MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
TO: File
FROM: Bernard Crawford, Responsible Partner
DATE: April 15, 2025
RE: Matter Closing Memorandum — Cascade Retail Holdings Inc. v. Rathore et al., C.A. No. 2025-0198-MTZ (Del. Ch.)
MATTER NO.: 1038-00006
CLIENT: Cascade Retail Holdings Inc. (Nasdaq: CRHL)
PRIMARY CLIENT CONTACT: Theresa Yun-Park, General Counsel
Right-click to update Table of Contents
I. Purpose and Executive Summary
The purpose of this memorandum is to memorialize the disposition and closing status of Calderwood & Harkness LLP Matter No. 1038-00006 for the permanent file. This memorandum is intended to serve as a comprehensive record of the engagement, the underlying facts, the procedural history, the settlement achieved, and all remaining continuing obligations, so that any attorney at the firm who may need to reference this matter in the future will have a complete and self-contained account of the representation.
The matter involved the enforcement of restrictive covenant provisions — specifically, non-competition, non-solicitation, and confidentiality obligations — contained in the employment agreements of eight former senior merchandising employees of Cascade Retail Holdings Inc. ("CRH" or the "Company"). The departing employees were led by Priya Rathore, CRH's former Senior Vice President of Merchandising, who coordinated a mass departure of her team to join Verdana Commerce Group, Inc. ("Verdana"), a direct competitor in the retail sector. Throughout this memorandum, the eight former employees are collectively referred to as the "Rathore Group."
In addition to breach-of-contract claims for violation of the restrictive covenants, CRH asserted claims for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), tortious interference with contractual relations, and civil conspiracy. These claims were directed against both the individual defendants and Verdana as a corporate defendant.
The litigation was filed in the Delaware Court of Chancery on March 5, 2025, under Docket No. C.A. No. 2025-0198-MTZ, before Vice Chancellor Margaret T. Zhao. The Court granted CRH's application for a temporary restraining order on March 7, 2025, restraining all eight defendants from commencing employment in merchandising roles at Verdana for a period of fourteen days. CRH posted a $2,500,000 injunction bond in connection with the TRO.
The matter was resolved through a mediated settlement facilitated by the Honorable Philip Ashford (Ret.) through Meridian ADR Services LLC. A Standstill and Settlement Agreement (the "Settlement Agreement") was fully executed by all parties on April 14, 2025. On the same date, Vice Chancellor Zhao entered a Consent Order incorporating the material terms of the settlement, including modified restrictive covenants, data-destruction obligations, and the appointment of an independent compliance monitor for a twelve-month term.
The total economic recovery to CRH is $10,024,500, comprising a $8,750,000 cash settlement payment from Verdana, $849,500 in equity forfeiture and clawback across the eight former employees, and $425,000 in litigation cost reimbursement from Verdana. The modified restrictive covenants meaningfully protect CRH's competitive interests in its three core product categories — home goods, seasonal décor, and private-label apparel — during the critical transition period following the mass departure.
As of the date of this memorandum, the matter is transitioning from active litigation to a monitoring and closing phase. The Consent Order remains in effect, and the Court of Chancery retains jurisdiction for enforcement purposes. An independent compliance monitor, Aldwyn Compliance Solutions LLC, has been appointed for a twelve-month term commencing April 14, 2025, with quarterly verification of compliance with the modified restrictive covenants and data-destruction obligations. A stipulation for dismissal with prejudice has been prepared and will be held in escrow pending satisfactory completion of the compliance monitoring period, with a target filing date of April 14, 2026.
II. Engagement Summary
A. Client and Engagement Details
The client in this matter is Cascade Retail Holdings Inc., a Delaware corporation headquartered at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH is publicly traded on the Nasdaq Stock Market under the ticker symbol CRHL. The Company's Employer Identification Number is 91-2847351.
CRH is a major omnichannel retailer operating 387 brick-and-mortar retail locations across 34 states, as well as a robust direct-to-consumer ecommerce platform. For the fiscal year ended January 31, 2024 ("FY2024"), CRH reported revenue of approximately $6.82 billion, with an approximate market capitalization of $4.1 billion as of February 2025. CRH's merchandising division — the division at the center of this dispute — is a significant contributor to the Company's overall financial performance, accounting for approximately $2.3 billion in gross merchandise value in FY2024. The division encompasses product categories including home goods, seasonal décor, private-label apparel, hardlines, softlines, and ecommerce assortment, among others.
The primary client contact for this engagement was Theresa Yun-Park, General Counsel of CRH, who served as the principal liaison between the Company and Calderwood & Harkness throughout the representation. Other key client personnel who were involved in the matter at various stages include:
• Marcus Langford, Chief Executive Officer, who provided strategic direction regarding the Company's posture toward enforcement and settlement;
• Roland Ashby, Chief People Officer, who was responsible for initial identification and escalation of the coordinated departure and who provided factual support throughout the engagement;
• Martin Cho, Vice President, Merchandising, who assumed the role of acting interim Senior Vice President of Merchandising following Rathore's departure and who provided substantive input regarding the competitive impact of the departures and the scope of the trade secrets at issue; and
• Dr. Lorraine Stahl, Independent Director and Chair of the Audit Committee of the CRH Board of Directors, who was notified of the litigation contingency in accordance with corporate governance protocols and who oversaw the Board's consideration and approval of the settlement.
B. Calderwood & Harkness Engagement
Calderwood & Harkness LLP was formally engaged by CRH to represent the Company in connection with this matter pursuant to an engagement letter dated February 18, 2025. The engagement letter was executed by Bernard Crawford, as Responsible Partner, on behalf of the firm, and by Theresa Yun-Park, as General Counsel, on behalf of CRH.
