1038-00006 · Calderwood & Harkness LLP · Court Filings

memorandum-of-law-tro-pi.docx DOCUMENT Finance & Banking

26 / 79 ← → ✕

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

Filed: March 5, 2025

Bernard Crawford (Del. Bar No. 5284), Responsible Partner Renata Vasquez (Del. Bar No. 6107), Billing Partner James Underwood (Del. Bar No. 6893), Lead Associate Devon Archer (Del. Bar No. 7241), Working Associate CALDERWOOD & HARKNESS LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7200 Facsimile: (202) 555-7201

601 South Figueroa Street, Suite 4200 Los Angeles, CA 90017 Telephone: (213) 555-4400

Attorneys for Plaintiff Cascade Retail Holdings Inc.

TABLE OF AUTHORITIES

Cases:

Statutes:

Treatises and Other Authorities:

I. PRELIMINARY STATEMENT

Cascade Retail Holdings Inc. ("CRH" or "Cascade"), a publicly traded omnichannel retailer listed on the Nasdaq Global Select Market (ticker: CRHL) with fiscal year 2024 revenues of $6.82 billion and 387 brick-and-mortar retail locations across 34 states, respectfully brings this emergency motion for a temporary restraining order and preliminary injunction. CRH seeks the immediate intervention of this Court to enforce the restrictive covenant and confidentiality obligations contained in employment agreements voluntarily executed by eight former senior merchandising employees who engaged in a coordinated, premeditated scheme to abandon CRH, steal its most competitively sensitive trade secrets, and defect en masse to a direct competitor — all in flagrant breach of their contractual obligations.

On February 7, 2025, at precisely 4:47 PM Pacific Standard Time — at the close of business on a Friday, timing chosen with surgical precision to maximize disruption and minimize CRH's ability to respond — all eight employees submitted simultaneous resignation letters, effective immediately. The coordinated nature of these resignations was no coincidence. The departures were orchestrated by Defendant Priya Rathore, CRH's former Senior Vice President of Merchandising and the most senior non-C-suite executive in CRH's merchandising division, which generated $2.3 billion in gross merchandise value in FY2024.

The departing employees — collectively referred to as the "Rathore Group" — immediately defected to Defendant Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor headquartered in Wilmington, Delaware, which publicly announced the hires one week later on February 14, 2025. Verdana is a privately held omnichannel retailer majority-owned by Greystone Capital Partners, LP, a private equity firm that acquired its controlling stake through Greystone Capital Fund VII, LP in Q3 2023 for an enterprise value of $2.4 billion. Verdana directly competes with CRH in 28 overlapping product categories and, in January 2025 — barely a month before the Rathore Group's mass departure — publicly announced a "transformational growth initiative" specifically targeting CRH's strongest and most profitable categories: private-label home goods and seasonal décor.

The Rathore Group did not leave empty-handed. During their employment at CRH, these eight individuals had unrestricted access to CRH's most competitively sensitive information, including a proprietary five-year category expansion strategy known internally as "Project Ridgeline," vendor negotiation playbooks detailing terms and leverage points for CRH's most critical supplier relationships, seasonal buying algorithms developed over years of iterative refinement, private-label sourcing strategies covering margin targets and manufacturing partnerships, and customer segmentation data encompassing millions of consumer profiles. Forensic analysis conducted by Pinnacle Forensics LLC confirms that, in the weeks immediately preceding their departure, the Rathore Group systematically exfiltrated 14,327 files comprising approximately 2.8 gigabytes of confidential data from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts. The exfiltration began on January 10, 2025 — just four days after a private dinner in New York City between Rathore, Verdana CEO Warren Dietrich, and Greystone Managing Partner Elliot Westbrook — and continued through February 4, 2025, three days before the coordinated resignations.

The scheme was richly funded. Verdana, backed by Greystone Capital Partners, offered the eight members of the Rathore Group aggregate sign-on bonuses totaling $6.2 million — a staggering sum that can be explained only as the price Verdana and Greystone were willing to pay to strip CRH of its entire senior merchandising leadership and acquire, through that raiding, CRH's most valuable proprietary strategies and relationships.

Each of the departing employees signed an employment agreement governed by Delaware law containing a restrictive covenant with non-competition periods ranging from 12 to 18 months, non-solicitation periods ranging from 18 to 24 months, and perpetual confidentiality obligations. These covenants were supported by substantial consideration including initial and continued employment, promotions, salary increases, annual performance bonuses, restricted stock unit grants, and access to the very confidential information the Rathore Group has now stolen. Each employee knowingly and voluntarily accepted these obligations as a condition of the benefits conferred upon them. Having accepted those benefits, they cannot now discard their contractual obligations simply because a competitor has offered them a richer deal.

CRH therefore respectfully moves this Court for a temporary restraining order and preliminary injunction restraining the Individual Defendants from commencing or continuing employment in merchandising or related roles at Verdana, restraining Verdana from employing the Individual Defendants in any such capacity, and requiring the preservation and immediate return of all exfiltrated confidential information and trade secrets. CRH asserts five causes of action supporting this emergency relief: (1) breach of restrictive covenant; (2) breach of confidentiality obligations; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA"), 6 Del. C. §§ 2001–2009; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all Defendants.

