1038-00006 · Calderwood & Harkness LLP · Closing/Court Filings

motion-dissolve-tro.docx DOCUMENT Finance & Banking

9 / 79 ← → ✕

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CASCADE RETAIL HOLDINGS INC., a Delaware corporation,

Plaintiff,

PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,

Defendants.

C.A. No. 2025-0198-MTZ

PLAINTIFF'S MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER UPON ENTRY OF CONSENT ORDER

OF COUNSEL:

CALDERWOOD & HARKNESS LLP Bernard Crawford (Del. Bar No. 5218) Renata Vasquez (Del. Bar No. 6034) James Underwood (Del. Bar No. 5877) Devon Archer (Del. Bar No. 6291) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101

Counsel for Plaintiff Cascade Retail Holdings Inc.

Dated: April 14, 2025

I. INTRODUCTION

Plaintiff Cascade Retail Holdings Inc. ("CRH" or "Plaintiff"), by and through its undersigned counsel Calderwood & Harkness LLP, respectfully moves this Court pursuant to Court of Chancery Rules 65(b) and 65(d) for an Order dissolving the Temporary Restraining Order (the "TRO") entered on March 7, 2025 in this action and discharging the injunction bond posted in connection therewith.

On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's ex parte application for a TRO, restraining all eight individual Defendants — Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Individual Defendants") — from commencing employment in merchandising roles at Defendant Verdana Commerce Group, Inc. ("Verdana") for a period of fourteen (14) days. That initial restraint was thereafter extended by the Consent Interim Order entered March 21, 2025, which maintained the status quo — including the TRO restraints — during the settlement documentation period that ran from March 24 through April 11, 2025.

Concurrent with the filing of this Motion, the parties are today filing a Stipulation of Settlement and Proposed Consent Order (the "Consent Order") that incorporates the terms of the fully executed Standstill and Settlement Agreement dated April 14, 2025 (the "Settlement Agreement"). The Consent Order embodies the comprehensive resolution of all claims in this action, including agreed modified restrictive covenant terms tailored to the individual circumstances of each Defendant, data return and certified destruction obligations for the approximately 14,327 exfiltrated files, compliance monitoring provisions administered by a jointly appointed independent compliance monitor, and monetary settlement terms that include both a lump-sum payment and litigation cost reimbursement from Verdana to CRH, as well as forfeiture of aggregate equity by the Individual Defendants.

Because the Consent Order, upon entry by this Court, will supersede and replace in their entirety the restraints imposed by the TRO with the parties' negotiated modified covenant terms and additional protections, the TRO is no longer necessary and should be dissolved. CRH further seeks the discharge and release of the $2,500,000 injunction bond (Bond No. BSC-2025-TRO-04419) posted through Broadview Surety Corp. in connection with the TRO, as the bond's purpose will have been fully satisfied upon dissolution of the TRO and no claim has been or will be made against it by any party. This Motion is made with the consent of all parties, as more fully set forth in Section V below and as evidenced by the consent endorsement attached hereto as Exhibit 1.

II. PROCEDURAL BACKGROUND

A. Filing of the Verified Complaint and TRO Motion

On March 5, 2025, CRH filed a Verified Complaint (Dkt. No. 1) and a Motion for Temporary Restraining Order and Preliminary Injunction (Dkt. No. 2) in this Court, together with supporting declarations, exhibits, and a memorandum of law. The Verified Complaint asserted five counts arising from what CRH alleged was a coordinated scheme by the Individual Defendants and Verdana to misappropriate CRH's confidential business information and trade secrets in connection with the Individual Defendants' near-simultaneous departures from CRH:

Count I — Breach of Restrictive Covenant (Against All Individual Defendants). CRH alleged that each of the eight Individual Defendants had entered into Executive Employment Agreements containing restrictive covenants — including non-competition, non-solicitation of employees, and non-solicitation of vendors provisions — and that each Individual Defendant breached those covenants by accepting employment with Verdana, a direct competitor of CRH in the national retail merchandising sector, within the applicable restricted period.

Count II — Breach of Confidentiality Obligations (Against All Individual Defendants). CRH alleged that each Individual Defendant breached the confidentiality and proprietary information provisions of their respective Executive Employment Agreements by downloading, copying, transmitting, and/or retaining CRH confidential and proprietary information in connection with their departures, including but not limited to materials related to CRH's proprietary five-year category expansion roadmap internally known as "Project Ridgeline."

Count III — Misappropriation of Trade Secrets Under the Delaware Uniform Trade Secrets Act ("DUTSA"), 6 Del. C. § 2001 et seq. (Against All Individual Defendants and Verdana). CRH alleged that the Individual Defendants misappropriated CRH trade secrets by the unauthorized acquisition, disclosure, and use of proprietary information — including Project Ridgeline strategic plans, vendor pricing matrices, supply chain analytics, and customer segmentation data — and that Verdana acquired, or was positioned to acquire, the trade secrets with knowledge that they had been improperly obtained.

Count IV — Tortious Interference with Contractual Relations (Against Verdana). CRH alleged that Verdana, with knowledge of the Individual Defendants' restrictive covenants and confidentiality obligations, intentionally induced and procured the Individual Defendants' breaches of those contractual obligations by offering them employment, and that such interference was accomplished through improper means, including the facilitation of the exfiltration of CRH's confidential information.

Count V — Civil Conspiracy (Against All Defendants). CRH alleged that the Individual Defendants and Verdana conspired to accomplish the unlawful objectives described in Counts I through IV, and that the coordinated nature and near-simultaneous timing of the Individual Defendants' resignations — all on February 7, 2025 — together with the pattern of data exfiltration identified by CRH's forensic investigation, evidenced a concerted plan to transfer CRH's competitive assets to Verdana.

The factual predicate for these claims was described in detail in the Verified Complaint and supporting materials. In summary, CRH alleged that on February 7, 2025, all eight Individual Defendants tendered their resignations from CRH within a four-hour window. Each of the Individual Defendants held a senior merchandising position at CRH — ranging from Senior Vice President of Merchandising (Rathore) to Director-level positions in category management, vendor relations, and strategic planning. A forensic investigation conducted by Aurelian Investigations Group Inc. and its principal investigator, Sandra Fielding, revealed that in the two weeks preceding the coordinated resignations, the Individual Defendants had collectively downloaded or transferred approximately 14,327 files comprising approximately 2.8 gigabytes of data from CRH's internal systems, including its secured Aldermere Systems environment and proprietary analytics platform. The exfiltrated materials included, among other things, the complete Project Ridgeline five-year category expansion roadmap, vendor pricing and margin analyses, customer segmentation models, supply chain optimization reports, and internal competitive intelligence assessments.

B. Entry of the TRO

On March 7, 2025, Vice Chancellor Margaret T. Zhao held a hearing on CRH's ex parte application for a Temporary Restraining Order. After considering the Verified Complaint, the supporting declarations and exhibits, and the arguments of CRH's counsel, the Court granted the TRO application and entered the Temporary Restraining Order (Dkt. No. 8). The TRO restrained all eight Individual Defendants from commencing employment in any merchandising role at Verdana for a period of fourteen (14) days, through and including March 21, 2025.

As a condition of the entry of the TRO, and consistent with Court of Chancery Rule 65(c), CRH was required to post an injunction bond in the amount of $2,500,000 to secure the Individual Defendants and Verdana against any damages that might be sustained by reason of the TRO in the event the Court ultimately determined that the TRO had been wrongfully issued. CRH posted the required bond on March 7, 2025 through Broadview Surety Corp., a licensed surety company, under Bond No. BSC-2025-TRO-04419, issued from Broadview's office at 175 Water Street, Suite 2400, New York, NY 10038. A copy of the bond was filed with the Court on March 7, 2025 (Dkt. No. 9).

C. Preliminary Injunction Proceedings and Consent Interim Order

Following entry of the TRO, the Court scheduled a hearing on CRH's application for a preliminary injunction for March 21, 2025 (Dkt. No. 10).