The scope of the engagement encompassed the enforcement of restrictive covenants contained in the employment agreements of the Rathore Group, the prosecution of claims for misappropriation of trade secrets under DUTSA, the prosecution of claims for tortious interference with contractual relations and civil conspiracy against Verdana, and any related claims, counterclaims, or cross-claims that might arise in the course of the litigation. The engagement also encompassed pre-litigation investigation, expedited discovery, injunctive relief proceedings, and, if necessary, trial.
The primary Calderwood & Harkness office utilized in connection with this engagement was the firm's Washington, D.C. office, located at 1301 K Street NW, Suite 1200, Washington, DC 20005. The firm's Los Angeles office, located at 601 South Figueroa Street, Suite 4200, Los Angeles, CA 90017, served in a secondary capacity, principally through the involvement of Renata Vasquez as Billing Partner.
The matter was assigned firm Matter Number 1038-00006 upon opening.
C. Staffing
The following attorneys were staffed on Matter No. 1038-00006 throughout the engagement:
• Bernard Crawford — Responsible Partner, Labor & Employment Practice Group (Washington, D.C. office). Mr. Crawford served as the lead partner on the matter, with primary responsibility for client communications, strategic direction, court appearances, and settlement negotiations. Mr. Crawford's standard billing rate is $1,350 per hour.
• Renata Vasquez — Billing Partner, Labor & Employment Practice Group (Los Angeles office). Ms. Vasquez served as the billing partner and provided substantive support in the areas of trade secret law and restrictive covenant enforcement, with particular focus on damages theory and settlement valuation. Ms. Vasquez's standard billing rate is $1,275 per hour.
• James Underwood — Lead Associate, Labor & Employment Practice Group (Washington, D.C. office). Mr. Underwood served as the lead associate on the matter and was responsible for the day-to-day management of the litigation, including preparation of all court filings, coordination with expert witnesses and investigators, management of the expedited discovery process, and drafting of the Settlement Agreement and related documentation. Mr. Underwood's standard billing rate is $785 per hour.
• Devon Archer — Working Associate, Labor & Employment Practice Group (Washington, D.C. office). Mr. Archer served as the principal working associate and was responsible for legal research, document review, preparation of factual memoranda, coordination with Pinnacle Forensics LLC on forensic evidence, and assisting with all phases of the litigation and settlement. Mr. Archer's standard billing rate is $625 per hour.
No other attorneys or paraprofessionals from Calderwood & Harkness were materially involved in the engagement, although the firm's litigation support services department provided standard eDiscovery and technology support.
III. Parties and Adverse Parties
A. Plaintiff
The plaintiff in this action is Cascade Retail Holdings Inc., a corporation organized and existing under the laws of the State of Delaware. CRH's registered agent in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801. Additional details regarding CRH are set forth in Section II.A above.
B. Individual Defendants (the "Rathore Group")
The eight individual defendants, collectively referred to throughout this memorandum and the litigation as the "Rathore Group," are former senior merchandising employees of CRH who departed the Company in a coordinated mass resignation on February 7, 2025. Each individual defendant was party to an employment agreement with CRH containing restrictive covenants governed by Delaware law. The individual defendants are as follows:
1. Priya Rathore — Former Senior Vice President, Merchandising. Ms. Rathore was employed by CRH from June 3, 2019 through February 7, 2025, a period of approximately five years and eight months. Her FY2024 base salary was $485,000, with a target annual bonus of $290,000 (representing 60% of base salary). Upon her promotion to SVP in March 2021, Ms. Rathore received a restricted stock unit ("RSU") grant valued at $725,000, subject to four-year ratable annual vesting (25% per year) from the March 15, 2021 promotion date. Her employment agreement contained an 18-month non-competition covenant covering the United States. Following her departure from CRH, Ms. Rathore accepted the position of President, Merchandising & Strategy at Verdana, with a base salary of $650,000, a sign-on bonus of $1,500,000, a target annual bonus of $520,000, and a grant of 1.5% fully diluted equity in Verdana. Ms. Rathore resides at 14 Harbor Ridge Lane, Bellevue, Washington 98004.
2. Derek Linden — Former Vice President, Hardlines Merchandising. Mr. Linden was employed by CRH for approximately seven years. His FY2024 base salary was $340,000. His employment agreement contained an 18-month non-competition covenant.
3. Sonia Kaczmarek — Former Vice President, Softlines Merchandising. Ms. Kaczmarek was employed by CRH for approximately five years. Her FY2024 base salary was $325,000. Her employment agreement contained an 18-month non-competition covenant.
4. Amara Osei — Former Director, Private Label Strategy. Ms. Osei was employed by CRH for approximately four years. Her FY2024 base salary was $265,000. Her employment agreement contained a 12-month non-competition covenant.
5. Brent Halvorsen — Former Director, Seasonal Planning & Analytics. Mr. Halvorsen was employed by CRH for approximately six years. His FY2024 base salary was $258,000. His employment agreement contained a 12-month non-competition covenant.
6. Lucia Fernandez-Gill — Former Director, Vendor Relations (Domestic). Ms. Fernandez-Gill was employed by CRH for approximately five years. Her FY2024 base salary was $248,000. Her employment agreement contained a 12-month non-competition covenant.
7. Nathan Tsao — Former Senior Manager, eCommerce Merchandising. Mr. Tsao was employed by CRH for approximately three years. His FY2024 base salary was $195,000. His employment agreement contained a 12-month non-competition covenant.
8. Kira Johansson — Former Senior Manager, Category Analytics. Ms. Johansson was employed by CRH for approximately four years. Her FY2024 base salary was $192,000. Her employment agreement contained a 12-month non-competition covenant.