As set forth below, CRH satisfies each element of the standard for emergency injunctive relief. It has demonstrated a strong likelihood of success on the merits of each claim; it will suffer irreparable harm absent an injunction — harm that is ongoing and compounds with every passing day; the balance of hardships overwhelmingly favors CRH over defendants who voluntarily assumed the very obligations they now seek to evade; and the public interest is served by enforcing valid contracts, deterring coordinated employee raiding, and protecting the incentives that underpin innovation and investment.

II. STATEMENT OF FACTS

The following facts are drawn from the Verified Complaint (Dkt. 1), the accompanying declarations of Theresa Yun-Park, General Counsel of CRH (the "Yun-Park Declaration"), Roland Ashby, Chief People Officer of CRH (the "Ashby Declaration"), Dr. Rajiv Anand, Engagement Lead, Pinnacle Forensics LLC (the "Anand Declaration"), and Sandra Fielding, Lead Investigator, Aurelian Investigations Group Inc. (the "Fielding Declaration"), and the exhibits attached thereto.

A. The Parties

1. Plaintiff Cascade Retail Holdings Inc. Cascade Retail Holdings Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH's registered agent for service of process in Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. CRH's Employer Identification Number is 91-2847351.

CRH is publicly traded on the Nasdaq Global Select Market under the ticker symbol "CRHL." CRH operates as an omnichannel retailer, maintaining 387 brick-and-mortar retail locations across 34 states and a robust direct-to-consumer ecommerce platform. For the fiscal year ended January 31, 2025 ("FY2024"), CRH reported total revenues of approximately $6.82 billion. As of February 2025, CRH's approximate market capitalization was $4.1 billion.

CRH's merchandising division is the strategic core of the Company. In FY2024, the merchandising division accounted for approximately $2.3 billion in gross merchandise value ("GMV"), encompassing product categories including home goods, seasonal décor, hardlines, softlines, private-label brands, and ecommerce assortment. The merchandising division is responsible for all product sourcing, vendor negotiations, category management, private-label development, pricing strategy, and inventory planning. The loss of the division's entire senior leadership team — and the trade secrets and proprietary strategies those leaders took with them — strikes at the heart of CRH's competitive position.

CRH's Chief Executive Officer is Marcus Langford. Its General Counsel is Theresa Yun-Park. Its Chief People Officer is Roland Ashby. Yun-Park Decl. ¶¶ 2–5; Ashby Decl. ¶¶ 2–4.

2. Individual Defendants — The Rathore Group. The eight Individual Defendants — collectively the "Rathore Group" — are former CRH employees who, prior to their February 7, 2025 resignations, comprised the entire senior leadership team of CRH's merchandising division. Each Individual Defendant signed an employment agreement with CRH containing restrictive covenant provisions governed by Delaware law. The Individual Defendants are as follows:

Priya Rathore. Defendant Rathore served as CRH's Senior Vice President of Merchandising from March 15, 2021 through February 7, 2025. She was initially hired as Vice President of Merchandising on June 3, 2019 and was promoted to SVP effective March 15, 2021. In the SVP role, Rathore was the most senior non-C-suite executive in CRH's merchandising organization. She reported directly to CEO Marcus Langford and had full strategic oversight of CRH's $2.3 billion merchandising division. In FY2024, Rathore's base salary was $485,000, her target annual bonus was $290,000 (representing 60% of base salary), and she held an outstanding restricted stock unit grant with a face value of $725,000, subject to four-year ratable annual vesting from her March 15, 2021 promotion date. Rathore executed an initial Employment Agreement on June 3, 2019 (the "Initial Rathore Agreement") and an Amended and Restated Employment Agreement on March 15, 2021 (the "A&R Rathore Agreement"). The A&R Rathore Agreement, which superseded the Initial Rathore Agreement in its entirety, contains an 18-month non-competition clause with nationwide (United States) geographic scope, a 24-month non-solicitation clause covering both CRH employees and vendors, and perpetual confidentiality obligations. In connection with her promotion, Rathore received a $150,000 promotion bonus and the enhanced RSU grant referenced above, both of which constituted additional consideration for the restrictive covenants in the A&R Rathore Agreement. Rathore resides at 14 Harbor Ridge Lane, Bellevue, Washington 98004. Yun-Park Decl. ¶¶ 8–12; Ashby Decl. ¶¶ 8–13; Ex. A (Initial Rathore Agreement); Ex. B (A&R Rathore Agreement).

Derek Linden. Defendant Linden served as CRH's Vice President of Hardlines Merchandising, a position he held for approximately seven years. In that role, Linden was responsible for overseeing all hardlines category management, vendor negotiations, and buying strategies. His FY2024 base salary was $340,000. Linden's employment agreement contains an 18-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 14; Ex. C (Linden Employment Agreement).

Sonia Kaczmarek. Defendant Kaczmarek served as CRH's Vice President of Softlines Merchandising for approximately five years. She oversaw all softlines product categories, including apparel, textiles, and related accessories. Her FY2024 base salary was $325,000. Kaczmarek's employment agreement contains an 18-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 15; Ex. D (Kaczmarek Employment Agreement).

Amara Osei. Defendant Osei served as CRH's Director of Private Label Strategy for approximately four years. In that role, she led the development and execution of CRH's private-label brand portfolio, including sourcing, margin optimization, and new brand launches. Her FY2024 base salary was $265,000. Osei's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 16; Ex. E (Osei Employment Agreement).

Brent Halvorsen. Defendant Halvorsen served as CRH's Director of Seasonal Planning & Analytics for approximately six years. He was responsible for CRH's seasonal merchandise planning, demand forecasting, and proprietary buying algorithms. His FY2024 base salary was $258,000. Halvorsen's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 17; Ex. F (Halvorsen Employment Agreement).

