegrityCheck™ system, version 14.3) against all parties, adverse parties, co-parties, material third parties, and related entities identified in connection with the proposed engagement. The search was performed using exact-name matching, phonetic matching, alias and trade-name matching, and fuzzy-string matching algorithms, and was supplemented by manual review of search results by a senior conflicts analyst. The following parties and entities were included in the search:
A. Client and Client Affiliates
1. Cascade Retail Holdings Inc. (CSRT) — the Proposed Client
2. CRH Merger Sub Inc. — wholly owned subsidiary of Cascade formed for the purpose of effecting the merger
3. CascadeMarket — Cascade's third-party marketplace platform, operated as a "doing business as" trade name of Cascade Retail Holdings Inc. (not a separately incorporated entity)
4. CascadeDirect.com — Cascade's direct-to-consumer e-commerce platform, also operated as a d/b/a of Cascade Retail Holdings Inc.
5. Key officers and directors of Cascade:
• Margaret "Meg" Thornberry, CEO & Chairwoman
• David Ruan, President & COO
• Sonia Alvarez-Kirk, CFO
• Jerome Weston, General Counsel & Corporate Secretary
• Patricia "Trish" Delacroix, SVP, Marketplace & Platform Strategy
B. Adverse Party
1. Federal Trade Commission (Bureau of Competition, Mergers IV Division)
2. FTC personnel identified in the pleadings:
• Claire Dunmore, Lead Trial Attorney
• Samuel Ortega, Senior Trial Counsel
• Rebecca Yun, Staff Attorney
• Dr. Nathaniel Hargrove, Bureau of Economics, Staff Economist
The FTC is a federal government agency. Representation adverse to the FTC in a specific litigation matter does not generally give rise to a firm-wide conflict of interest, as the agency is not and cannot be a "client" of the firm. The search was nonetheless conducted for completeness and to identify any currently active advisory matters before the Commission or its staff that could present practical concerns, even if not rising to the level of a formal conflict under the Rules of Professional Conduct.
C. Co-Defendant.
1. Pinnacle Market Group Inc. (Nasdaq: PMGI), a Delaware corporation headquartered at 500 East 6th Street, Suite 800, Austin, Texas 78701; EIN 84-3291056
2. Pinnacle co-founders:
• Rajiv Chandravar, Chief Executive Officer
• Lena Kowalski, Chief Product Officer
3. Other Pinnacle officers:
• Thomas Breck, Chief Financial Officer
• Anita Suresh, General Counsel
Pinnacle is named as a co-defendant in both the district court and administrative proceedings. It is important to note that Pinnacle is not a proposed client of Calderwood & Harkness LLP. Pinnacle is separately represented in this matter by Whitfield, Greer & Tanaka LLP, 100 Congress Avenue, Suite 2200, Austin, Texas 78701 (Diana Whitfield, Lead Partner; Kenneth Oshiro, Senior Associate).
D. Co-Defendant's Counsel
1. Whitfield, Greer & Tanaka LLP
2. Diana Whitfield, Partner
3. Kenneth Oshiro, Senior Associate
E. Transaction-Related Advisors
1. Harmon Ridgeway & Strauss LLP (Cascade's transaction counsel) — Phillip Strauss, Monica Chen-Barrios
2. Mercer Hollis & Co. (Cascade's financial advisor) — Graham Mercer IV, Yuki Tanabe
3. Ridgeline Capital Partners (Pinnacle's financial advisor) — Nadine Vasquez
4. Whitmore National Bank, N.A. (acquisition financing lead arranger) — Brian Alderman
5. Aldrich & Warwick CPAs LLP (Cascade's auditor)
6. Kessler Fong Accounting Group LLP (Pinnacle's auditor)
7. Arundel Proxy Advisors LLC (Cascade's proxy solicitor)
8. Veltrano Transfer Services Inc. (transfer agent for both Cascade and Pinnacle)
9. Pendleton Crier & Associates (Cascade's communications advisor) — Douglas Crier
F. Proposed Experts and Consultants
1. Brindoval Analytics LLC — proposed economic and antitrust expert consultant retained on behalf of Cascade:
• Dr. Priya Ramanathan, Managing Director and Testifying Expert
• Dr. Lucas Engström, Senior Economist
2. Thornfield Research Group — the FTC's retained economic expert:
• Dr. Wallace Keenan, Testifying Expert
G. Named Competitors and Third Parties Likely to Be Involved
The following entities are identified in the FTC's complaint as competitors in the alleged relevant market and are likely to be recipients of third-party subpoenas, sources of fact testimony, or otherwise materially involved in the proceedings:
1. Vertex Commerce Inc. — a Delaware corporation headquartered in San Jose, California. Vertex operates the largest independent online marketplace platform in the United States and is identified in the FTC's complaint as holding approximately 35.7% of gross merchandise value transacted through online marketplace platform services.