On March 15, 2025, the Individual Defendants, through their counsel, Catherine Nygaard of Whitfield, Nygaard & Doyle LLP, filed an opposition to CRH's application for a preliminary injunction (Dkt. No. 14). In their opposition, the Individual Defendants argued, among other things, that the restrictive covenants at issue were overbroad in geographic scope and temporal duration, that they imposed unreasonable restraints on the Individual Defendants' ability to pursue their livelihoods, and that CRH could not demonstrate irreparable harm sufficient to justify the extraordinary remedy of a preliminary injunction under the standard articulated by this Court in SI Management L.P. v. Wininger, 707 A.2d 37 (Del. 1998), and its progeny. Verdana, through its counsel, Gavin Blackhall of Blackhall & Soren LLP, filed a separate opposition brief on the same date (Dkt. No. 15), contesting the tortious interference and civil conspiracy claims and arguing that Verdana had independently recruited the Individual Defendants without knowledge of the specific scope of their restrictive covenants.

On March 17, 2025, CRH filed its Reply Memorandum in Further Support of Plaintiff's Application for a Preliminary Injunction (Dkt. No. 18), together with the Supplemental Declaration of Sandra Fielding of Aurelian Investigations Group Inc. (Dkt. No. 19), detailing additional findings from the ongoing forensic investigation, and the Expert Report and Declaration of Dr. Franklin Oberg of Veltrano Consulting Group LLC (Dkt. No. 20), opining on the competitive harm to CRH from the misappropriation of Project Ridgeline materials.

On March 18, 2025, at the suggestion of the Court and with the agreement of all parties, the parties participated in a mediation session before the Honorable Philip Ashford (Ret.) of Meridian ADR Services LLC (Ref. No. Meridian-2025-0318-CRH). The mediation session was conducted in person in Wilmington, Delaware and continued for approximately eleven hours. While the parties did not reach a final settlement during the mediation session itself, Mediator Ashford's efforts significantly narrowed the outstanding issues and established a framework for continued negotiations.

On March 20, 2025, following two additional days of intensive telephonic negotiations among all counsel, the parties reached agreement on the essential terms of a settlement framework that would resolve all claims in this action (the "Settlement Framework"). The Settlement Framework addressed modified restrictive covenant terms, data return and destruction obligations, compliance monitoring, monetary consideration, and the disposition of the pending preliminary injunction application and the TRO.

On March 21, 2025 — the date of the scheduled preliminary injunction hearing — all parties filed a Joint Stipulation to Adjourn Preliminary Injunction Hearing and for Entry of Consent Interim Order (Dkt. No. 22). The Court entered the Consent Interim Order (Dkt. No. 23) on the same date, which provided that: (a) the preliminary injunction hearing was adjourned without date, subject to reinstatement by any party upon seven (7) business days' written notice in the event the settlement negotiations failed; (b) the restraints imposed by the TRO were extended and maintained during the settlement documentation period, which was to run from March 24 through April 11, 2025; and (c) the parties were directed to file a joint status report on or before April 14, 2025 advising the Court of the status of settlement negotiations.

D. Settlement Documentation and the Consent Order

From March 24 through April 11, 2025, the parties — through their respective counsel, Calderwood & Harkness LLP (for CRH), Whitfield, Nygaard & Doyle LLP (for the Individual Defendants), and Blackhall & Soren LLP (for Verdana) — negotiated and finalized the Standstill and Settlement Agreement (the "Settlement Agreement"), which embodies the comprehensive terms for the resolution of all claims in this action. The Settlement Agreement was executed by all parties on April 14, 2025.

The execution version of the Settlement Agreement, together with the Stipulation of Settlement and Proposed Consent Order, is being filed concurrently with this Motion on April 14, 2025 (Dkt. Nos. [to be assigned]). The Consent Order, upon entry by the Court, will: (a) incorporate by reference the modified restrictive covenant terms set forth in Exhibit A to the Settlement Agreement; (b) require data return and certified destruction of all exfiltrated CRH information in accordance with the protocols set forth in Exhibit B to the Settlement Agreement; (c) establish compliance monitoring through the jointly appointed independent compliance monitor, Aldwyn Compliance Solutions LLC of Philadelphia, Pennsylvania; (d) provide for the monetary settlement payments described in the Settlement Agreement; and (e) retain this Court's jurisdiction for purposes of enforcement, including contempt proceedings, for the duration of the modified restrictive covenant periods.

III. THE CONSENT ORDER SUPERSEDES THE TRO

A. The Modified Restrictive Covenant Terms Replace the TRO Restraints

The TRO entered on March 7, 2025 imposed a blanket prohibition on all eight Individual Defendants from commencing employment in any merchandising role at Verdana. While this blanket restraint was appropriate and necessary at the time it was entered — when CRH had just discovered the coordinated departures and the scope of the data exfiltration was still being assessed — the Consent Order now replaces this undifferentiated restraint with tailored, individually negotiated modified restrictive covenant terms that reflect the parties' comprehensive assessment of the competitive risks at issue and the equities of the situation.

The modified restrictive covenant terms incorporated in the Consent Order, and set forth in detail in Exhibit A to the Settlement Agreement, are as follows:

(1) Priya Rathore — Modified Non-Competition. Rathore, who served as CRH's Senior Vice President of Merchandising and had the broadest access to Project Ridgeline and other trade secret materials, has agreed to a twelve (12)-month non-competition period, reduced from the original eighteen (18)-month restrictive period set forth in her Executive Employment Agreement dated June 15, 2021. The modified non-compete runs from February 7, 2025 through February 6, 2026, and is limited in scope to three specific product categories in which Rathore had primary strategic responsibility at CRH: (i) home goods, (ii) seasonal décor, and (iii) private-label apparel. Rathore is permitted to commence employment at Verdana in any role that does not involve merchandising activities within these three product categories.

(2) Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson — Modified Non-Competition. Each of the remaining seven Individual Defendants has agreed to a nine (9)-month non-competition period, reduced from the original twelve (12)- or eighteen (18)-month restrictive periods set forth in their respective Executive Employment Agreements. The modified non-competes run from February 7, 2025 through November 6, 2025, and are limited in scope to the same three specific product categories: (i) home goods, (ii) seasonal décor, and (iii) private-label apparel. Each of these Defendants is permitted to commence employment at Verdana in any role that does not involve merchandising activities within these three product categories.

(3) All Eight Individual Defendants — Modified Non-Solicitation of CRH Employees. All eight Individual Defendants have agreed to an eighteen (18)-month non-solicitation of CRH employees, running from February 7, 2025 through August 6, 2026. This provision prohibits each Individual Defendant from directly or indirectly soliciting, recruiting, or inducing any employee of CRH to leave CRH's employment or to accept employment with Verdana or any other competitor of CRH.

(4) All Eight Individual Defendants — Modified Non-Solicitation of CRH Vendors. All eight Individual Defendants have agreed to a twelve (12)-month non-solicitation of CRH's top fifty (50) vendors (as measured by aggregate spend during the twelve-month period ending January 31, 2025), running from February 7, 2025 through February 6, 2026. A confidential list of the covered vendors is set forth in Schedule 1 to Exhibit A of the Settlement Agreement.

These modified terms are specifically set forth in Exhibit A to the Settlement Agreement, which is incorporated by reference into the Consent Order at Paragraph 3 thereof. The modified terms were the product of extensive negotiation among all parties and their counsel over a period of approximately three weeks, and they reflect carefully calibrated compromises on issues of duration, geographic scope, and activity scope that balance CRH's legitimate interests in protecting its trade secrets and competitive position against the Individual Defendants' interests in pursuing their professional careers.

Because the Consent Order provides comprehensive, Court-enforceable restrictive covenant protections that will remain in effect through the agreed durations — and that are tailored to the specific competitive risks presented by each Individual Defendant's role and access level at CRH — the TRO's blanket restraints are no longer necessary and are fully superseded by the Consent Order.

B. The Consent Order Provides Additional Protections Beyond the TRO

In addition to replacing the TRO's blanket restraints with tailored modified covenant terms, the Consent Order incorporates several categories of protections that go substantially beyond the scope of the TRO. These additional protections further demonstrate that the TRO has been rendered unnecessary by the comprehensive relief embodied in the Consent Order.