Lucia Fernandez-Gill. Defendant Fernandez-Gill served as CRH's Director of Vendor Relations (Domestic) for approximately five years. She managed CRH's relationships with its top domestic suppliers, including all pricing negotiations, contract renewals, and exclusivity arrangements. Her FY2024 base salary was $248,000. Fernandez-Gill's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 18; Ex. G (Fernandez-Gill Employment Agreement).

Nathan Tsao. Defendant Tsao served as CRH's Senior Manager of eCommerce Merchandising for approximately three years. He was responsible for CRH's online assortment strategy, ecommerce merchandising algorithms, and digital category management. His FY2024 base salary was $195,000. Tsao's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 19; Ex. H (Tsao Employment Agreement).

Kira Johansson. Defendant Johansson served as CRH's Senior Manager of Category Analytics for approximately four years. She was responsible for developing and implementing CRH's proprietary customer segmentation models and category performance analytics. Her FY2024 base salary was $192,000. Johansson's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 20; Ex. I (Johansson Employment Agreement).

In the aggregate, the Rathore Group's FY2024 base salaries totaled in excess of $2.3 million. Each member of the Rathore Group was a key participant in the development and execution of CRH's merchandising strategies. Together, they represented the institutional knowledge, vendor relationships, and strategic vision of CRH's most important business unit. Their simultaneous departure left CRH without any senior merchandising leadership — a void that cannot be filled overnight and that was plainly intended to cripple CRH's competitive position. Yun-Park Decl. ¶¶ 14–15.

3. Defendant Verdana Commerce Group, Inc. Verdana Commerce Group, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana's Employer Identification Number is 51-3982647. Verdana is a privately held omnichannel retailer operating in the home goods, apparel, and seasonal décor product categories — the same core categories in which CRH competes. Verdana's estimated revenue for FY2024 was approximately $1.9 billion.

Verdana is majority-owned by Greystone Capital Partners, LP, a New York-based private equity firm operating through Greystone Capital Fund VII, LP (vintage 2022; $8.5 billion in committed capital). Greystone's Managing Partner is Elliot Westbrook, and its principal office is located at 680 Park Avenue, 22nd Floor, New York, New York 10065. Greystone acquired its controlling stake in Verdana in Q3 2023 for an enterprise value of approximately $2.4 billion.

Verdana's Chief Executive Officer is Warren Dietrich, and its General Counsel is Helen Tsoi. Verdana directly competes with CRH in 28 overlapping product categories, including the private-label home goods and seasonal décor categories that constitute CRH's core competitive strengths. Yun-Park Decl. ¶¶ 16–20.

In January 2025, Verdana issued a public statement announcing a "transformational growth initiative" aimed at expanding Verdana's footprint from approximately $1.9 billion in revenue to $4 billion by 2028. The announcement specifically identified private-label home goods and seasonal décor as the categories Verdana would target for accelerated growth — CRH's strongest and most strategically significant categories. This announcement, made just weeks before the Rathore Group's defection, confirmed that Verdana's growth strategy was built upon the premise of directly attacking CRH's competitive advantages and that Verdana intended to leverage the knowledge and expertise of CRH's former merchandising leaders to execute that strategy. Yun-Park Decl. ¶ 21; Ex. J (Verdana Public Statement, January 2025).

B. The Employment Agreements and Restrictive Covenants

Each of the eight Individual Defendants entered into a written employment agreement with CRH that is governed by Delaware law and contains restrictive covenant provisions including non-competition, non-solicitation, and confidentiality obligations. These agreements are central to CRH's claims and are attached to the Yun-Park Declaration as Exhibits A through I.

The Rathore Agreements. Defendant Rathore's contractual obligations are set forth in two agreements. The Initial Rathore Agreement, executed on June 3, 2019, governed Rathore's employment as Vice President of Merchandising. When Rathore was promoted to Senior Vice President of Merchandising on March 15, 2021, she executed the A&R Rathore Agreement, which superseded the Initial Rathore Agreement in its entirety and contained updated and enhanced restrictive covenant provisions commensurate with Rathore's expanded role and access to additional confidential information. Yun-Park Decl. ¶ 9; Exs. A, B.

Section 7(a) of the A&R Rathore Agreement contains a non-competition covenant that provides, in relevant part:

During the Restricted Period, Executive shall not, directly or indirectly, engage in, assist, or have any interest in (whether as owner, partner, consultant, employee, or otherwise) any Competing Business within the Restricted Territory. For purposes of this Agreement, (i) "Restricted Period" means the period commencing on the Date of Termination and ending on the date that is eighteen (18) months following the Date of Termination; (ii) "Competing Business" means any person, firm, corporation, or other entity engaged in the business of omnichannel retail, wholesale, or ecommerce in product categories that are the same as or substantially similar to the product categories in which the Company operates as of the Date of Termination; and (iii) "Restricted Territory" means the United States of America.

Ex. B, § 7(a).

Section 7(b) of the A&R Rathore Agreement contains a non-solicitation covenant that provides:

During the period commencing on the Date of Termination and ending on the date that is twenty-four (24) months following the Date of Termination, Executive shall not, directly or indirectly: (i) solicit, recruit, or induce any employee of the Company to terminate his or her employment with the Company or to accept employment with any Competing Business; or (ii) solicit, divert, or take away, or attempt to solicit, divert, or take away, any Vendor of the Company for the benefit of any Competing Business.