The individual defendants were represented in this matter by the law firm of Whitfield, Nygaard & Doyle LLP ("WND"), located at 1000 North Market Street, Suite 1500, Wilmington, Delaware 19801. The lead partner was Catherine Nygaard, assisted by associate Travis Beaumont. WND entered its appearance on behalf of all eight individual defendants on February 27, 2025.
C. Corporate Defendant
The corporate defendant in this action is Verdana Commerce Group, Inc., a corporation organized and existing under the laws of the State of Delaware, with principal offices at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana is a privately held retail company. Its Employer Identification Number is 51-3982647. For FY2024, Verdana's estimated revenue was approximately $1.9 billion. The company's Chief Executive Officer is Warren Dietrich, and its General Counsel is Helen Tsoi.
Verdana is a portfolio company of Greystone Capital Partners, LP, a private equity firm headquartered at 680 Park Avenue, 22nd Floor, New York, New York 10065. Greystone's Managing Partner is Elliot Westbrook. Greystone acquired a majority equity stake in Verdana through Greystone Capital Fund VII, LP (vintage 2022; approximately $8.5 billion in committed capital) for an enterprise value of $2.4 billion in the third quarter of 2023. The Greystone investment and the involvement of Greystone personnel in the coordinated recruitment of the Rathore Group were relevant facts in this litigation.
Verdana was represented in this matter by the law firm of Blackhall & Soren LLP, located at 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801. The lead partner was Gavin Blackhall, assisted by senior associate Meredith Lau. Blackhall & Soren entered its appearance on behalf of Verdana on February 27, 2025.
D. Non-Party: Greystone Capital Partners, LP
Greystone Capital Partners, LP was not named as a defendant in this action. However, its role as the majority equity holder of Verdana and as a facilitator of the coordinated recruitment of the Rathore Group was documented during the pre-litigation investigation and was referenced in the Verified Complaint. A cease-and-desist letter was sent to Greystone, attention Elliot Westbrook, on February 25, 2025, putting Greystone on notice of CRH's claims and demanding that Greystone cease its facilitation of the restrictive covenant violations. The decision not to name Greystone as a defendant was a strategic one, made in consultation with the client, based on the assessment that the claims against Verdana directly — as the entity actually employing the Rathore Group — would be sufficient to achieve CRH's enforcement objectives and that the addition of Greystone as a named defendant could complicate the litigation and delay injunctive relief without materially improving CRH's position.
IV. Factual Background
A. Employment Relationships and Restrictive Covenants
Priya Rathore was hired by CRH on June 3, 2019 in the role of Vice President, Merchandising Strategy. At the time of hire, Ms. Rathore executed an Employment Agreement with CRH containing the following restrictive covenant provisions:
• Non-Competition Covenant: An 18-month post-termination non-competition covenant covering the entire United States, prohibiting Ms. Rathore from engaging in or providing services to any business that competes with CRH in the retail sector during the restricted period.
• Non-Solicitation Covenant: A 24-month post-termination non-solicitation covenant, prohibiting Ms. Rathore from soliciting or inducing any employees of CRH to terminate their employment, and from soliciting or diverting any of CRH's vendors or suppliers.
• Confidentiality Obligations: Perpetual confidentiality obligations prohibiting Ms. Rathore from disclosing or using any confidential information or trade secrets of CRH, without limitation as to time.
The Employment Agreement was governed by Delaware law and contained a Delaware forum selection clause.
On March 15, 2021, Ms. Rathore was promoted to the position of Senior Vice President, Merchandising. In connection with this promotion, Ms. Rathore executed an Amended and Restated Employment Agreement (the "A&R Employment Agreement") that contained substantively identical restrictive covenant provisions. The A&R Employment Agreement also provided for additional consideration in the form of a $150,000 promotion bonus and an RSU grant valued at $725,000, subject to four-year ratable annual vesting at 25% per year commencing on the March 15, 2021 promotion date. The A&R Employment Agreement included a for-cause clawback provision permitting CRH to recoup previously vested equity awards upon a determination that the employee had breached her restrictive covenant obligations.
Each of the other seven members of the Rathore Group also signed employment agreements with CRH containing restrictive covenants governed by Delaware law. The non-competition periods for the remaining employees ranged from 12 to 18 months, depending on the employee's seniority and the date of the applicable agreement. Non-solicitation periods ranged from 18 to 24 months. All agreements contained perpetual confidentiality obligations. Each agreement was supported by adequate consideration, including initial employment, continued employment, access to confidential information and trade secrets, and, in certain cases, equity grants and promotion-related compensation.
B. Project Ridgeline
In October 2024, CRH completed a major strategic initiative internally designated "Project Ridgeline." Project Ridgeline was a comprehensive five-year strategic category expansion plan developed by the merchandising division under the leadership of Priya Rathore. The Project Ridgeline materials encompassed, among other things:
• Proprietary vendor terms, including negotiated pricing, volume commitments, and exclusivity arrangements with CRH's most significant suppliers;
• Private-label margin targets and cost models for CRH's expanding portfolio of owned brands;
• Ecommerce assortment algorithms developed by CRH's data science team for use in optimizing online product selection and pricing; and
• Detailed category expansion strategies, including market entry plans for new geographic regions and product segments.
All eight members of the Rathore Group had full access to the Project Ridgeline materials by virtue of their roles within the merchandising division. Ms. Rathore, as the SVP of Merchandising, was the executive sponsor of the initiative and had ultimate oversight of all workstreams.
Calderwood & Harkness conducted a detailed trade secret analysis of the Project Ridgeline materials in consultation with the client and with Pinnacle Forensics LLC. Based on this analysis, we concluded that the Project Ridgeline materials qualified as trade secrets under DUTSA, as they derived independent economic value from not being generally known to or readily ascertainable by other persons who could obtain economic value from their disclosure or use, and CRH had taken reasonable measures to maintain their secrecy, including restricting access to designated personnel, requiring execution of confidentiality agreements, implementing password protections and access controls on the relevant document repositories, and labeling key documents as confidential and proprietary.