2. Nomad Shops LLC — a Delaware limited liability company headquartered in Brooklyn, New York. Nomad Shops operates a curated artisan marketplace and is identified in the FTC's complaint as holding approximately 14.6% of online marketplace GMV.
3. Brevity Social Commerce Inc. — a Delaware corporation headquartered in Los Angeles, California. Brevity is a privately held company that launched its social-commerce marketplace platform in 2023.
4. Trove Marketplace Inc. — a Delaware corporation headquartered in Chicago, Illinois. Trove is a privately held company that launched its online marketplace platform in 2024.
H. Intervenor / Amicus Party
1. Independent Online Sellers Alliance ("IOSA") — a 501(c)(6) trade association, 1025 Vermont Avenue NW, Suite 600, Washington, D.C. 20005. IOSA has filed a motion to intervene in the district court proceedings on behalf of the FTC, asserting that its members — independent third-party sellers who transact through online marketplace platforms — will be harmed by the proposed merger.
2. Galloway & Peck LLP — counsel to IOSA, 60 East 42nd Street, Suite 2600, New York, New York 10165:
• Martina Galloway, Lead Partner
IV. Conflicts Database Search Results
The following sets forth the results of the conflicts database search for each party and entity identified in Section III, together with the Committee's analysis and conclusions as to whether any conflict of interest exists.
A. Cascade Retail Holdings Inc. (Proposed Client)
No current or prior representation of Cascade Retail Holdings Inc. or any of its subsidiaries, trade names (including CascadeMarket and CascadeDirect.com), or known affiliates was identified in the firm's conflicts database. No representation adverse to Cascade Retail Holdings Inc. was identified. None of the individual officers or directors of Cascade listed above (Thornberry, Ruan, Alvarez-Kirk, Weston, or Delacroix) appear in the firm's database as current or former clients or as parties adverse to the firm's clients.
Cascade Retail Holdings Inc. is a new client for Calderwood & Harkness LLP. In accordance with the firm's New Client Acceptance Policy, standard new-client due diligence — including Know Your Customer ("KYC") and Anti-Money Laundering ("AML") screening — will be completed by the Client Intake Department as a separate process and is not addressed in this memorandum. The engagement letter should not be executed until KYC/AML clearance is confirmed by the Client Intake Department.
Conclusion: No conflict identified. No further action required with respect to this party.
B. Federal Trade Commission
Calderwood & Harkness LLP has previously represented clients in regulatory advisory and compliance matters involving the Federal Trade Commission, including consumer protection investigations and prior merger clearance proceedings. A review of the firm's database identified three closed matters in which the firm interacted with FTC staff on behalf of clients in the ordinary course of regulatory representation. However, none of these matters involved direct engagement with the Bureau of Competition's Mergers IV Division, and none involved any of the specific FTC personnel identified in this case (Claire Dunmore, Samuel Ortega, Rebecca Yun, or Dr. Nathaniel Hargrove).
The prior FTC-related representations are factually unrelated to the present proceeding, involved different clients, different FTC divisions, and different subject matters, and do not create any conflict of interest.
As a matter of professional responsibility law, representation adverse to the Federal Trade Commission in a district-court enforcement action or administrative proceeding does not implicate Rule 1.7 (current client conflicts) or Rule 1.9 (former client conflicts), because the FTC is a governmental entity and is not a current or former client of the firm. The FTC's status as a party adverse to Cascade in this litigation does not give rise to any duty of loyalty or confidentiality running from Calderwood & Harkness to the Commission.
Conclusion: No conflict identified. No further action required.