Ex. B, § 7(b).

Section 8 of the A&R Rathore Agreement contains perpetual confidentiality obligations that provide:

Executive acknowledges that during the course of Executive's employment with the Company, Executive will have access to and become acquainted with Confidential Information. Executive agrees that, during Executive's employment and at all times thereafter, Executive shall not, directly or indirectly, use, disclose, or make available to any third party any Confidential Information, except as required in the performance of Executive's duties for the Company. "Confidential Information" includes, without limitation, trade secrets, proprietary data, business plans, strategic initiatives, vendor terms and pricing, customer data, product development plans, financial information and projections, marketing strategies, and any other information designated as confidential by the Company or that Executive reasonably should understand to be confidential.

Ex. B, § 8.

In exchange for these restrictive covenants, Rathore received substantial consideration under the A&R Rathore Agreement, including: (i) her promotion from VP to SVP of Merchandising, with attendant expansion of responsibilities and authority; (ii) a $150,000 one-time promotion bonus; (iii) a restricted stock unit grant with a face value of $725,000, subject to four-year ratable annual vesting from March 15, 2021; (iv) an increase in her base salary to $485,000; (v) an increase in her target annual bonus to 60% of base salary ($290,000); and (vi) continued access to CRH's most confidential and proprietary information, including materials that were not previously accessible to Rathore in her VP-level role. Yun-Park Decl. ¶¶ 10–12; Ashby Decl. ¶¶ 10–13.

The Other Seven Employment Agreements. The remaining seven Individual Defendants each signed employment agreements with CRH containing restrictive covenants governed by Delaware law. While the specific terms vary based on seniority and role, all seven agreements contain: (i) non-competition covenants with nationwide (United States) geographic scope and durations of either 12 or 18 months; (ii) non-solicitation covenants of 18 to 24 months covering CRH employees and vendors; and (iii) perpetual confidentiality obligations that mirror the substance of the confidentiality provisions in the A&R Rathore Agreement. Yun-Park Decl. ¶ 13; Exs. C–I.

The following table summarizes the key covenant parameters for all eight Individual Defendants:

Each of these restrictive covenants was supported by adequate consideration. For the employees who signed their agreements at the time of initial hire, the offer of employment itself constituted adequate consideration under Delaware law. For those employees whose agreements were entered into or amended during the course of employment, additional consideration was provided in the form of promotions, salary increases, bonuses, equity grants, and expanded access to confidential information. CRH's practice, administered through the office of Chief People Officer Roland Ashby, was to require execution of updated employment agreements containing appropriate restrictive covenants whenever an employee was promoted to a director-level or above position or was granted access to a new category of confidential information. Ashby Decl. ¶¶ 6–7.

C. CRH's Confidential Information and Trade Secrets

CRH's merchandising division, which generated $2.3 billion in GMV in FY2024, is the Company's most strategically significant business unit and the source of its primary competitive advantages. The success of the merchandising division depends critically upon the confidentiality of certain proprietary strategies, algorithms, data sets, and relationship frameworks that CRH has developed over many years at substantial expense.

In October 2024, CRH's merchandising division completed a comprehensive five-year strategic category expansion plan known internally as "Project Ridgeline." Project Ridgeline was the product of approximately eighteen months of intensive work by the Rathore Group and other senior leaders, drawing upon CRH's accumulated proprietary data, market intelligence, and strategic experience. The plan was approved by CRH's Board of Directors in November 2024. Project Ridgeline encompasses:

(a) A detailed five-year roadmap for category expansion into new and adjacent product categories, including market sizing, competitive analysis, and projected revenue and margin contribution;

(b) Proprietary vendor negotiation playbooks containing CRH's historical and current vendor terms, pricing leverage points, volume discount thresholds, exclusivity arrangements, and preferred negotiation strategies for CRH's top 200 domestic and international vendors;

(c) Private-label margin targets and sourcing strategies, including manufacturing partner identities, cost structures, landed cost models, and planned private-label brand launches through FY2029;

(d) Seasonal buying algorithms developed by Defendant Halvorsen and his team over a period of six years, reflecting iterative refinement based on historical demand data, weather pattern analysis, regional preference modeling, and promotional calendar optimization;

(e) eCommerce assortment algorithms developed by Defendant Tsao and his team, incorporating machine-learning-based product ranking, conversion optimization, and dynamic pricing models; and

(f) Customer segmentation data comprising over 22 million consumer profiles with purchase history, demographic attributes, engagement metrics, and predictive lifetime value scores.

Yun-Park Decl. ¶¶ 22–28.

The Rathore Group had full, unrestricted access to all elements of Project Ridgeline. Rathore personally supervised the development of the plan and presented it to CRH's Board of Directors. Each of the other seven Individual Defendants contributed to or had access to the components of Project Ridgeline that related to their respective functional areas. Yun-Park Decl. ¶ 29.

CRH has at all relevant times maintained these materials as confidential through multiple layers of security and access control. Specifically, CRH employed the following measures: (i) all Project Ridgeline materials were stored on CRH's secure Aldermere Systems environment with role-based access controls limiting access to authorized personnel; (ii) password protections and multi-factor authentication were required for access to the Aldermere Systems and Pinnacle Health IT environments in which these materials were housed; (iii) all employees with access to Project Ridgeline materials were required to sign the confidentiality provisions of their employment agreements; (iv) access was granted on a need-to-know basis, with authorization approved by Rathore or a member of CRH's executive leadership team; and (v) all Project Ridgeline documents were marked "Confidential – Internal Use Only" in accordance with CRH's Information Classification Policy (CRH Policy No. IT-2022-017). Yun-Park Decl. ¶¶ 30–32; Ex. K (CRH Information Classification Policy).