(1) Data Return and Certified Destruction. The Consent Order requires that all exfiltrated CRH data — including the approximately 14,327 files (~2.8 GB) identified by Aurelian Investigations Group Inc. during its forensic investigation, as well as any additional CRH data identified through subsequent analysis — be returned to CRH or certified as destroyed within ten (10) business days of the execution of the Settlement Agreement (i.e., by April 28, 2025). The data destruction protocols, which are set forth in detail in Exhibit B to the Settlement Agreement, require each Individual Defendant and Verdana to: (a) return to CRH all physical media containing CRH information; (b) permanently delete all electronic copies of CRH information from all personal devices, cloud storage accounts, and other electronic repositories; and (c) execute a sworn certification of compliance with the data return and destruction obligations. In addition, Verdana has agreed to retain Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, to conduct an independent forensic audit of the devices and systems of each Individual Defendant and of Verdana's corporate systems to verify compliance with the data destruction requirements. The forensic audit is to be completed within thirty (30) days of the execution of the Settlement Agreement, and the costs thereof — capped at $175,000 — are to be borne entirely by Verdana. A copy of Pinnacle Forensics LLC's audit report will be provided to CRH and filed under seal with this Court.

(2) Compliance Monitoring. The parties have jointly appointed Aldwyn Compliance Solutions LLC, a compliance monitoring firm headquartered in Philadelphia, Pennsylvania, as the independent compliance monitor for a twelve (12)-month term commencing on the date of entry of the Consent Order. Aldwyn Compliance Solutions LLC will be responsible for monitoring each Individual Defendant's compliance with the modified restrictive covenant terms, including through periodic reviews of the Individual Defendants' employment activities, vendor interactions, and employee solicitation activities. The compliance monitor will submit quarterly reports to all parties and to this Court. The estimated total cost of the compliance monitoring engagement is $360,000, which will be allocated sixty percent (60%) to Verdana ($216,000) and forty percent (40%) to CRH ($144,000), reflecting the parties' negotiated cost-sharing arrangement.

(3) Retained Jurisdiction. The Consent Order expressly retains this Court's jurisdiction for the purpose of enforcing its terms, including the modified restrictive covenants, the data destruction obligations, and the compliance monitoring provisions. The retained jurisdiction provision authorizes the Court to entertain motions for contempt, specific performance, or other equitable relief in the event of any violation of the Consent Order, without the need for the filing of a new action. This retained jurisdiction will continue for the duration of the longest-running modified restrictive covenant period — i.e., through August 6, 2026 (the expiration date of the eighteen-month non-solicitation of employees provision).

(4) Monetary Settlement. The Settlement Agreement provides for substantial monetary consideration flowing to CRH. Verdana is obligated to pay CRH a lump-sum settlement payment of $8,750,000 within thirty (30) days of the execution of the Settlement Agreement (i.e., by May 14, 2025). Verdana is also obligated to reimburse CRH for $425,000 in litigation costs incurred in connection with this action, payable on the same schedule. In addition, the eight Individual Defendants have agreed to forfeit aggregate equity interests in CRH valued at $849,500, consisting of $362,500 in unvested restricted stock units forfeited by Priya Rathore and $487,000 in aggregate unvested restricted stock units and stock options forfeited by the remaining seven Individual Defendants. The forfeiture of these equity interests is in addition to the cancellation of all unvested equity awards that occurred automatically upon the Individual Defendants' resignations pursuant to the terms of CRH's equity incentive plan.

Taken together, these additional protections represent a comprehensive resolution that addresses not only the immediate competitive threat that gave rise to the TRO application, but also the broader concerns regarding trade secret protection, data security, and ongoing compliance that were at the heart of CRH's claims in this action. The scope of the relief embodied in the Consent Order significantly exceeds what CRH could have obtained through continued litigation of its preliminary injunction application alone.

C. Continued Maintenance of the TRO Is Unnecessary

With the Consent Order in place, continued maintenance of the TRO would create duplicative and potentially conflicting restraints on the Individual Defendants. The TRO imposes a blanket prohibition on employment in merchandising roles at Verdana, whereas the Consent Order imposes tailored restrictions limited to three specific product categories while permitting employment at Verdana in other capacities. To the extent the TRO's broader restraints remain in effect alongside the Consent Order's more tailored terms, there is a risk of confusion regarding the precise scope of each Individual Defendant's obligations, which could impede the efficient administration of the parties' settlement.

Moreover, the Consent Order's modified covenant terms are the product of arm's-length negotiation among all parties and their respective counsel — three sophisticated law firms representing a public corporation, eight individual executives, and a major competitor — and represent a carefully tailored resolution that balances CRH's legitimate interests in protecting its trade secrets and competitive position against the Individual Defendants' interests in pursuing their professional careers and earning their livelihoods. The parties' mutual intent, as expressed in Section 11.2 of the Settlement Agreement, is that the Consent Order shall supersede and replace in their entirety the restraints imposed by the TRO and the Consent Interim Order.

Dissolution of the TRO upon entry of the Consent Order is therefore consistent with judicial economy, the parties' expressed intent, and the orderly administration of the settlement that this Court's retained jurisdiction is designed to protect.

IV. DISCHARGE OF THE INJUNCTION BOND

In connection with the TRO entered on March 7, 2025, and as required by Court of Chancery Rule 65(c), CRH posted an injunction bond in the amount of $2,500,000 through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419, issued from Broadview's office at 175 Water Street, Suite 2400, New York, NY 10038). The bond was filed with the Court on March 7, 2025 (Dkt. No. 9) and has remained in full force and effect throughout the pendency of the TRO and the Consent Interim Order.

The purpose of the injunction bond was to provide security to the Individual Defendants and Verdana against any damages they might sustain by reason of the TRO in the event it was ultimately determined that the TRO had been wrongfully issued. Upon the dissolution of the TRO, the purpose of the bond will have been fully satisfied and no further security will be required. The Consent Order provides the framework for any enforcement going forward, including its own provisions for remedies in the event of breach, and no separate bond or security is contemplated or required under the terms of the Settlement Agreement or the Consent Order.

No party has made any claim against the bond during the period of its effectiveness. The Individual Defendants and Verdana have expressly consented to the discharge and release of Injunction Bond No. BSC-2025-TRO-04419 as part of the Settlement Agreement. Specifically, Section 12.1 of the Settlement Agreement provides that "upon entry of the Order dissolving the TRO, all parties consent to the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, and no party shall assert any claim against the bond or against the surety."

CRH respectfully requests that, upon entry of the Order dissolving the TRO, this Court authorize the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, and direct Broadview Surety Corp. to release CRH from any further obligations arising under the bond.

V. CONSENT OF THE PARTIES

This Motion is made with the full consent of all parties to this action. Undersigned counsel for CRH has conferred with counsel for all Defendants and has confirmed that no party opposes the relief sought herein.

Specifically, Catherine Nygaard, Esquire, of Whitfield, Nygaard & Doyle LLP, 1000 North Market Street, Suite 1500, Wilmington, Delaware 19801, counsel of record for all eight Individual Defendants (Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson), has confirmed that the Individual Defendants do not oppose this Motion and consent to the dissolution of the TRO and the discharge of Injunction Bond No. BSC-2025-TRO-04419 upon entry of the Consent Order.

Additionally, Gavin Blackhall, Esquire, of Blackhall & Soren LLP, 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801, counsel of record for Defendant Verdana Commerce Group, Inc., has confirmed that Verdana does not oppose this Motion and consents to the dissolution of the TRO and the discharge of Injunction Bond No. BSC-2025-TRO-04419 upon entry of the Consent Order.

A form of consent endorsed by all counsel, confirming non-opposition to the dissolution of the TRO, non-opposition to the discharge of the injunction bond, and acknowledgment that the Consent Order supersedes and replaces the TRO restraints, is attached hereto as Exhibit 1.

VI. PROPOSED ORDER

A Proposed Order Dissolving the Temporary Restraining Order and Discharging the Injunction Bond is submitted herewith as Exhibit 2 for the Court's consideration.

The Proposed Order provides that:

1. The Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8) is dissolved, effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith.