C. Coordinated Recruitment and Departure
The pre-litigation investigation, conducted by Aurelian Investigations Group Inc. under the direction of lead investigator Sandra Fielding, and the forensic analysis conducted by Pinnacle Forensics LLC under the direction of Dr. Rajiv Anand, revealed the following timeline of events establishing the coordinated nature of the recruitment and departure:
January 6, 2025: Warren Dietrich, CEO of Verdana, and Elliot Westbrook, Managing Partner of Greystone Capital Partners, met privately with Priya Rathore at a private dinner in New York City. This meeting was identified and confirmed through the investigation conducted by Aurelian Investigations Group Inc. The dinner took place at a private dining venue and was not disclosed by any of the participants to CRH. This meeting is believed to have been the initiating event in the coordinated recruitment effort.
January 13–24, 2025: A series of encrypted messaging exchanges took place among all eight members of the Rathore Group, discussing departure timing, the terms of their respective offers from Verdana, and the logistics of a simultaneous resignation. These communications were identified through forensic analysis of CRH-issued devices conducted by Pinnacle Forensics LLC. Although the messages were transmitted through encrypted personal messaging applications, metadata and fragments recovered from the CRH-issued devices confirmed the existence, timing, and general substance of these communications.
January 27, 2025: Priya Rathore signed her offer letter with Verdana, accepting the position of President, Merchandising & Strategy.
January 28 – February 4, 2025: The remaining seven members of the Rathore Group signed their respective offer letters with Verdana over the course of approximately one week. The aggregate sign-on bonuses for all eight employees totaled $6,200,000, comprising $1,500,000 for Ms. Rathore and $4,700,000 in the aggregate for the remaining seven employees. The magnitude of these sign-on bonuses, which significantly exceeded market norms, was consistent with Verdana's willingness to compensate the employees for the risk of restrictive covenant enforcement.
January 2025 (public announcement): Separately and contemporaneously, Verdana publicly announced a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. The announcement specifically identified CRH's strongest product categories — private-label home goods and seasonal décor — as key targets for Verdana's expansion. This public announcement corroborated CRH's theory that the recruitment of the Rathore Group was a deliberate strategic effort by Verdana and its private equity sponsor to accelerate competitive entry into CRH's core categories.
D. Data Exfiltration
Forensic analysis conducted by Pinnacle Forensics LLC confirmed that, during the period from January 10 through February 4, 2025, a total of 14,327 files (approximately 2.8 gigabytes) were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts maintained by members of the Rathore Group. The exfiltrated files included:
• Project Ridgeline presentations, including the full five-year strategic plan;
• Vendor negotiation term sheets reflecting proprietary pricing and contractual terms with CRH's key suppliers;
• Private-label cost models setting forth unit economics, margin targets, and manufacturing sourcing arrangements; and
• Customer segmentation data derived from CRH's proprietary analytics platform.
The data exfiltration was confirmed by Dr. Rajiv Anand in a forensic report prepared by Pinnacle Forensics LLC and submitted to Calderwood & Harkness on March 12, 2025. The forensic report detailed the access logs, download timestamps, file inventories, and destination accounts associated with each instance of data transfer. The report was filed with the Court in support of CRH's motion for injunctive relief.
E. Resignations and discovery
On Friday, February 7, 2025, all eight members of the Rathore Group submitted simultaneous resignation letters via email to their respective supervisors and to the CRH Human Resources department. The resignation emails were sent at 4:47 PM Pacific Standard Time, effective immediately. The simultaneity and timing of the resignations — late on a Friday afternoon — were plainly calculated to maximize disruption and minimize CRH's ability to respond in real time.
On Monday, February 10, 2025, Roland Ashby, CRH's Chief People Officer, reviewed the resignation submissions and immediately alerted Theresa Yun-Park, General Counsel, to the coordinated nature of the departures and the potential implications for CRH's operations, competitive position, and trade secret protections.
On February 12, 2025, CRH's in-house legal team, working in coordination with the Human Resources and Information Technology departments, confirmed the restrictive covenant provisions in each of the eight employees' employment agreements and initiated an IT audit that identified the data exfiltration described in Section IV.D above.
On February 14, 2025, Verdana issued a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," publicly announcing the hiring of the eight former CRH employees and describing the team as a key component of Verdana's transformational growth initiative. The press release identified Ms. Rathore by name and title and referenced her "deep expertise in private-label development, seasonal merchandising, and omnichannel strategy" — all areas directly relevant to the trade secrets and confidential information at the center of this dispute.
V. Procedural History
A. Pre-Litigation Phase
The pre-litigation phase of this matter unfolded rapidly following the discovery of the coordinated departures and data exfiltration. The key events during this phase are summarized below:
February 18, 2025: CRH formally engaged Calderwood & Harkness LLP to represent the Company in connection with the enforcement of its restrictive covenants and the prosecution of related claims. The matter was opened as 1038-00006. The engagement letter, dated February 18, 2025, was executed by Bernard Crawford (Responsible Partner) on behalf of Calderwood & Harkness and by Theresa Yun-Park (General Counsel) on behalf of CRH.
February 19, 2025: Calderwood & Harkness issued a litigation hold notice to CRH's legal, human resources, information technology, and merchandising departments, directing the preservation of all documents and electronically stored information potentially relevant to the matter, including all communications with or relating to the Rathore Group, all Project Ridgeline materials, and all access logs and security records from CRH's document management and cloud platforms.