These materials derive independent economic value from not being generally known or readily ascertainable by proper means. Project Ridgeline's five-year roadmap, vendor negotiation playbooks, private-label cost models, seasonal buying algorithms, ecommerce assortment algorithms, and customer segmentation data together represent years of accumulated investment and institutional knowledge. If disclosed to a competitor, these materials would enable that competitor to replicate CRH's strategic advantages without investing the time, capital, and effort that CRH expended in developing them. Yun-Park Decl. ¶¶ 33–35.

D. The Coordinated Departure

The departure of the Rathore Group was not a spontaneous event. It was the product of a carefully planned and executed conspiracy between the Individual Defendants and Verdana, orchestrated over a period of approximately five weeks.

January 6, 2025 — The Dinner Meeting. On January 6, 2025, Verdana CEO Warren Dietrich and Greystone Capital Partners Managing Partner Elliot Westbrook met with Defendant Rathore for a private dinner at the Gramercy Club, a private dining club located at 50 East 20th Street, New York, New York 10003. The meeting was confirmed through the investigation conducted by Aurelian Investigations Group Inc., led by Sandra Fielding. According to Fielding's investigation, the dinner lasted approximately two and one-half hours and concluded at approximately 10:30 PM Eastern Time. No other CRH employees were aware of or invited to the meeting. Fielding Decl. ¶¶ 8–14; Ex. L (Aurelian Investigative Summary).

The dinner meeting between Dietrich, Westbrook, and Rathore marks the beginning of the conspiracy. Within four days, the data exfiltration from CRH's systems commenced.

January 10, 2025 — Exfiltration Begins. On January 10, 2025, the first batch of confidential files was downloaded from CRH's Aldermere Systems environment to personal cloud storage accounts associated with members of the Rathore Group. Anand Decl. ¶ 12.

January 13–24, 2025 — Encrypted Communications. Forensic analysis of CRH-issued devices conducted by Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, revealed a series of encrypted messaging exchanges between Rathore and the other seven members of the Rathore Group during the period January 13 through January 24, 2025. While the content of the encrypted messages could not be fully recovered, metadata analysis confirmed the timing, frequency, and participants of these exchanges. The communications intensified in the days leading up to the signing of Verdana offer letters and were consistent with coordinating the departure timing and logistics. Anand Decl. ¶¶ 15–19.

January 27, 2025 — Rathore Signs Verdana Offer Letter. On January 27, 2025, Rathore signed an offer letter from Verdana for the position of President, Merchandising & Strategy, reporting directly to Verdana CEO Warren Dietrich. The terms of Rathore's Verdana offer included: a base salary of $650,000 (a 34% increase over her CRH base); a sign-on bonus of $1,500,000; an annual target bonus of 80% of base salary ($520,000); and equity of 1.5% of fully diluted Verdana Commerce Group, Inc. equity. Fielding Decl. ¶¶ 20–22; Ex. M (Rathore Verdana Offer Letter, obtained through investigation).

January 28 – February 4, 2025 — Remaining Defendants Sign Offer Letters. Between January 28 and February 4, 2025, the remaining seven Individual Defendants signed offer letters with Verdana for merchandising, strategy, and analytics roles closely mirroring their former CRH positions. The aggregate sign-on bonuses for the remaining seven defendants totaled approximately $4,700,000. Combined with Rathore's $1,500,000 sign-on bonus, the total sign-on bonuses paid or committed by Verdana to the Rathore Group aggregated $6,200,000. Fielding Decl. ¶¶ 23–26.

The magnitude of these sign-on bonuses — totaling $6.2 million for eight hires, funded by Greystone Capital Partners through Verdana — is extraordinary by any measure and far exceeds market norms for comparable retail merchandising roles. This extraordinary compensation evidences a premeditated scheme to strip CRH of its entire senior merchandising leadership and to acquire, through that wholesale raiding, CRH's proprietary strategies, trade secrets, and vendor and employee relationships. The sign-on bonuses functioned as an inducement to breach — a financial incentive designed to overcome whatever reluctance the Individual Defendants might have had about violating their contractual obligations to CRH. Yun-Park Decl. ¶¶ 36–38.

E. Data Exfiltration

The forensic evidence of data exfiltration is extensive and damning. Pinnacle Forensics LLC, a nationally recognized digital forensics firm, was engaged by CRH on February 20, 2025 to conduct forensic imaging and analysis of CRH's Aldermere Systems and Pinnacle Health IT environments, as well as CRH-issued devices previously assigned to members of the Rathore Group. The forensic analysis was conducted under the direction of Dr. Rajiv Anand, the Engagement Lead at Pinnacle Forensics.

Dr. Anand's analysis confirmed that between January 10 and February 4, 2025, a total of 14,327 files comprising approximately 2.8 gigabytes of data 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 downloads were traced to user accounts associated with specific Individual Defendants and to IP addresses linked to personal devices and home networks. Anand Decl. ¶¶ 10–14.