C. Pinnacle Market Group Inc. (Co-Defendant, Not Client)
No current or prior representation of Pinnacle Market Group Inc. was identified in the firm's conflicts database. No current or prior representation of any of Pinnacle's officers — including co-founders Rajiv Chandravar and Lena Kowalski, CFO Thomas Breck, and General Counsel Anita Suresh — was identified. No representation adverse to Pinnacle or any of its officers was identified.
Pinnacle is a co-defendant in both the district court and administrative proceedings but is not a proposed client of Calderwood & Harkness LLP. The firm will not be providing legal services to Pinnacle in this or any related matter. Pinnacle is separately represented by Whitfield, Greer & Tanaka LLP.
The interests of Cascade and Pinnacle are presently aligned in this litigation: both parties seek to defeat the FTC's challenge and consummate the merger transaction. Calderwood & Harkness anticipates that defense strategy and certain discovery efforts will be coordinated with Pinnacle's counsel through a joint defense and common interest agreement, as discussed in Section VI below. This coordination does not create an attorney-client relationship between Calderwood & Harkness and Pinnacle.
The Committee notes the following potential future conflict consideration: if the merger is consummated, Pinnacle will become a wholly owned subsidiary of Cascade (the client), and the firm's duties to Cascade as the parent entity would naturally extend to cover the subsidiary in a manner consistent with the engagement. However, if the merger fails or is abandoned, Pinnacle would remain a separate and independent entity, and no attorney-client relationship between Calderwood & Harkness and Pinnacle would exist or have existed. In the event of merger failure, there exists a possibility that the interests of Cascade and Pinnacle could diverge — for example, in connection with disputes over the reverse termination fee or the company termination fee under the Merger Agreement. Any such divergence would not create a conflict for Calderwood & Harkness, because the firm will not have represented Pinnacle and will owe no duties of loyalty or confidentiality to Pinnacle. Nevertheless, the conditions set forth in Section VI of this memorandum address this scenario and require that the conflicts analysis be revisited if circumstances change materially.
Conclusion: No conflict with respect to Pinnacle Market Group Inc.
D. Whitfield, Greer & Tanaka LLP (Co-Defendant's Counsel)
No current or prior adverse representation against Whitfield, Greer & Tanaka LLP ("WGT") or any of its individual partners or associates was identified in the firm's conflicts database. No current joint representations, co-counsel arrangements, or other professional relationships with WGT were identified.
The proposed engagement will involve coordination with WGT under a joint defense and common interest agreement, pursuant to which the parties' respective counsel will share certain privileged communications and work product for the purpose of mounting a coordinated defense of the FTC's challenge. Such coordination is standard practice in merger defense litigation and does not create a conflict of interest, an attorney-client relationship between Calderwood & Harkness and Pinnacle, or any other professional obligation beyond those expressly set forth in the joint defense agreement itself.
Conclusion: No conflict with Whitfield, Greer & Tanaka LLP. No further action required.
E. Vertex Commerce Inc.
No current or prior representation of Vertex Commerce Inc. was identified in the firm's conflicts database. No current adverse representation against Vertex Commerce Inc. was identified.
Vertex Commerce is identified in the FTC's complaint as the largest independent online marketplace platform in the United States, holding approximately 35.7% of gross merchandise value in the alleged relevant market. Vertex is likely to be a significant third-party subpoena recipient and potential fact witness in the proceedings. The firm's defense strategy may require issuing document subpoenas and deposition subpoenas to Vertex Commerce personnel, and it is possible that Vertex's competitive interests may not be aligned with Cascade's in this litigation.
Because Calderwood & Harkness has no current or prior relationship with Vertex Commerce, the firm is free to issue third-party discovery to Vertex on behalf of Cascade and to take positions adverse to Vertex's interests as necessary in the course of the litigation.
Conclusion: No conflict identified. The firm is cleared to pursue third-party discovery from Vertex Commerce Inc.
F. Nomad Shops LLC
No current or prior representation of Nomad Shops LLC was identified in the firm's conflicts database. No current adverse representation against Nomad Shops LLC was identified.
Nomad Shops is identified in the FTC's complaint as a marketplace competitor holding approximately 14.6% of gross merchandise value in the alleged relevant market. Like Vertex Commerce, Nomad Shops is likely to be a third-party subpoena recipient and potential fact witness.