2. Injunction Bond No. BSC-2025-TRO-04419, in the amount of $2,500,000, posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. (175 Water Street, Suite 2400, New York, NY 10038), is discharged and released.

3. Broadview Surety Corp. is authorized and directed to release Cascade Retail Holdings Inc. from any further obligations arising under Bond No. BSC-2025-TRO-04419.

4. The Order is without prejudice to the rights of any party under the Consent Order Incorporating Modified Restrictive Covenants entered concurrently herewith.

VII. CONCLUSION

For the foregoing reasons, Plaintiff Cascade Retail Holdings Inc. respectfully requests that this Court enter the Proposed Order attached hereto as Exhibit 2:

1. Dissolving the Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8), effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith;

2. Discharging and releasing Injunction Bond No. BSC-2025-TRO-04419 in the amount of $2,500,000 posted by Plaintiff through Broadview Surety Corp.; and

3. Granting such other and further relief as this Court deems just and proper.

CALDERWOOD & HARKNESS LLP

By: ________

Bernard Crawford (Del. Bar No. 5218) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101 bcrawford@calderwoodharkness.com

Renata Vasquez (Del. Bar No. 6034) 601 South Figueroa Street, Suite 4200 Los Angeles, CA 90017 Telephone: (213) 555-4800 Facsimile: (213) 555-4801 rvasquez@calderwoodharkness.com

James Underwood (Del. Bar No. 5877) Devon Archer (Del. Bar No. 6291) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101 junderwood@calderwoodharkness.com darcher@calderwoodharkness.com

Counsel for Plaintiff Cascade Retail Holdings Inc.

Dated: April 14, 2025

CERTIFICATE OF SERVICE

I, Bernard Crawford, hereby certify that on April 14, 2025, I caused a true and correct copy of the foregoing Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order, together with all exhibits attached thereto, to be served upon the following counsel of record by electronic filing through the Court's electronic filing system and by email:

Catherine Nygaard, Esquire Whitfield, Nygaard & Doyle LLP 1000 North Market Street, Suite 1500 Wilmington, Delaware 19801 cnygaard@wndlaw.com Counsel for Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson

Gavin Blackhall, Esquire Blackhall & Soren LLP 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 gblackhall@blackhallsoren.com Counsel for Defendant Verdana Commerce Group, Inc.

________________________________________

Bernard Crawford (Del. Bar No. 5218)

EXHIBIT 1

CONSENT OF PARTIES

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CASCADE RETAIL HOLDINGS INC., a Delaware corporation,

Plaintiff,

PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,

Defendants.

C.A. No. 2025-0198-MTZ

CONSENT ENDORSEMENT

The undersigned counsel of record for the parties identified below hereby confirm, in connection with Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order filed on April 14, 2025:

1. Non-Opposition to Dissolution of the TRO. The undersigned, on behalf of their respective clients, do not oppose the dissolution of the Temporary Restraining Order entered by this Court on March 7, 2025 (Dkt. No. 8), effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith.

2. Non-Opposition to Discharge of Injunction Bond. The undersigned, on behalf of their respective clients, do not oppose the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, in the amount of $2,500,000, posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. No party has asserted or intends to assert any claim against the bond or against Broadview Surety Corp. in connection therewith.

3. Consent Order Supersedes TRO. The undersigned, on behalf of their respective clients, confirm that the Consent Order Incorporating Modified Restrictive Covenants, filed concurrently herewith, supersedes and replaces in their entirety the restraints imposed by the Temporary Restraining Order entered on March 7, 2025 and the Consent Interim Order entered on March 21, 2025.

WHITFIELD, NYGAARD & DOYLE LLP

By: ________

Catherine Nygaard (Del. Bar No. 4712) 1000 North Market Street, Suite 1500 Wilmington, Delaware 19801 Telephone: (302) 555-3200 cnygaard@wndlaw.com

Counsel for Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson

Dated: April 14, 2025

BLACKHALL & SOREN LLP

By: ________

Gavin Blackhall (Del. Bar No. 5103) 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Telephone: (302) 555-8600 gblackhall@blackhallsoren.com

Counsel for Defendant Verdana Commerce Group, Inc.

Dated: April 14, 2025

EXHIBIT 2

[PROPOSED] ORDER DISSOLVING TEMPORARY RESTRAINING ORDER AND DISCHARGING INJUNCTION BOND

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CASCADE RETAIL HOLDINGS INC., a Delaware corporation,

Plaintiff,

PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,

Defendants.

C.A. No. 2025-0198-MTZ

ORDER DISSOLVING TEMPORARY RESTRAINING ORDER AND DISCHARGING INJUNCTION BOND

WHEREAS, on March 7, 2025, this Court entered a Temporary Restraining Order (Dkt. No. 8) restraining Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Individual Defendants") from commencing employment in merchandising roles at Defendant Verdana Commerce Group, Inc. ("Verdana");

WHEREAS, as a condition of the Temporary Restraining Order, Plaintiff Cascade Retail Holdings Inc. ("CRH") posted an injunction bond in the amount of $2,500,000 through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419, 175 Water Street, Suite 2400, New York, NY 10038) on March 7, 2025 (Dkt. No. 9);

WHEREAS, on March 21, 2025, this Court entered a Consent Interim Order (Dkt. No. 23) maintaining the status quo — including the restraints imposed by the Temporary Restraining Order — during the settlement documentation period;

WHEREAS, the parties have executed a Standstill and Settlement Agreement dated April 14, 2025 (the "Settlement Agreement") comprehensively resolving all claims in this action, and have filed a Stipulation of Settlement and Proposed Consent Order Incorporating Modified Restrictive Covenants (the "Consent Order") incorporating modified restrictive covenant terms, data return and destruction obligations, compliance monitoring provisions, and monetary settlement terms;

WHEREAS, the Consent Order entered concurrently herewith supersedes and replaces in their entirety the restraints imposed by the Temporary Restraining Order and the Consent Interim Order;

WHEREAS, all parties — through their respective counsel of record — have consented to the dissolution of the Temporary Restraining Order and the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, as evidenced by the Consent Endorsement filed at Exhibit 1 to Plaintiff's Motion; and

WHEREAS, no party has asserted or intends to assert any claim against Injunction Bond No. BSC-2025-TRO-04419 or against Broadview Surety Corp. in connection therewith;

NOW, THEREFORE, upon consideration of Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order, the Consent Endorsement of all parties, and the entire record in this action, IT IS HEREBY ORDERED as follows:

1. The Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8) is hereby DISSOLVED, effective as of the date of entry of this Order.

2. Injunction Bond No. BSC-2025-TRO-04419, in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000), posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. (175 Water Street, Suite 2400, New York, NY 10038), is hereby DISCHARGED and RELEASED.

3. Broadview Surety Corp. is authorized and directed to release Cascade Retail Holdings Inc. from any and all further obligations arising under Bond No. BSC-2025-TRO-04419, and the Clerk of this Court is directed to release the bond from the Court's records.

4. This Order is without prejudice to the rights of any party under the Consent Order Incorporating Modified Restrictive Covenants entered concurrently herewith, which retains this Court's jurisdiction for enforcement purposes for the duration of the modified restrictive covenant periods set forth therein.

SO ORDERED.