February 20, 2025: Calderwood & Harkness engaged Pinnacle Forensics LLC as forensic technology and eDiscovery consultants. The engagement lead was Dr. Rajiv Anand, a certified digital forensics examiner. Pinnacle Forensics is located at 8700 Georgia Avenue, Suite 300, Silver Spring, Maryland 20910. Pinnacle was tasked with forensic imaging of all CRH-issued devices previously assigned to the Rathore Group, analysis of access logs for CRH's Aldermere Systems and Pinnacle Health IT environments, and preparation of a forensic report detailing the scope and nature of the data exfiltration.
February 21, 2025: Calderwood & Harkness engaged Aurelian Investigations Group Inc. as private investigators. The lead investigator was Sandra Fielding. Aurelian is located at 1420 Fifth Avenue, Suite 2210, Seattle, Washington 98101. Aurelian was tasked with investigating the circumstances surrounding the coordinated recruitment and departure, including identification of contacts between the Rathore Group and Verdana or Greystone Capital personnel, timeline reconstruction, and development of factual evidence to support the claims.
February 25, 2025: Calderwood & Harkness sent cease-and-desist letters to the following recipients:
(a) Priya Rathore, individually, at her residence address;
(b) Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson, individually, at their respective last known addresses;
(c) Verdana Commerce Group, Inc., attention Helen Tsoi, General Counsel, at Verdana's principal offices; and
(d) Greystone Capital Partners, LP, attention Elliot Westbrook, Managing Partner, at Greystone's principal offices.
Each cease-and-desist letter identified the applicable restrictive covenant provisions, demanded immediate compliance, demanded return or destruction of all CRH confidential information and trade secrets in the recipients' possession, and reserved all rights and remedies.
February 27, 2025: Whitfield, Nygaard & Doyle LLP entered its appearance on behalf of all eight individual defendants. Blackhall & Soren LLP entered its appearance on behalf of Verdana Commerce Group, Inc.
March 3, 2025: Calderwood & Harkness engaged Veltrano Consulting Group LLC as an economic damages expert. The engagement lead was Dr. Franklin Oberg. Veltrano is located at 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606. Dr. Oberg was retained to develop a preliminary damages analysis quantifying the harm to CRH resulting from the coordinated departure and trade secret misappropriation.
B. Litigation Phase
March 5, 2025: Calderwood & Harkness filed the Verified Complaint and Motion for Temporary Restraining Order and Preliminary Injunction in the Delaware Court of Chancery. The action was assigned Case No. C.A. No. 2025-0198-MTZ and was assigned to Vice Chancellor Margaret T. Zhao.
The Verified Complaint asserted five counts against the defendants:
Count I: Breach of restrictive covenant (non-competition) — asserted against all eight individual defendants.
Count II: Breach of confidentiality obligations — asserted against all eight individual defendants.
Count III: Misappropriation of trade secrets under DUTSA — asserted against all eight individual defendants and Verdana Commerce Group, Inc.
Count IV: Tortious interference with contractual relations — asserted against Verdana Commerce Group, Inc.
Count V: Civil conspiracy — asserted against all eight individual defendants and Verdana Commerce Group, Inc.
The Verified Complaint was supported by declarations from Theresa Yun-Park (General Counsel of CRH, providing foundational facts regarding the employment relationships, restrictive covenants, Project Ridgeline, and the circumstances of the departures), Roland Ashby (Chief People Officer of CRH, providing facts regarding the coordinated resignations and the impact on CRH's merchandising operations), and Dr. Rajiv Anand (Pinnacle Forensics LLC, providing a preliminary report on the forensic evidence of data exfiltration).
March 7, 2025: The Court of Chancery granted CRH's application for an ex parte temporary restraining order. The TRO restrained all eight individual defendants from commencing employment in merchandising roles at Verdana for a period of fourteen days. In connection with the TRO, CRH posted an injunction bond in the amount of $2,500,000 through Broadview Surety Corp., located at 175 Water Street, Suite 2400, New York, New York 10038. The bond was designated Bond No. BSC-2025-TRO-04419.
March 10, 2025: Vice Chancellor Zhao scheduled the preliminary injunction hearing for March 21, 2025, and issued a scheduling order governing expedited discovery in advance of the hearing.
March 12–18, 2025: Expedited discovery was conducted pursuant to the scheduling order. During this period, Pinnacle Forensics LLC produced its completed forensic report, confirming the exfiltration of 14,327 files (approximately 2.8 GB) from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts. The parties exchanged document productions and took limited depositions relevant to the preliminary injunction.
March 15, 2025: The individual defendants, through WND, and Verdana, through Blackhall & Soren, filed oppositions to CRH's motion for a preliminary injunction. The defendants' primary argument was that the restrictive covenants in the employment agreements were overbroad and unenforceable under Delaware's reasonableness standard, contending in particular that the nationwide geographic scope and the breadth of the competitive activity restrictions exceeded what was necessary to protect CRH's legitimate business interests. The defendants also challenged the irreparable harm showing and argued that CRH could be made whole through money damages.
March 17, 2025: Calderwood & Harkness filed CRH's reply memorandum in support of the preliminary injunction motion. The reply was supported by additional declarations from Sandra Fielding (Aurelian Investigations Group Inc., detailing the results of the investigation, including the January 6, 2025 dinner meeting among Dietrich, Westbrook, and Rathore) and Dr. Franklin Oberg (Veltrano Consulting Group LLC, providing a preliminary damages analysis quantifying the potential harm to CRH).
C. Mediation and Settlement
March 17, 2025: CRH submitted a confidential mediation statement to the Honorable Philip Ashford (Ret.), through Meridian ADR Services LLC, located at 200 Continental Drive, Suite 310, Wilmington, Delaware 19803. The mediation was assigned Reference No. Meridian-2025-0318-CRH. The mediation statement set forth CRH's factual and legal position, the strength of CRH's claims, the preliminary damages analysis, and CRH's objectives in any settlement.