Conclusion: No conflict identified. The firm is cleared to pursue third-party discovery from Nomad Shops LLC.
G. Independent Online Sellers Alliance (IOSA)
No current or prior representation of the Independent Online Sellers Alliance was identified in the firm's conflicts database. No current adverse representation against IOSA was identified.
IOSA has filed a motion to intervene in the district court proceedings in support of the FTC's position, asserting that its members — independent third-party sellers operating on online marketplace platforms — have a direct interest in the outcome of the litigation. Calderwood & Harkness anticipates opposing the intervention motion on behalf of Cascade and, if intervention is granted, taking positions adverse to IOSA throughout the proceedings.
Conclusion: No conflict identified. The firm is cleared to oppose IOSA's intervention motion and to take positions adverse to IOSA in the litigation.
H. Galloway & Peck LLP (IOSA's Counsel)
No current co-counsel relationships, joint defense arrangements, or adverse representations involving Galloway & Peck LLP or its lead partner Martina Galloway were identified in the firm's conflicts database. No prior professional relationships of any kind between Calderwood & Harkness and Galloway & Peck were identified.
Conclusion: No conflict identified. No further action required.
I. Transaction-Related Parties
The following transaction-related parties were searched, with results as indicated:
Harmon Ridgeway & Strauss LLP ("HRS"). No conflict identified. HRS is Cascade's transaction counsel and has represented Cascade in connection with the negotiation and execution of the Merger Agreement, the HSR filing, and related corporate matters. HRS will serve in a complementary, non-overlapping role with Calderwood & Harkness: HRS will continue to advise Cascade on transactional matters (including the Merger Agreement, financing commitments, and regulatory compliance), while Calderwood & Harkness will lead the antitrust litigation defense. HRS may provide transaction-related support to Calderwood & Harkness's litigation team, including access to deal documents, due diligence materials, and background on the strategic rationale for the acquisition. There is no adversity between Calderwood & Harkness and HRS, and the two firms' respective representations of Cascade are aligned and complementary.
Mercer Hollis & Co. No current or prior representation of Mercer Hollis & Co. or any of its personnel (including Graham Mercer IV and Yuki Tanabe) was identified in the firm's conflicts database. Mercer Hollis served as Cascade's financial advisor and rendered a fairness opinion in connection with the transaction. Mercer Hollis personnel may be fact witnesses in the FTC proceedings regarding valuation and financial analysis. No conflict identified.
Ridgeline Capital Partners. No current or prior representation of Ridgeline Capital Partners or Nadine Vasquez was identified. Ridgeline served as Pinnacle's financial advisor and rendered a fairness opinion to Pinnacle's board. No conflict identified.
Whitmore National Bank, N.A. The conflicts database search identified one prior representation involving Whitmore National Bank, N.A.: Matter No. 1038-00001, in which the firm's Banking & Finance Practice Group represented Whitmore National Bank as lead arranger and administrative agent in connection with a $1.1 billion syndicated credit facility for Meridian Energy Holdings Corp., an energy-sector client. That matter was opened in February 2023 and closed in July 2023 upon successful closing of the credit facility. The lead partner on the Whitmore matter was Franklin Yi (Banking & Finance Practice Group), and the engagement was limited in scope to the syndicated lending transaction.
That matter is closed, and the current engagement does not involve any adverse position to Whitmore National Bank. To the contrary, Whitmore is the acquisition financing lead arranger for the Cascade-Pinnacle transaction and has committed to provide $2.8 billion in term loan B financing and a $500 million revolving credit facility to fund the merger consideration. Whitmore's interests are aligned with Cascade's in consummating the transaction. Calderwood & Harkness's defense of Cascade in the FTC proceedings supports, rather than undermines, Whitmore's interests as the financing provider.
No confidential information obtained during the prior Whitmore representation is relevant to or could be used in connection with the current engagement. The prior matter (an energy-sector syndicated credit facility) is factually and legally unrelated to the current antitrust litigation involving online marketplace platforms.
Conclusion: No conflict under Rule 1.7 (no current-client conflict, as the Whitmore matter is closed) or Rule 1.9 (the matters are not substantially related, and no adverse position to Whitmore exists in this engagement).
Aldrich & Warwick CPAs LLP. No current or prior representation identified. No conflict.
Kessler Fong Accounting Group LLP. No current or prior representation identified. No conflict.