________________________________________

Vice Chancellor Margaret T. Zhao

Date: ________

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
CASCADE RETAIL HOLDINGS INC., a Delaware corporation,
Plaintiff,
v.
PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,
Defendants.
C.A. No. 2025-0198-MTZ
PLAINTIFF'S MOTION TO DISSOLVE TEMPORARY RESTRAINING ORDER UPON ENTRY OF CONSENT ORDER
OF COUNSEL:
CALDERWOOD & HARKNESS LLP Bernard Crawford (Del. Bar No. 5218) Renata Vasquez (Del. Bar No. 6034) James Underwood (Del. Bar No. 5877) Devon Archer (Del. Bar No. 6291) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101
Counsel for Plaintiff Cascade Retail Holdings Inc.
Dated: April 14, 2025
I. INTRODUCTION
Plaintiff Cascade Retail Holdings Inc. ("CRH" or "Plaintiff"), by and through its undersigned counsel Calderwood & Harkness LLP, respectfully moves this Court pursuant to Court of Chancery Rules 65(b) and 65(d) for an Order dissolving the Temporary Restraining Order (the "TRO") entered on March 7, 2025 in this action and discharging the injunction bond posted in connection therewith.
On March 7, 2025, Vice Chancellor Margaret T. Zhao granted CRH's ex parte application for a TRO, restraining all eight individual Defendants — Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Individual Defendants") — from commencing employment in merchandising roles at Defendant Verdana Commerce Group, Inc. ("Verdana") for a period of fourteen (14) days. That initial restraint was thereafter extended by the Consent Interim Order entered March 21, 2025, which maintained the status quo — including the TRO restraints — during the settlement documentation period that ran from March 24 through April 11, 2025.
Concurrent with the filing of this Motion, the parties are today filing a Stipulation of Settlement and Proposed Consent Order (the "Consent Order") that incorporates the terms of the fully executed Standstill and Settlement Agreement dated April 14, 2025 (the "Settlement Agreement"). The Consent Order embodies the comprehensive resolution of all claims in this action, including agreed modified restrictive covenant terms tailored to the individual circumstances of each Defendant, data return and certified destruction obligations for the approximately 14,327 exfiltrated files, compliance monitoring provisions administered by a jointly appointed independent compliance monitor, and monetary settlement terms that include both a lump-sum payment and litigation cost reimbursement from Verdana to CRH, as well as forfeiture of aggregate equity by the Individual Defendants.
Because the Consent Order, upon entry by this Court, will supersede and replace in their entirety the restraints imposed by the TRO with the parties' negotiated modified covenant terms and additional protections, the TRO is no longer necessary and should be dissolved. CRH further seeks the discharge and release of the $2,500,000 injunction bond (Bond No. BSC-2025-TRO-04419) posted through Broadview Surety Corp. in connection with the TRO, as the bond's purpose will have been fully satisfied upon dissolution of the TRO and no claim has been or will be made against it by any party. This Motion is made with the consent of all parties, as more fully set forth in Section V below and as evidenced by the consent endorsement attached hereto as Exhibit 1.
II. PROCEDURAL BACKGROUND
A. Filing of the Verified Complaint and TRO Motion
On March 5, 2025, CRH filed a Verified Complaint (Dkt. No. 1) and a Motion for Temporary Restraining Order and Preliminary Injunction (Dkt. No. 2) in this Court, together with supporting declarations, exhibits, and a memorandum of law. The Verified Complaint asserted five counts arising from what CRH alleged was a coordinated scheme by the Individual Defendants and Verdana to misappropriate CRH's confidential business information and trade secrets in connection with the Individual Defendants' near-simultaneous departures from CRH:
Count I — Breach of Restrictive Covenant (Against All Individual Defendants). CRH alleged that each of the eight Individual Defendants had entered into Executive Employment Agreements containing restrictive covenants — including non-competition, non-solicitation of employees, and non-solicitation of vendors provisions — and that each Individual Defendant breached those covenants by accepting employment with Verdana, a direct competitor of CRH in the national retail merchandising sector, within the applicable restricted period.
Count II — Breach of Confidentiality Obligations (Against All Individual Defendants). CRH alleged that each Individual Defendant breached the confidentiality and proprietary information provisions of their respective Executive Employment Agreements by downloading, copying, transmitting, and/or retaining CRH confidential and proprietary information in connection with their departures, including but not limited to materials related to CRH's proprietary five-year category expansion roadmap internally known as "Project Ridgeline."
Count III — Misappropriation of Trade Secrets Under the Delaware Uniform Trade Secrets Act ("DUTSA"), 6 Del. C. § 2001 et seq. (Against All Individual Defendants and Verdana). CRH alleged that the Individual Defendants misappropriated CRH trade secrets by the unauthorized acquisition, disclosure, and use of proprietary information — including Project Ridgeline strategic plans, vendor pricing matrices, supply chain analytics, and customer segmentation data — and that Verdana acquired, or was positioned to acquire, the trade secrets with knowledge that they had been improperly obtained.
Count IV — Tortious Interference with Contractual Relations (Against Verdana). CRH alleged that Verdana, with knowledge of the Individual Defendants' restrictive covenants and confidentiality obligations, intentionally induced and procured the Individual Defendants' breaches of those contractual obligations by offering them employment, and that such interference was accomplished through improper means, including the facilitation of the exfiltration of CRH's confidential information.
Count V — Civil Conspiracy (Against All Defendants). CRH alleged that the Individual Defendants and Verdana conspired to accomplish the unlawful objectives described in Counts I through IV, and that the coordinated nature and near-simultaneous timing of the Individual Defendants' resignations — all on February 7, 2025 — together with the pattern of data exfiltration identified by CRH's forensic investigation, evidenced a concerted plan to transfer CRH's competitive assets to Verdana.
The factual predicate for these claims was described in detail in the Verified Complaint and supporting materials. In summary, CRH alleged that on February 7, 2025, all eight Individual Defendants tendered their resignations from CRH within a four-hour window. Each of the Individual Defendants held a senior merchandising position at CRH — ranging from Senior Vice President of Merchandising (Rathore) to Director-level positions in category management, vendor relations, and strategic planning. A forensic investigation conducted by Aurelian Investigations Group Inc. and its principal investigator, Sandra Fielding, revealed that in the two weeks preceding the coordinated resignations, the Individual Defendants had collectively downloaded or transferred approximately 14,327 files comprising approximately 2.8 gigabytes of data from CRH's internal systems, including its secured Aldermere Systems environment and proprietary analytics platform. The exfiltrated materials included, among other things, the complete Project Ridgeline five-year category expansion roadmap, vendor pricing and margin analyses, customer segmentation models, supply chain optimization reports, and internal competitive intelligence assessments.
B. Entry of the TRO
On March 7, 2025, Vice Chancellor Margaret T. Zhao held a hearing on CRH's ex parte application for a Temporary Restraining Order. After considering the Verified Complaint, the supporting declarations and exhibits, and the arguments of CRH's counsel, the Court granted the TRO application and entered the Temporary Restraining Order (Dkt. No. 8). The TRO restrained all eight Individual Defendants from commencing employment in any merchandising role at Verdana for a period of fourteen (14) days, through and including March 21, 2025.
As a condition of the entry of the TRO, and consistent with Court of Chancery Rule 65(c), CRH was required to post an injunction bond in the amount of $2,500,000 to secure the Individual Defendants and Verdana against any damages that might be sustained by reason of the TRO in the event the Court ultimately determined that the TRO had been wrongfully issued. CRH posted the required bond on March 7, 2025 through Broadview Surety Corp., a licensed surety company, under Bond No. BSC-2025-TRO-04419, issued from Broadview's office at 175 Water Street, Suite 2400, New York, NY 10038. A copy of the bond was filed with the Court on March 7, 2025 (Dkt. No. 9).
C. Preliminary Injunction Proceedings and Consent Interim Order
Following entry of the TRO, the Court scheduled a hearing on CRH's application for a preliminary injunction for March 21, 2025 (Dkt. No. 10).