March 18, 2025: A full-day mediation session was held under the auspices of Meridian ADR Services and facilitated by Judge Ashford. All parties participated in the mediation, including CRH (represented by Bernard Crawford and Theresa Yun-Park), all eight individual defendants (represented by Catherine Nygaard of WND), and Verdana (represented by Gavin Blackhall of Blackhall & Soren and Helen Tsoi, General Counsel of Verdana). The mediation was conducted in Wilmington, Delaware, with participants attending both in person and by secure videoconference.
March 20, 2025: Following two additional days of intensive negotiations facilitated by Judge Ashford through shuttle diplomacy, the parties reached a settlement framework setting forth the material terms of the resolution. The framework addressed the modification of the restrictive covenants, the monetary terms of the settlement, the data return and destruction protocol, and the appointment of an independent compliance monitor.
March 21, 2025: In light of the settlement framework, the preliminary injunction hearing scheduled for that date was adjourned by stipulation of all parties. The Court entered a Consent Interim Order maintaining the status quo during the settlement documentation period, effectively extending the substantive restraints of the TRO on a consensual basis while the parties finalized the definitive settlement documentation.
March 24 – April 11, 2025: The parties engaged in an intensive settlement documentation period during which the definitive Standstill and Settlement Agreement and all related documentation were negotiated and finalized. Four rounds of drafts were exchanged among Calderwood & Harkness, WND, and Blackhall & Soren, as follows:
• First draft: March 24, 2025 — Prepared and circulated by Calderwood & Harkness on behalf of CRH.
• Second draft: March 31, 2025 — Reflecting the consolidated comments and redlines of WND (on behalf of the individual defendants) and Blackhall & Soren (on behalf of Verdana).
• Third draft: April 4, 2025 — Prepared by Calderwood & Harkness incorporating agreed revisions and counter-proposals on open issues.
• Fourth draft (near-final): April 8, 2025 — Near-final version reflecting resolution of substantially all remaining open issues.
• Execution version: April 14, 2025 — Final, fully executed version.
The key negotiation points that required resolution during the documentation period included: (i) the precise scope of the modified non-compete product categories, which ultimately were narrowed to three specific categories (home goods, seasonal décor, and private-label apparel) rather than the broader "all retail" scope of the original covenants; (ii) the mechanics of the data destruction certification, including the protocol for the independent forensic audit of Verdana's systems; (iii) the compliance monitor's access rights and the scope of information to be made available during the monitoring period; and (iv) the definition and delineation of the three restricted product categories, which required careful specification to ensure enforceability while accommodating the parties' commercial realities.
April 14, 2025: The Standstill and Settlement Agreement was fully executed by all parties. The Consent Order was entered by Vice Chancellor Margaret T. Zhao on the same date.
VI. Settlement Terms — Summary
The following is a summary of the material terms of the Standstill and Settlement Agreement executed on April 14, 2025. This summary is provided for reference purposes and does not supersede or modify the Settlement Agreement itself, which is the controlling document and is maintained in the matter file.
A. Parties to Settlement
The Settlement Agreement is entered into by and among Cascade Retail Holdings Inc., the eight individual defendants (Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson), and Verdana Commerce Group, Inc. The Settlement Agreement is governed by the laws of the State of Delaware, without regard to conflicts-of-law principles.
B. Modified Non-Compete Obligations
The Settlement Agreement modifies the non-competition covenants contained in the individual defendants' respective employment agreements as follows:
Priya Rathore: Ms. Rathore is subject to a 12-month modified non-competition covenant, reduced from the 18-month original term in her A&R Employment Agreement. The modified non-compete runs from February 7, 2025 (the date of her resignation from CRH) through February 6, 2026. The scope of the modified non-compete is limited to three specific product categories: (i) home goods, (ii) seasonal décor, and (iii) private-label apparel. This represents a significant narrowing from the original "all retail" scope of Ms. Rathore's non-compete, but it preserves CRH's core competitive interests in the categories most directly implicated by the coordinated departure and the trade secret misappropriation.
Other seven employees (Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson): The remaining seven individual defendants are each subject to 9-month modified non-competition covenants, reduced from their respective original terms of 12 or 18 months. The modified non-competes run from February 7, 2025 through November 6, 2025. The scope of the modified non-competes is limited to the same three product categories: home goods, seasonal décor, and private-label apparel.
The Settlement Agreement provides detailed definitions of each of the three restricted product categories, developed through negotiation among the parties, to minimize ambiguity and ensure enforceability. During the restricted periods, the individual defendants may be employed by Verdana in roles that do not involve the restricted product categories.
C. Non-Solicitation Obligations
Employee Non-Solicitation: All eight individual defendants agreed to an 18-month non-solicitation covenant with respect to CRH employees, running from February 7, 2025 through August 6, 2026. This covenant prohibits the defendants from directly or indirectly soliciting, recruiting, or inducing any employee of CRH to leave CRH's employ or to accept employment with Verdana or any other competitor.
Vendor Non-Solicitation: All eight individual defendants agreed to a 12-month non-solicitation covenant with respect to CRH's top 50 vendors (measured by annual spend), running from February 7, 2025 through February 6, 2026. This covenant prohibits the defendants from directly or indirectly soliciting, diverting, or interfering with CRH's relationships with the identified vendors. The list of the top 50 vendors is set forth in Exhibit C to the Settlement Agreement, which was filed under seal with the Court of Chancery due to the commercially sensitive nature of the vendor relationships and spend data.