The exfiltrated materials include, but are not limited to:

(a) The complete Project Ridgeline presentation suite (168 files), including the five-year strategic roadmap, category expansion analyses, and Board-approved execution timeline;

(b) Vendor negotiation term sheets for CRH's top 200 domestic and international vendors (312 files), including current pricing, volume discount structures, exclusivity terms, and negotiation leverage assessments;

(c) Private-label cost models (87 files), including manufacturing partner identities, landed cost calculations, margin targets by SKU category, and planned brand launch schedules;

(d) Customer segmentation data exports (42 files), including consumer demographic profiles, purchase history summaries, predictive lifetime value scores, and behavioral clustering outputs;

(e) Seasonal buying algorithm documentation and model specifications (29 files); and

(f) eCommerce assortment algorithm code documentation and performance analytics (23 files).

Anand Decl. ¶¶ 20–28; Ex. N (Pinnacle Forensics File Inventory Summary).

The exfiltration was systematic and targeted. The files were not randomly selected; rather, they were drawn from the most competitively sensitive categories of CRH's proprietary information. The pattern of downloads confirms a deliberate effort to acquire CRH's most valuable trade secrets for use at Verdana. Notably, the exfiltration commenced on January 10, 2025 — just four days after the January 6 dinner meeting between Rathore, Dietrich, and Westbrook — and continued through February 4, 2025, just three days before the coordinated resignations. Anand Decl. ¶¶ 29–31.

F. The Simultaneous Resignations

On February 7, 2025, a Friday, all eight members of the Rathore Group submitted resignation letters via email to CRH's Human Resources department at exactly 4:47 PM Pacific Standard Time. The resignation letters were submitted simultaneously — literally at the same minute — and each stated that the resignation was effective immediately. The emails bore no explanation for the departures beyond formulaic language expressing appreciation for the "opportunity" at CRH. Ashby Decl. ¶¶ 20–22; Ex. O (Resignation Emails).

The coordinated timing was not coincidental. The submission of eight simultaneous resignation letters at 4:47 PM on a Friday afternoon — at the close of the business week — was designed to maximize disruption to CRH's operations and to minimize CRH's ability to respond before the weekend. By the time CRH's leadership was able to fully assess the situation, the Rathore Group had already departed and was preparing to assume their new positions at Verdana.

On Monday, February 10, 2025, CRH Chief People Officer Roland Ashby alerted General Counsel Theresa Yun-Park to the simultaneous departures. Ashby's initial review of the departing employees' records immediately raised concerns about the restrictive covenant implications. Ashby Decl. ¶ 23; Yun-Park Decl. ¶ 40.

On February 12, 2025, CRH's in-house legal team, led by Yun-Park, completed its initial review and confirmed the existence and terms of the restrictive covenant provisions in each departing employee's employment agreement. On the same day, CRH's Information Technology department, acting on a directive from Yun-Park, conducted an independent audit of system access logs and identified the pattern of data exfiltration described above. Yun-Park Decl. ¶¶ 41–43.

G. Verdana's Public Announcement

On February 14, 2025 — Valentine's Day, and precisely one week after the coordinated resignations — Verdana Commerce Group, Inc. issued a press release entitled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth." The press release publicly announced the hiring of Priya Rathore as President, Merchandising & Strategy and the addition of "seven additional senior merchandising professionals" from an unnamed "industry leader." Yun-Park Decl. ¶ 44; Ex. P (Verdana Press Release, Feb. 14, 2025).

The press release specifically referenced Verdana's expansion into CRH's strongest categories. Verdana CEO Warren Dietrich was quoted as stating: "We are building a world-class merchandising organization to drive Verdana's next phase of transformational growth, particularly in private-label home goods and seasonal décor — categories where we see enormous untapped opportunity." This language precisely mirrored the January 2025 announcement of Verdana's "transformational growth initiative" and left no doubt that the Rathore Group was being hired to perform at Verdana the same functions they performed at CRH, using the same knowledge, strategies, and relationships they developed at CRH's expense. Yun-Park Decl. ¶ 45.

The timing and content of this announcement confirmed CRH's worst fears: Verdana had engineered the departure of CRH's entire senior merchandising leadership and intended to deploy them — together with CRH's trade secrets — in direct competition with CRH in its most strategically significant product categories.

H. Post-Resignation Actions

CRH acted expeditiously to protect its rights upon confirming the scope and nature of the Rathore Group's coordinated departure and data exfiltration.

On February 18, 2025, CRH retained Calderwood & Harkness LLP as outside litigation counsel (Matter No. 1038-00006). Yun-Park Decl. ¶ 46.

On February 20, 2025, CRH engaged Pinnacle Forensics LLC, a nationally recognized digital forensics firm, to conduct forensic imaging and analysis of CRH's systems and the CRH-issued devices previously assigned to the Rathore Group. The engagement was led by Dr. Rajiv Anand. Yun-Park Decl. ¶ 47; Anand Decl. ¶¶ 3–5.

On February 21, 2025, CRH engaged Aurelian Investigations Group Inc. to investigate the circumstances of the Rathore Group's recruitment by Verdana. The investigation was led by Sandra Fielding, a former federal law enforcement officer with over twenty years of experience in corporate investigations. Yun-Park Decl. ¶ 48; Fielding Decl. ¶¶ 3–6.

On February 25, 2025, CRH, through Calderwood & Harkness LLP, sent cease-and-desist letters to: (i) each of the eight Individual Defendants, demanding immediate compliance with their restrictive covenant obligations, preservation of all CRH confidential information, and return of all CRH property; (ii) Verdana Commerce Group, Inc., attention Helen Tsoi, General Counsel, demanding that Verdana cease employing the Individual Defendants in any capacity that would violate their restrictive covenants or utilize CRH's confidential information; and (iii) Greystone Capital Partners, LP, attention Elliot Westbrook, Managing Partner, notifying Greystone of its potential exposure for funding and facilitating the tortious interference and conspiracy. Yun-Park Decl. ¶ 49; Ex. Q (Cease-and-Desist Letters).