On March 15, 2025, the Individual Defendants, through their counsel, Catherine Nygaard of Whitfield, Nygaard & Doyle LLP, filed an opposition to CRH's application for a preliminary injunction (Dkt. No. 14). In their opposition, the Individual Defendants argued, among other things, that the restrictive covenants at issue were overbroad in geographic scope and temporal duration, that they imposed unreasonable restraints on the Individual Defendants' ability to pursue their livelihoods, and that CRH could not demonstrate irreparable harm sufficient to justify the extraordinary remedy of a preliminary injunction under the standard articulated by this Court in SI Management L.P. v. Wininger, 707 A.2d 37 (Del. 1998), and its progeny. Verdana, through its counsel, Gavin Blackhall of Blackhall & Soren LLP, filed a separate opposition brief on the same date (Dkt. No. 15), contesting the tortious interference and civil conspiracy claims and arguing that Verdana had independently recruited the Individual Defendants without knowledge of the specific scope of their restrictive covenants.
On March 17, 2025, CRH filed its Reply Memorandum in Further Support of Plaintiff's Application for a Preliminary Injunction (Dkt. No. 18), together with the Supplemental Declaration of Sandra Fielding of Aurelian Investigations Group Inc. (Dkt. No. 19), detailing additional findings from the ongoing forensic investigation, and the Expert Report and Declaration of Dr. Franklin Oberg of Veltrano Consulting Group LLC (Dkt. No. 20), opining on the competitive harm to CRH from the misappropriation of Project Ridgeline materials.
On March 18, 2025, at the suggestion of the Court and with the agreement of all parties, the parties participated in a mediation session before the Honorable Philip Ashford (Ret.) of Meridian ADR Services LLC (Ref. No. Meridian-2025-0318-CRH). The mediation session was conducted in person in Wilmington, Delaware and continued for approximately eleven hours. While the parties did not reach a final settlement during the mediation session itself, Mediator Ashford's efforts significantly narrowed the outstanding issues and established a framework for continued negotiations.
On March 20, 2025, following two additional days of intensive telephonic negotiations among all counsel, the parties reached agreement on the essential terms of a settlement framework that would resolve all claims in this action (the "Settlement Framework"). The Settlement Framework addressed modified restrictive covenant terms, data return and destruction obligations, compliance monitoring, monetary consideration, and the disposition of the pending preliminary injunction application and the TRO.
On March 21, 2025 — the date of the scheduled preliminary injunction hearing — all parties filed a Joint Stipulation to Adjourn Preliminary Injunction Hearing and for Entry of Consent Interim Order (Dkt. No. 22). The Court entered the Consent Interim Order (Dkt. No. 23) on the same date, which provided that: (a) the preliminary injunction hearing was adjourned without date, subject to reinstatement by any party upon seven (7) business days' written notice in the event the settlement negotiations failed; (b) the restraints imposed by the TRO were extended and maintained during the settlement documentation period, which was to run from March 24 through April 11, 2025; and (c) the parties were directed to file a joint status report on or before April 14, 2025 advising the Court of the status of settlement negotiations.
D. Settlement Documentation and the Consent Order
From March 24 through April 11, 2025, the parties — through their respective counsel, Calderwood & Harkness LLP (for CRH), Whitfield, Nygaard & Doyle LLP (for the Individual Defendants), and Blackhall & Soren LLP (for Verdana) — negotiated and finalized the Standstill and Settlement Agreement (the "Settlement Agreement"), which embodies the comprehensive terms for the resolution of all claims in this action. The Settlement Agreement was executed by all parties on April 14, 2025.
The execution version of the Settlement Agreement, together with the Stipulation of Settlement and Proposed Consent Order, is being filed concurrently with this Motion on April 14, 2025 (Dkt. Nos. [to be assigned]). The Consent Order, upon entry by the Court, will: (a) incorporate by reference the modified restrictive covenant terms set forth in Exhibit A to the Settlement Agreement; (b) require data return and certified destruction of all exfiltrated CRH information in accordance with the protocols set forth in Exhibit B to the Settlement Agreement; (c) establish compliance monitoring through the jointly appointed independent compliance monitor, Aldwyn Compliance Solutions LLC of Philadelphia, Pennsylvania; (d) provide for the monetary settlement payments described in the Settlement Agreement; and (e) retain this Court's jurisdiction for purposes of enforcement, including contempt proceedings, for the duration of the modified restrictive covenant periods.
III. THE CONSENT ORDER SUPERSEDES THE TRO
A. The Modified Restrictive Covenant Terms Replace the TRO Restraints
The TRO entered on March 7, 2025 imposed a blanket prohibition on all eight Individual Defendants from commencing employment in any merchandising role at Verdana. While this blanket restraint was appropriate and necessary at the time it was entered — when CRH had just discovered the coordinated departures and the scope of the data exfiltration was still being assessed — the Consent Order now replaces this undifferentiated restraint with tailored, individually negotiated modified restrictive covenant terms that reflect the parties' comprehensive assessment of the competitive risks at issue and the equities of the situation.
The modified restrictive covenant terms incorporated in the Consent Order, and set forth in detail in Exhibit A to the Settlement Agreement, are as follows:
(1) Priya Rathore — Modified Non-Competition. Rathore, who served as CRH's Senior Vice President of Merchandising and had the broadest access to Project Ridgeline and other trade secret materials, has agreed to a twelve (12)-month non-competition period, reduced from the original eighteen (18)-month restrictive period set forth in her Executive Employment Agreement dated June 15, 2021. The modified non-compete runs from February 7, 2025 through February 6, 2026, and is limited in scope to three specific product categories in which Rathore had primary strategic responsibility at CRH: (i) home goods, (ii) seasonal décor, and (iii) private-label apparel. Rathore is permitted to commence employment at Verdana in any role that does not involve merchandising activities within these three product categories.
(2) Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson — Modified Non-Competition. Each of the remaining seven Individual Defendants has agreed to a nine (9)-month non-competition period, reduced from the original twelve (12)- or eighteen (18)-month restrictive periods set forth in their respective Executive Employment Agreements. The modified non-competes run from February 7, 2025 through November 6, 2025, and are limited in scope to the same three specific product categories: (i) home goods, (ii) seasonal décor, and (iii) private-label apparel. Each of these Defendants is permitted to commence employment at Verdana in any role that does not involve merchandising activities within these three product categories.
(3) All Eight Individual Defendants — Modified Non-Solicitation of CRH Employees. All eight Individual Defendants have agreed to an eighteen (18)-month non-solicitation of CRH employees, running from February 7, 2025 through August 6, 2026. This provision prohibits each Individual Defendant from directly or indirectly soliciting, recruiting, or inducing any employee of CRH to leave CRH's employment or to accept employment with Verdana or any other competitor of CRH.
(4) All Eight Individual Defendants — Modified Non-Solicitation of CRH Vendors. All eight Individual Defendants have agreed to a twelve (12)-month non-solicitation of CRH's top fifty (50) vendors (as measured by aggregate spend during the twelve-month period ending January 31, 2025), running from February 7, 2025 through February 6, 2026. A confidential list of the covered vendors is set forth in Schedule 1 to Exhibit A of the Settlement Agreement.
These modified terms are specifically set forth in Exhibit A to the Settlement Agreement, which is incorporated by reference into the Consent Order at Paragraph 3 thereof. The modified terms were the product of extensive negotiation among all parties and their counsel over a period of approximately three weeks, and they reflect carefully calibrated compromises on issues of duration, geographic scope, and activity scope that balance CRH's legitimate interests in protecting its trade secrets and competitive position against the Individual Defendants' interests in pursuing their professional careers.
Because the Consent Order provides comprehensive, Court-enforceable restrictive covenant protections that will remain in effect through the agreed durations — and that are tailored to the specific competitive risks presented by each Individual Defendant's role and access level at CRH — the TRO's blanket restraints are no longer necessary and are fully superseded by the Consent Order.
B. The Consent Order Provides Additional Protections Beyond the TRO
In addition to replacing the TRO's blanket restraints with tailored modified covenant terms, the Consent Order incorporates several categories of protections that go substantially beyond the scope of the TRO. These additional protections further demonstrate that the TRO has been rendered unnecessary by the comprehensive relief embodied in the Consent Order.