Arundel Proxy Advisors LLC. No current or prior representation identified. No conflict.
Veltrano Transfer Services Inc. No current or prior representation identified. No conflict.
Pendleton Crier & Associates. No current or prior representation of Pendleton Crier & Associates or Douglas Crier identified. No conflict.
J. Proposed Expert — Brindoval Analytics LLC
No current or prior representation of Brindoval Analytics LLC, Dr. Priya Ramanathan, or Dr. Lucas Engström was identified in the firm's conflicts database. None of these individuals or entities appear as clients, adverse parties, or related parties in any matter in the firm's records.
Brindoval Analytics is being retained by Cascade as an expert economic and antitrust consultant, with Dr. Ramanathan designated as the anticipated testifying expert on market definition, competitive effects, and merger efficiencies. The engagement of Brindoval will be formalized through a separate expert retention agreement between Cascade and Brindoval Analytics, to be administered through Calderwood & Harkness. Brindoval is not a client of the firm; it is a consulting expert retained in connection with the firm's representation of Cascade.
Conclusion: No conflict identified.
K. FTC's Expert — Thornfield Research Group
No current or prior representation of Thornfield Research Group or Dr. Wallace Keenan was identified in the firm's conflicts database. Thornfield and Dr. Keenan do not appear in the database as clients, adverse parties, or related parties in any matter.
Dr. Keenan is the FTC's designated testifying expert and may submit expert reports and testify at the evidentiary hearing in opposition to Cascade's position. Calderwood & Harkness's engagement team may need to challenge Dr. Keenan's opinions, cross-examine Dr. Keenan at the evidentiary hearing, and file Daubert or analogous motions with respect to his testimony. The absence of any prior relationship with Thornfield or Dr. Keenan confirms that no conflict exists.
Conclusion: No conflict identified.
L. Other Competitors (Brevity Social Commerce Inc., Trove Marketplace Inc.)
No current or prior representation of Brevity Social Commerce Inc. or Trove Marketplace Inc. was identified in the firm's conflicts database. Neither entity appears as a client, adverse party, or related party in any matter in the firm's records. Both entities are identified in the FTC's complaint as recent entrants into the online marketplace platform market and may be third-party discovery targets or fact witnesses.
Conclusion: No conflict identified with respect to either entity.
V. Ethical Rules Analysis
A. Rule 1.7 — Current Client Conflicts
Rule 1.7 of the Model Rules of Professional Conduct (and the parallel provisions of the Washington Rules of Professional Conduct and Delaware Lawyers' Rules of Professional Conduct) prohibits a lawyer from representing a client if the representation involves a concurrent conflict of interest — that is, if the representation of one client will be directly adverse to another client, or if there is a significant risk that the representation will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer.
The Conflicts Review Committee has examined whether any current client of Calderwood & Harkness LLP is a party to this litigation, is adverse to Cascade Retail Holdings Inc. in this matter, or has interests that would be materially adverse to Cascade's interests in this engagement. No such current client has been identified. Specifically:
• No current client of the firm is a plaintiff, defendant, intervenor, or other party in FTC v. Cascade Retail Holdings Inc. et al. or in FTC Docket No. 9438.
• No current client of the firm is a competitor of Cascade in the alleged relevant market, as defined by the FTC, whose interests would be materially adversely affected by Calderwood & Harkness's defense of the merger.
• The prior representation of Whitmore National Bank, N.A. (1038-00001) is closed and does not constitute a current-client relationship. Moreover, Whitmore's interests as the acquisition financing lead arranger are aligned with Cascade's interest in consummating the transaction, so no adversity exists even if one were to treat the relationship as ongoing.
Conclusion: No Rule 1.7 conflict identified.
B. Rule 1.9 — Former Client Conflicts
Rule 1.9 provides that a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed consent, confirmed in writing.
The only potentially relevant prior representation identified in this review is the firm's closed engagement for Whitmore National Bank, N.A. (Matter No. 1038-00001), involving a syndicated credit facility for an energy-sector client. The Committee's analysis under Rule 1.9 is as follows:
1. Substantial Relatedness. The prior Whitmore matter involved the structuring, negotiation, and documentation of a $1.1 billion syndicated credit facility for Meridian Energy Holdings Corp. The subject matter, industry, and legal issues in that engagement (energy-sector corporate lending, credit agreement drafting, intercreditor arrangements) are wholly unrelated to the current matter (antitrust defense of a technology-sector merger). There is no factual or legal overlap between the two matters. The matters are not substantially related within the meaning of Rule 1.9.