D. Data Return and Destruction
The Settlement Agreement requires that all data exfiltrated from CRH's systems by the Rathore Group be returned to CRH or certified as destroyed within 10 business days of the execution of the Settlement Agreement (i.e., by approximately April 28, 2025). Each individual defendant is required to execute a certification attesting to the return or destruction of all CRH confidential information and trade secrets in his or her possession, custody, or control.
In addition, Verdana agreed to permit an independent forensic audit of Verdana's information systems by Pinnacle Forensics LLC to confirm that no CRH data resides on Verdana's servers, workstations, cloud environments, or other systems. The forensic audit is to be conducted at Verdana's expense, subject to a cap of $175,000. The protocol for the forensic audit, including scope, methodology, and timing, is detailed in Exhibit B to the Settlement Agreement.
E. Monetary Terms
The monetary terms of the settlement are summarized in the following table:
The cash settlement payment of $8,750,000 is payable by Verdana to CRH as a lump sum within 30 days of the execution date of the Settlement Agreement (i.e., by approximately May 14, 2025). The payment is to be made by wire transfer to an account designated by CRH.
The Rathore RSU forfeiture of $362,500 consists of two components. Ms. Rathore's RSU grant was $725,000, dated March 15, 2021, with four-year ratable annual vesting at 25% per year. Three annual tranches had vested prior to her resignation (March 15, 2022, March 15, 2023, and March 15, 2024), totaling 75% of the grant ($543,750). The remaining 25% ($181,250) was unvested as of her February 7, 2025 resignation and is forfeited under the Settlement Agreement. In addition, the for-cause clawback provision in the A&R Employment Agreement — which is triggered by a breach of restrictive covenant obligations — was invoked with respect to the final vested tranche ($181,250), resulting in a total forfeiture of $362,500 ($181,250 unvested plus $181,250 clawback).
The aggregate equity forfeiture of $487,000 for the remaining seven individual defendants represents the combined value of unvested equity awards and, where applicable, for-cause clawback amounts across those employees' respective equity grants.
The litigation cost reimbursement of $425,000, payable by Verdana to CRH, represents a partial offset to CRH's legal fees and expenses incurred in connection with the matter.
F. Compliance Monitor
The Settlement Agreement provides for the appointment of an independent compliance monitor to oversee compliance with the modified restrictive covenants and data-destruction obligations during a 12-month monitoring period. The compliance monitor is Aldwyn Compliance Solutions LLC, located at 1700 Market Street, Suite 2800, Philadelphia, Pennsylvania 19103.
The monitoring term is 12 months, commencing on April 14, 2025 and concluding on April 14, 2026. During the monitoring period, Aldwyn will conduct quarterly verification of compliance with the modified non-competition covenants, non-solicitation covenants, and data-destruction obligations. Aldwyn will prepare and distribute quarterly compliance reports to both CRH and Verdana.
The total cost of the compliance monitor engagement is $360,000, allocated as follows: Verdana will bear 60% ($216,000) and CRH will bear 40% ($144,000). An information-sharing and access framework was established pursuant to a separate letter agreement among CRH, Verdana, and Aldwyn, which governs the monitor's access to information and the procedures for conducting compliance reviews.
G. Non-Disparagement
The Settlement Agreement includes a mutual non-disparagement clause among CRH, the Rathore Group, and Verdana. The terms of the non-disparagement clause are set forth in Exhibit E to the Settlement Agreement. The clause prohibits each party from making or publishing any disparaging statements, written or oral, concerning any other party to the Settlement Agreement or any of its officers, directors, employees, or agents, subject to customary carve-outs for truthful testimony and legally compelled disclosures.
H. Attorneys' Fees
Except as specifically provided in the Settlement Agreement, each party bears its own attorneys' fees and costs incurred in connection with the matter. The sole exception is the $425,000 litigation cost reimbursement payable by Verdana to CRH, which is included in the total economic recovery to CRH set forth above.
VII. Court Filings and Dispositive Orders
A. Consent Order
On April 14, 2025, the parties jointly filed with the Delaware Court of Chancery a Stipulation of Settlement and Proposed Consent Order, accompanied by a joint transmittal letter to Vice Chancellor Margaret T. Zhao from Calderwood & Harkness LLP, Whitfield, Nygaard & Doyle LLP, and Blackhall & Soren LLP. The joint letter described the resolution of the matter and requested entry of the proposed Consent Order.
Vice Chancellor Zhao entered the Consent Order on April 14, 2025. The Consent Order incorporates the following material terms of the Settlement Agreement:
• The modified non-competition covenant obligations of each of the eight individual defendants, including the duration, geographic scope, and product-category limitations;
• The non-solicitation obligations with respect to both CRH employees and CRH's top 50 vendors;
• The data return and destruction obligations, including the requirement for a certified destruction within 10 business days and the independent forensic audit of Verdana's systems by Pinnacle Forensics LLC;
• The appointment of Aldwyn Compliance Solutions LLC as the independent compliance monitor for a 12-month term; and
• The quarterly compliance reporting obligations during the monitoring period.
Critically, the Consent Order provides that the Court of Chancery retains jurisdiction for the purpose of enforcing the terms of the Consent Order. This retained jurisdiction ensures that, in the event of any violation of the modified covenants, the data-destruction obligations, or any other term incorporated in the Consent Order, CRH may seek enforcement through contempt proceedings or other appropriate relief in the Court of Chancery without the need to initiate a new action.
B. Dissolution of TRO
On April 14, 2025, CRH filed a Motion to Dissolve the Temporary Restraining Order entered on March 7, 2025. The TRO was dissolved upon entry of the Consent Order, as the Consent Order supersedes the TRO restraints with the agreed modified covenant terms set forth in the Settlement Agreement. The dissolution of the TRO was without prejudice to CRH's rights under the Consent Order and the Settlement Agreement.