(1) Data Return and Certified Destruction. The Consent Order requires that all exfiltrated CRH data — including the approximately 14,327 files (~2.8 GB) identified by Aurelian Investigations Group Inc. during its forensic investigation, as well as any additional CRH data identified through subsequent analysis — be returned to CRH or certified as destroyed within ten (10) business days of the execution of the Settlement Agreement (i.e., by April 28, 2025). The data destruction protocols, which are set forth in detail in Exhibit B to the Settlement Agreement, require each Individual Defendant and Verdana to: (a) return to CRH all physical media containing CRH information; (b) permanently delete all electronic copies of CRH information from all personal devices, cloud storage accounts, and other electronic repositories; and (c) execute a sworn certification of compliance with the data return and destruction obligations. In addition, Verdana has agreed to retain Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, to conduct an independent forensic audit of the devices and systems of each Individual Defendant and of Verdana's corporate systems to verify compliance with the data destruction requirements. The forensic audit is to be completed within thirty (30) days of the execution of the Settlement Agreement, and the costs thereof — capped at $175,000 — are to be borne entirely by Verdana. A copy of Pinnacle Forensics LLC's audit report will be provided to CRH and filed under seal with this Court.
(2) Compliance Monitoring. The parties have jointly appointed Aldwyn Compliance Solutions LLC, a compliance monitoring firm headquartered in Philadelphia, Pennsylvania, as the independent compliance monitor for a twelve (12)-month term commencing on the date of entry of the Consent Order. Aldwyn Compliance Solutions LLC will be responsible for monitoring each Individual Defendant's compliance with the modified restrictive covenant terms, including through periodic reviews of the Individual Defendants' employment activities, vendor interactions, and employee solicitation activities. The compliance monitor will submit quarterly reports to all parties and to this Court. The estimated total cost of the compliance monitoring engagement is $360,000, which will be allocated sixty percent (60%) to Verdana ($216,000) and forty percent (40%) to CRH ($144,000), reflecting the parties' negotiated cost-sharing arrangement.
(3) Retained Jurisdiction. The Consent Order expressly retains this Court's jurisdiction for the purpose of enforcing its terms, including the modified restrictive covenants, the data destruction obligations, and the compliance monitoring provisions. The retained jurisdiction provision authorizes the Court to entertain motions for contempt, specific performance, or other equitable relief in the event of any violation of the Consent Order, without the need for the filing of a new action. This retained jurisdiction will continue for the duration of the longest-running modified restrictive covenant period — i.e., through August 6, 2026 (the expiration date of the eighteen-month non-solicitation of employees provision).
(4) Monetary Settlement. The Settlement Agreement provides for substantial monetary consideration flowing to CRH. Verdana is obligated to pay CRH a lump-sum settlement payment of $8,750,000 within thirty (30) days of the execution of the Settlement Agreement (i.e., by May 14, 2025). Verdana is also obligated to reimburse CRH for $425,000 in litigation costs incurred in connection with this action, payable on the same schedule. In addition, the eight Individual Defendants have agreed to forfeit aggregate equity interests in CRH valued at $849,500, consisting of $362,500 in unvested restricted stock units forfeited by Priya Rathore and $487,000 in aggregate unvested restricted stock units and stock options forfeited by the remaining seven Individual Defendants. The forfeiture of these equity interests is in addition to the cancellation of all unvested equity awards that occurred automatically upon the Individual Defendants' resignations pursuant to the terms of CRH's equity incentive plan.
Taken together, these additional protections represent a comprehensive resolution that addresses not only the immediate competitive threat that gave rise to the TRO application, but also the broader concerns regarding trade secret protection, data security, and ongoing compliance that were at the heart of CRH's claims in this action. The scope of the relief embodied in the Consent Order significantly exceeds what CRH could have obtained through continued litigation of its preliminary injunction application alone.
C. Continued Maintenance of the TRO Is Unnecessary
With the Consent Order in place, continued maintenance of the TRO would create duplicative and potentially conflicting restraints on the Individual Defendants. The TRO imposes a blanket prohibition on employment in merchandising roles at Verdana, whereas the Consent Order imposes tailored restrictions limited to three specific product categories while permitting employment at Verdana in other capacities. To the extent the TRO's broader restraints remain in effect alongside the Consent Order's more tailored terms, there is a risk of confusion regarding the precise scope of each Individual Defendant's obligations, which could impede the efficient administration of the parties' settlement.
Moreover, the Consent Order's modified covenant terms are the product of arm's-length negotiation among all parties and their respective counsel — three sophisticated law firms representing a public corporation, eight individual executives, and a major competitor — and represent a carefully tailored resolution that balances CRH's legitimate interests in protecting its trade secrets and competitive position against the Individual Defendants' interests in pursuing their professional careers and earning their livelihoods. The parties' mutual intent, as expressed in Section 11.2 of the Settlement Agreement, is that the Consent Order shall supersede and replace in their entirety the restraints imposed by the TRO and the Consent Interim Order.
Dissolution of the TRO upon entry of the Consent Order is therefore consistent with judicial economy, the parties' expressed intent, and the orderly administration of the settlement that this Court's retained jurisdiction is designed to protect.
IV. DISCHARGE OF THE INJUNCTION BOND
In connection with the TRO entered on March 7, 2025, and as required by Court of Chancery Rule 65(c), CRH posted an injunction bond in the amount of $2,500,000 through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419, issued from Broadview's office at 175 Water Street, Suite 2400, New York, NY 10038). The bond was filed with the Court on March 7, 2025 (Dkt. No. 9) and has remained in full force and effect throughout the pendency of the TRO and the Consent Interim Order.
The purpose of the injunction bond was to provide security to the Individual Defendants and Verdana against any damages they might sustain by reason of the TRO in the event it was ultimately determined that the TRO had been wrongfully issued. Upon the dissolution of the TRO, the purpose of the bond will have been fully satisfied and no further security will be required. The Consent Order provides the framework for any enforcement going forward, including its own provisions for remedies in the event of breach, and no separate bond or security is contemplated or required under the terms of the Settlement Agreement or the Consent Order.
No party has made any claim against the bond during the period of its effectiveness. The Individual Defendants and Verdana have expressly consented to the discharge and release of Injunction Bond No. BSC-2025-TRO-04419 as part of the Settlement Agreement. Specifically, Section 12.1 of the Settlement Agreement provides that "upon entry of the Order dissolving the TRO, all parties consent to the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, and no party shall assert any claim against the bond or against the surety."
CRH respectfully requests that, upon entry of the Order dissolving the TRO, this Court authorize the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, and direct Broadview Surety Corp. to release CRH from any further obligations arising under the bond.
V. CONSENT OF THE PARTIES
This Motion is made with the full consent of all parties to this action. Undersigned counsel for CRH has conferred with counsel for all Defendants and has confirmed that no party opposes the relief sought herein.
Specifically, Catherine Nygaard, Esquire, of Whitfield, Nygaard & Doyle LLP, 1000 North Market Street, Suite 1500, Wilmington, Delaware 19801, counsel of record for all eight Individual Defendants (Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson), has confirmed that the Individual Defendants do not oppose this Motion and consent to the dissolution of the TRO and the discharge of Injunction Bond No. BSC-2025-TRO-04419 upon entry of the Consent Order.
Additionally, Gavin Blackhall, Esquire, of Blackhall & Soren LLP, 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801, counsel of record for Defendant Verdana Commerce Group, Inc., has confirmed that Verdana does not oppose this Motion and consents to the dissolution of the TRO and the discharge of Injunction Bond No. BSC-2025-TRO-04419 upon entry of the Consent Order.
A form of consent endorsed by all counsel, confirming non-opposition to the dissolution of the TRO, non-opposition to the discharge of the injunction bond, and acknowledgment that the Consent Order supersedes and replaces the TRO restraints, is attached hereto as Exhibit 1.