2. Material Adversity. Even if the matters were substantially related (which they are not), Whitmore's interests are not materially adverse to Cascade's interests in this engagement. Whitmore, as the lead arranger for the acquisition financing, has a direct financial interest in the consummation of the merger. The firm's defense of Cascade in the FTC proceedings supports Whitmore's interests. There is no adversity, material or otherwise.
3. Confidential Information. No confidential information obtained during the Whitmore representation could be used to Whitmore's disadvantage in this engagement. The prior engagement involved no antitrust-related information, no marketplace-platform-related information, and no information regarding either Cascade or Pinnacle.
Conclusion: No Rule 1.9 conflict identified. Informed consent from Whitmore National Bank is not required.
C. Rule 1.10 — Imputed Disqualification
Rule 1.10 provides that, while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9, unless the prohibition is based on a personal interest of the disqualified lawyer and does not present a significant risk of materially limiting the representation.
The Committee has reviewed the rosters of the proposed engagement team (led by Howard Bellamy and Elaine Forsythe) and has confirmed that no attorney currently associated with Calderwood & Harkness LLP has a personal conflict of interest that would be imputed to the firm under Rule 1.10. Specifically:
• No attorney on the proposed engagement team has previously represented any party adverse to Cascade in a related or substantially related matter.
• No attorney on the proposed engagement team has a personal or financial interest in the outcome of this litigation that would materially limit the representation.
• No former attorney of Calderwood & Harkness LLP who previously represented any adverse party in a related matter has been identified through the firm's lateral-hire conflicts screening process or through supplemental inquiry.
Conclusion: No Rule 1.10 imputed disqualification issue identified.
D. Rule 1.13 — Organization as Client
Rule 1.13 provides that a lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents.
The client in this engagement is Cascade Retail Holdings Inc., the corporate entity. The firm's duties of loyalty and confidentiality run to the corporation, not to any individual officer, director, or employee of the corporation in their personal capacities. All communications relating to this engagement will be through the authorized representative designated by the corporation, Jerome Weston, General Counsel and Corporate Secretary, or such other persons as Mr. Weston may designate from time to time.
Pinnacle Market Group Inc. is not a client of Calderwood & Harkness LLP, notwithstanding its status as a co-defendant in this action. The firm owes no duties to Pinnacle under Rule 1.13 or otherwise, other than those limited obligations that may arise under the terms of the joint defense and common interest agreement between the parties' respective counsel, as discussed in Section VI below. The joint defense agreement will expressly acknowledge that Calderwood & Harkness does not represent Pinnacle and that no attorney-client relationship exists or is created between Calderwood & Harkness and Pinnacle.
Conclusion: The organizational-client analysis under Rule 1.13 is straightforward. No issues identified.
VI. Conditions and Limitations
The clearance granted herein is subject to the following conditions and limitations, which should be observed by the engagement team throughout the duration of the representation:
1. No Representation of Pinnacle Market Group Inc. Calderwood & Harkness LLP is not and will not serve as counsel to Pinnacle Market Group Inc. in this matter, any related matter, or any other matter. Pinnacle is separately and independently represented by Whitfield, Greer & Tanaka LLP. The engagement letter with Cascade must clearly identify Cascade Retail Holdings Inc. as the sole client and must disclaim any attorney-client relationship with Pinnacle. Any joint defense or common interest agreement with Pinnacle's counsel must include an express acknowledgment that Calderwood & Harkness does not represent Pinnacle and that no attorney-client relationship between Calderwood & Harkness and Pinnacle is created, implied, or intended by the agreement or by the parties' coordination in the defense of this action.
2. Joint Defense and Common Interest Agreement. A joint defense and common interest agreement between Cascade (through Calderwood & Harkness) and Pinnacle (through Whitfield, Greer & Tanaka LLP) should be executed promptly. The anticipated execution date is July 1, 2025. The agreement should include, at a minimum, the following provisions:
(a) A statement of the common legal interest shared by the parties;