C. Release of Injunction Bond
On April 14, 2025, Calderwood & Harkness sent a letter to Broadview Surety Corp., at 175 Water Street, Suite 2400, New York, New York 10038, requesting the discharge of injunction bond No. BSC-2025-TRO-04419 in the amount of $2,500,000. The basis for the discharge request is the entry of the Consent Order and the dissolution of the TRO, which eliminated the need for the bond. As of the date of this memorandum, the bond release is pending confirmation of discharge by Broadview Surety Corp. Follow-up with Broadview is a continuing administrative item.
D. Stipulation for Dismissal
A Stipulation for Dismissal with Prejudice has been prepared and executed by all parties. Pursuant to the terms of the Settlement Agreement, the Stipulation for Dismissal will be held in escrow and will not be filed with the Court of Chancery until the conclusion of the 12-month compliance monitor period (target filing date: April 14, 2026). The filing of the Stipulation for Dismissal is contingent on full compliance with the Consent Order and the Settlement Agreement during the monitoring period. In the event of a material violation, CRH reserves the right to seek enforcement of the Consent Order in lieu of filing the dismissal.
VIII. Equity and Compensation Clawback Actions
In connection with the settlement, Calderwood & Harkness coordinated the following equity and compensation clawback actions:
Transfer Agent Notification: On April 14, 2025, Calderwood & Harkness sent a letter to Northland Trust Company (CRH's transfer agent), located at 55 Water Street, New York, New York 10041, directing the cancellation of all unvested RSU awards held by Priya Rathore and the other seven former employees in accordance with the terms of the Settlement Agreement and the applicable provisions of their respective employment agreements and equity award agreements. The letter included copies of the relevant settlement documentation and board resolution authorizing the cancellation.
Compensation Committee Notification: On April 10, 2025, Calderwood & Harkness transmitted a letter to the CRH Compensation Committee summarizing the equity clawback and forfeiture provisions of the proposed settlement, including the Rathore RSU forfeiture of $362,500 and the aggregate equity forfeiture of $487,000 for the remaining seven employees. The letter outlined the legal basis for the forfeiture and clawback actions, including the for-cause clawback provision triggered by breach of restrictive covenant obligations, and requested the Compensation Committee's concurrence.
Board Resolution: Calderwood & Harkness prepared a draft Board Resolution for consideration by the CRH Board of Directors, authorizing and ratifying the equity forfeiture and settlement terms. The Board Resolution was considered and adopted at a meeting of the CRH Board on April 14, 2025, with the recommendation of the Audit Committee and the Compensation Committee.
IX. Corporate Governance and Disclosure Notifications
A. Board and Audit Committee
In accordance with CRH's corporate governance protocols and the requirements of applicable securities laws, Calderwood & Harkness coordinated the following notifications to the CRH Board of Directors and Audit Committee:
March 4, 2025: Calderwood & Harkness sent a letter to Dr. Lorraine Stahl, in her capacity as Chair of the Audit Committee of the CRH Board of Directors, notifying the Audit Committee of the existence of the litigation contingency arising from the coordinated departure of the Rathore Group and the filing of the Verified Complaint. The letter recommended an initial accrual of $3,500,000 for the litigation contingency in accordance with ASC 450 (Contingencies), based on an assessment that a loss was probable and that the accrual amount represented a reasonable estimate of the potential exposure at that stage of the proceedings.
April 10, 2025: Calderwood & Harkness transmitted a comprehensive memorandum to the CRH Board of Directors summarizing the terms of the proposed settlement and recommending board approval. The memorandum addressed the modified restrictive covenants, the monetary terms, the compliance monitor arrangement, and the implications of the settlement for CRH's competitive position and financial statements.
April 14, 2025: The CRH Board of Directors, upon the recommendation of the Audit Committee, adopted a resolution ratifying the settlement, authorizing the execution of the Settlement Agreement, authorizing the equity forfeitures and clawback actions, and directing CRH's officers to take all actions necessary to implement the terms of the settlement.
B. SEC Disclosure
April 9, 2025: Calderwood & Harkness prepared a memorandum analyzing CRH's disclosure obligations in connection with the settlement under applicable securities laws, including:
• Form 8-K: Analysis of whether the settlement constitutes a reportable event under Item 8.01 ("Other Events") of Form 8-K, warranting voluntary disclosure to ensure the completeness and accuracy of the Company's public disclosures.
• Form 10-Q: Analysis of the settlement as a subsequent event for purposes of CRH's Q1 2025 Form 10-Q, including the appropriate treatment of the litigation contingency accrual and the recognition of the settlement recovery.
A materiality analysis was performed, assessing the total economic recovery of $10,024,500 against CRH's FY2024 revenue of $6.82 billion and approximate market capitalization of $4.1 billion as of February 2025. While the settlement amount is not material in the context of CRH's overall financial profile on a purely quantitative basis, the matter was assessed as potentially qualitatively significant given the competitive implications of the coordinated departure, the public visibility of Verdana's recruitment campaign, and the investor interest in the stability of CRH's merchandising leadership team.
April 11, 2025: Calderwood & Harkness prepared draft 8-K language describing the settlement of C.A. No. 2025-0198-MTZ for CRH's consideration. The draft disclosure was provided to Theresa Yun-Park for review and filing. The filing responsibility for the 8-K remains with CRH's in-house legal department.
Auditor Notification: CRH's outside auditors, Hargrove & Tillett CPA, PLLC (lead audit partner: Denise Wheatley), were notified regarding the litigation contingency accrual adjustment resulting from the settlement. The notification ensures that the settlement will be appropriately reflected in CRH's financial statements, including the reversal or adjustment of the initial $3,500,000 accrual in light of the favorable settlement outcome.