On February 27, 2025, counsel entered appearances on behalf of the Defendants: Whitfield, Nygaard & Doyle LLP (Catherine Nygaard, Lead Partner; Travis Beaumont, Associate; 1000 North Market Street, Suite 1500, Wilmington, Delaware 19801) entered an appearance on behalf of the eight Individual Defendants; and Blackhall & Soren LLP (Gavin Blackhall, Lead Partner; Meredith Lau, Senior Associate; 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801) entered an appearance on behalf of Verdana Commerce Group, Inc.

On March 3, 2025, CRH engaged Veltrano Consulting Group LLC (Dr. Franklin Oberg, Lead Expert; 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606) as its economic damages expert to assess the financial harm caused by the Defendants' conduct. Yun-Park Decl. ¶ 50.

CRH filed its Verified Complaint and this emergency motion on March 5, 2025.

III. LEGAL STANDARD

The Court of Chancery possesses broad equitable authority to grant temporary restraining orders and preliminary injunctions to preserve the status quo and prevent irreparable harm pending a full hearing on the merits. See Del. Ch. Ct. R. 65(b); Tavrenis v. Allen, 277 A.3d 296, 312 (Del. Ch. 2022); ThoughtWorks, Inc. v. SV Inv. Partners, LLC, 902 A.2d 745, 753 (Del. Ch. 2006).

To obtain a temporary restraining order or preliminary injunction, the movant must demonstrate: (1) a reasonable probability of success on the merits of its claims; (2) an imminent threat of irreparable harm that will occur before a final hearing on the merits; (3) that the balance of hardships tips in the movant's favor; and (4) that the injunction will serve the public interest. Tavrenis, 277 A.3d at 312; ThoughtWorks, 902 A.2d at 753; see also Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 10.03 (2d ed. 2024).

A temporary restraining order may issue upon an ex parte showing of exigent circumstances that make notice to the adverse party impracticable. Del. Ch. Ct. R. 65(b). In the present case, while CRH has provided notice to Defendants' counsel of this motion, CRH respectfully submits that the ongoing nature of the harm — including the risk of further dissemination and use of exfiltrated trade secrets — warrants the most expedited consideration this Court can provide. CRH anticipates a preliminary injunction hearing to follow promptly upon entry of a TRO.

The reasonable-probability-of-success prong does not require the movant to establish its case with certainty. Rather, the movant need only demonstrate a "reasonable probability" or "colorable claim" — that is, a claim that is neither frivolous nor unfounded and that is supported by sufficient evidence to warrant the Court's intervention pending a full hearing. Northpoint Holdings v. Bader, 2023 WL 4456328, at 4 (Del. Ch. July 10, 2023); Revlon, Inc. v. MacAndrews & Forbaci Holdings, Inc.*, 506 A.2d 173, 179 (Del. 1986). Where, as here, the movant seeks to enforce clear contractual obligations that the defendants voluntarily assumed, this threshold is readily satisfied.

Delaware law recognizes that restrictive covenants are enforceable where they satisfy a "reasonableness" standard. Courts examine whether the covenant is (i) reasonable in scope, duration, and geographic reach; (ii) designed to protect a legitimate business interest of the employer; and (iii) supported by adequate consideration. Kodiak Bldg. Partners, LLC v. Adams, 2022 WL 17584285, at 6 (Del. Ch. Dec. 12, 2022); Granite Harbor Corporation Techs., Inc. v. Velmoran, 2010 WL 610725, at 7 (Del. Ch. Feb. 18, 2010); Nucar Consulting, Inc. v. Doyle, 2005 WL 820706, at 5 (Del. Ch. Apr. 5, 2005). Delaware courts have consistently recognized that protecting an employer's trade secrets, confidential information, customer and vendor relationships, and investment in employee training constitute legitimate business interests that may be safeguarded through reasonable restrictive covenants. All Pro Maids, Inc. v. Layton, 2004 WL 1878784, at 4 (Del. Ch. Aug. 9, 2004). Where a covenant is supported by adequate consideration — including initial employment, continued employment, promotions, bonuses, equity grants, and access to confidential information — and is reasonably tailored to protect the employer's legitimate interests, Delaware courts will enforce it. Elite Cleaning Co. v. Maynard, 2020 WL 7711606, at 6 (Del. Ch. Dec. 29, 2020); Centurion Serv. Grp. LLC v. Wilensky, 2023 WL 5944103, at 8 (Del. Ch. Sept. 12, 2023).

The standard for irreparable harm requires the movant to demonstrate that, absent injunctive relief, it will suffer harm that is imminent, genuine, and not adequately compensable by monetary damages. In the context of trade secret misappropriation and breach of restrictive covenants, Delaware courts have recognized that the unauthorized disclosure or use of trade secrets constitutes irreparable harm as a matter of law because, once disclosed, the confidentiality of the information is destroyed and cannot be restored. Ashbury Industries, 2023 WL 4456328, at *6. The Delaware Uniform Trade Secrets Act expressly authorizes injunctive relief for actual or threatened misappropriation. 6 Del. C. § 2002.