VI. PROPOSED ORDER
A Proposed Order Dissolving the Temporary Restraining Order and Discharging the Injunction Bond is submitted herewith as Exhibit 2 for the Court's consideration.
The Proposed Order provides that:
1.  The Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8) is dissolved, effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith.
2.  Injunction Bond No. BSC-2025-TRO-04419, in the amount of $2,500,000, posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. (175 Water Street, Suite 2400, New York, NY 10038), is discharged and released.
3.  Broadview Surety Corp. is authorized and directed to release Cascade Retail Holdings Inc. from any further obligations arising under Bond No. BSC-2025-TRO-04419.
4.  The Order is without prejudice to the rights of any party under the Consent Order Incorporating Modified Restrictive Covenants entered concurrently herewith.
VII. CONCLUSION
For the foregoing reasons, Plaintiff Cascade Retail Holdings Inc. respectfully requests that this Court enter the Proposed Order attached hereto as Exhibit 2:
1.  Dissolving the Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8), effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith;
2.  Discharging and releasing Injunction Bond No. BSC-2025-TRO-04419 in the amount of $2,500,000 posted by Plaintiff through Broadview Surety Corp.; and
3.  Granting such other and further relief as this Court deems just and proper.
CALDERWOOD & HARKNESS LLP
By: ________
Bernard Crawford (Del. Bar No. 5218) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101 bcrawford@calderwoodharkness.com
Renata Vasquez (Del. Bar No. 6034) 601 South Figueroa Street, Suite 4200 Los Angeles, CA 90017 Telephone: (213) 555-4800 Facsimile: (213) 555-4801 rvasquez@calderwoodharkness.com
James Underwood (Del. Bar No. 5877) Devon Archer (Del. Bar No. 6291) 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7100 Facsimile: (202) 555-7101 junderwood@calderwoodharkness.com darcher@calderwoodharkness.com
Counsel for Plaintiff Cascade Retail Holdings Inc.
Dated: April 14, 2025
CERTIFICATE OF SERVICE
I, Bernard Crawford, hereby certify that on April 14, 2025, I caused a true and correct copy of the foregoing Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order, together with all exhibits attached thereto, to be served upon the following counsel of record by electronic filing through the Court's electronic filing system and by email:
Catherine Nygaard, Esquire Whitfield, Nygaard & Doyle LLP 1000 North Market Street, Suite 1500 Wilmington, Delaware 19801 cnygaard@wndlaw.com Counsel for Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson
Gavin Blackhall, Esquire Blackhall & Soren LLP 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 gblackhall@blackhallsoren.com Counsel for Defendant Verdana Commerce Group, Inc.
________________________________________
Bernard Crawford (Del. Bar No. 5218)
EXHIBIT 1
CONSENT OF PARTIES
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
CASCADE RETAIL HOLDINGS INC., a Delaware corporation,
Plaintiff,
v.
PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,
Defendants.
C.A. No. 2025-0198-MTZ
CONSENT ENDORSEMENT
The undersigned counsel of record for the parties identified below hereby confirm, in connection with Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order filed on April 14, 2025:
1.  Non-Opposition to Dissolution of the TRO. The undersigned, on behalf of their respective clients, do not oppose the dissolution of the Temporary Restraining Order entered by this Court on March 7, 2025 (Dkt. No. 8), effective upon entry of the Consent Order Incorporating Modified Restrictive Covenants filed concurrently herewith.
2.  Non-Opposition to Discharge of Injunction Bond. The undersigned, on behalf of their respective clients, do not oppose the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, in the amount of $2,500,000, posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. No party has asserted or intends to assert any claim against the bond or against Broadview Surety Corp. in connection therewith.
3.  Consent Order Supersedes TRO. The undersigned, on behalf of their respective clients, confirm that the Consent Order Incorporating Modified Restrictive Covenants, filed concurrently herewith, supersedes and replaces in their entirety the restraints imposed by the Temporary Restraining Order entered on March 7, 2025 and the Consent Interim Order entered on March 21, 2025.
WHITFIELD, NYGAARD & DOYLE LLP
By: ________
Catherine Nygaard (Del. Bar No. 4712) 1000 North Market Street, Suite 1500 Wilmington, Delaware 19801 Telephone: (302) 555-3200 cnygaard@wndlaw.com
Counsel for Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson
Dated: April 14, 2025
BLACKHALL & SOREN LLP
By: ________
Gavin Blackhall (Del. Bar No. 5103) 300 Delaware Avenue, Suite 900 Wilmington, Delaware 19801 Telephone: (302) 555-8600 gblackhall@blackhallsoren.com
Counsel for Defendant Verdana Commerce Group, Inc.
Dated: April 14, 2025
EXHIBIT 2
[PROPOSED] ORDER DISSOLVING TEMPORARY RESTRAINING ORDER AND DISCHARGING INJUNCTION BOND
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
CASCADE RETAIL HOLDINGS INC., a Delaware corporation,
Plaintiff,
v.
PRIYA RATHORE, DEREK LINDEN, SONIA KACZMAREK, AMARA OSEI, BRENT HALVORSEN, LUCIA FERNANDEZ-GILL, NATHAN TSAO, KIRA JOHANSSON, and VERDANA COMMERCE GROUP, INC., a Delaware corporation,
Defendants.
C.A. No. 2025-0198-MTZ
ORDER DISSOLVING TEMPORARY RESTRAINING ORDER AND DISCHARGING INJUNCTION BOND
WHEREAS, on March 7, 2025, this Court entered a Temporary Restraining Order (Dkt. No. 8) restraining Defendants Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Individual Defendants") from commencing employment in merchandising roles at Defendant Verdana Commerce Group, Inc. ("Verdana");
WHEREAS, as a condition of the Temporary Restraining Order, Plaintiff Cascade Retail Holdings Inc. ("CRH") posted an injunction bond in the amount of $2,500,000 through Broadview Surety Corp. (Bond No. BSC-2025-TRO-04419, 175 Water Street, Suite 2400, New York, NY 10038) on March 7, 2025 (Dkt. No. 9);
WHEREAS, on March 21, 2025, this Court entered a Consent Interim Order (Dkt. No. 23) maintaining the status quo — including the restraints imposed by the Temporary Restraining Order — during the settlement documentation period;
WHEREAS, the parties have executed a Standstill and Settlement Agreement dated April 14, 2025 (the "Settlement Agreement") comprehensively resolving all claims in this action, and have filed a Stipulation of Settlement and Proposed Consent Order Incorporating Modified Restrictive Covenants (the "Consent Order") incorporating modified restrictive covenant terms, data return and destruction obligations, compliance monitoring provisions, and monetary settlement terms;
WHEREAS, the Consent Order entered concurrently herewith supersedes and replaces in their entirety the restraints imposed by the Temporary Restraining Order and the Consent Interim Order;
WHEREAS, all parties — through their respective counsel of record — have consented to the dissolution of the Temporary Restraining Order and the discharge and release of Injunction Bond No. BSC-2025-TRO-04419, as evidenced by the Consent Endorsement filed at Exhibit 1 to Plaintiff's Motion; and
WHEREAS, no party has asserted or intends to assert any claim against Injunction Bond No. BSC-2025-TRO-04419 or against Broadview Surety Corp. in connection therewith;
NOW, THEREFORE, upon consideration of Plaintiff's Motion to Dissolve Temporary Restraining Order Upon Entry of Consent Order, the Consent Endorsement of all parties, and the entire record in this action, IT IS HEREBY ORDERED as follows:
1.  The Temporary Restraining Order entered on March 7, 2025 (Dkt. No. 8) is hereby DISSOLVED, effective as of the date of entry of this Order.
2.  Injunction Bond No. BSC-2025-TRO-04419, in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000), posted by Plaintiff Cascade Retail Holdings Inc. through Broadview Surety Corp. (175 Water Street, Suite 2400, New York, NY 10038), is hereby DISCHARGED and RELEASED.
3.  Broadview Surety Corp. is authorized and directed to release Cascade Retail Holdings Inc. from any and all further obligations arising under Bond No. BSC-2025-TRO-04419, and the Clerk of this Court is directed to release the bond from the Court's records.
4.  This Order is without prejudice to the rights of any party under the Consent Order Incorporating Modified Restrictive Covenants entered concurrently herewith, which retains this Court's jurisdiction for enforcement purposes for the duration of the modified restrictive covenant periods set forth therein.
SO ORDERED.
________________________________________
Vice Chancellor Margaret T. Zhao
Date: ________

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

OF COUNSEL:

I. INTRODUCTION

II. PROCEDURAL BACKGROUND

III. THE CONSENT ORDER SUPERSEDES THE TRO

IV. DISCHARGE OF THE INJUNCTION BOND

V. CONSENT OF THE PARTIES

VI. PROPOSED ORDER

VII. CONCLUSION

CALDERWOOD & HARKNESS LLP

CERTIFICATE OF SERVICE

EXHIBIT 1

CONSENT OF PARTIES

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CONSENT ENDORSEMENT

WHITFIELD, NYGAARD & DOYLE LLP

BLACKHALL & SOREN LLP

EXHIBIT 2

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ORDER DISSOLVING TEMPORARY RESTRAINING ORDER AND DISCHARGING INJUNCTION BOND

SO ORDERED.

Record

Parties

Dates

Amounts