IV. ARGUMENT

A. CRH Has a Reasonable Probability of Success on the Merits

CRH has demonstrated far more than a "reasonable probability" of success on the merits of its five claims. The evidence establishes clear contractual obligations, deliberate breaches of those obligations, systematic theft of trade secrets, and a coordinated scheme between the Individual Defendants and Verdana to raid CRH's most critical business unit. Each claim is addressed in turn.

1. Breach of Restrictive Covenant (Count I — All Eight Individual Defendants). ##### a. The Restrictive Covenants Are Valid and Enforceable Under Delaware Law

The restrictive covenants contained in the Individual Defendants' employment agreements satisfy each element of the Delaware enforceability standard. They are reasonable in geographic scope and temporal duration, they are designed to protect legitimate business interests, and they are supported by adequate consideration.

Geographic Scope. The non-competition clauses are limited to the United States of America. CRH operates 387 retail stores across 34 states and a nationwide ecommerce platform. Verdana similarly operates on a nationwide basis. The geographic limitation to the United States is coextensive with CRH's actual competitive footprint and is reasonable given the nationwide scope of CRH's operations and Verdana's competing nationwide presence. Delaware courts have consistently upheld nationwide geographic restrictions where the employer operates on a national scale and the restriction is tailored to the scope of the employer's business. See Kodiak Bldg. Partners, 2022 WL 17584285, at 7 (enforcing nationwide non-compete where employer operated nationally); Granite Harbor Corporation Techs., 2010 WL 610725, at 8 (upholding broad geographic scope where the employer's business was not confined to a particular region). The Rathore Group's roles were national in scope — they managed merchandising strategy, vendor relations, and category performance across all 387 CRH locations and the entire ecommerce platform. A restriction limited to a particular state or region would be meaningless given the nature of their responsibilities.

Temporal Duration. The non-competition periods are 18 months for the three most senior departing employees (Rathore, Linden, and Kaczmarek) and 12 months for the remaining five employees (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson). These durations are well within the range routinely enforced by Delaware courts for senior executives with access to strategic confidential information and trade secrets. See Centurion Serv. Grp., 2023 WL 5944103, at 9 (enforcing 18-month non-compete for senior executive); Nucar Consulting, 2005 WL 820706, at 6 (enforcing 24-month non-compete); All Pro Maids, 2004 WL 1878784, at *5 (noting that 12- to 24-month durations are generally considered reasonable for employees with significant access to confidential information). The 12- and 18-month durations are, if anything, conservative given the scope of confidential information to which the Individual Defendants had access and the strategic significance of Project Ridgeline, which sets forth CRH's competitive strategy for five years.

Legitimate Business Interest. CRH has compelling legitimate business interests warranting protection through the restrictive covenants. These interests include, but are not limited to:

First, the protection of CRH's trade secrets and confidential information. The Rathore Group had unrestricted access to Project Ridgeline — CRH's five-year strategic roadmap — as well as vendor negotiation playbooks, seasonal buying algorithms, ecommerce assortment algorithms, private-label cost models, and customer segmentation data. These materials are the product of years of investment and represent CRH's most important competitive advantages. See Granite Harbor Corporation Techs., 2010 WL 610725, at 8 (recognizing protection of trade secrets and confidential information as legitimate business interest); Kodiak Bldg. Partners, 2022 WL 17584285, at 8 (same).

Second, the preservation of CRH's customer and vendor relationships. The departing employees collectively managed CRH's relationships with its top 200 vendors, representing billions of dollars in annual purchasing volume. These relationships were cultivated over years through the expenditure of significant CRH resources and represent a form of goodwill that CRH has a legitimate interest in protecting. See Nucar Consulting, 2005 WL 820706, at *6 (recognizing preservation of customer relationships as legitimate interest).

Third, the prevention of the unfair competitive advantage arising from the coordinated defection of an entire business unit leadership team. This is not a case of a single employee seeking new opportunities; this is a case of eight senior leaders departing en masse in a coordinated scheme designed to transplant CRH's entire merchandising infrastructure — knowledge, strategies, relationships, and trade secrets — to a direct competitor. See Boscov's Dep't Store, LLC v. McCloskey, 2023 WL 3048276, at *5 (Del. Ch. Apr. 21, 2023) (recognizing heightened risk of competitive harm where departure is coordinated).

Adequate Consideration. Each employee's restrictive covenant was supported by adequate consideration under Delaware law. For those employees who signed their employment agreements at the time of hire, the offer of employment itself constituted adequate consideration. Delaware law is clear that initial employment provides sufficient consideration for a restrictive covenant. See Kodiak Bldg. Partners, 2022 WL 17584285, at 9; All Pro Maids, 2004 WL 1878784, at 4.

For Defendant Rathore, whose A&R Rathore Agreement was executed in connection with her March 2021 promotion, the agreement was supported by additional, independent consideration beyond continued employment: a promotion from VP to SVP of Merchandising; a $150,000 promotion bonus; an enhanced RSU grant with a face value of $725,000 subject to four-year ratable annual vesting; an increase in base salary; an increase in target bonus percentage; and expanded access to the most confidential categories of CRH proprietary information. This package of fresh consideration independently supports the enforceability of the A&R Rathore Agreement's restrictive covenants. See Centurion Serv. Grp., 2023 WL 5944103, at *9 (fresh consideration for modified covenant may include promotion, bonus, equity grant, or access to new categories of confidential information).

For the remaining seven defendants, their employment agreements were supported by initial employment and, in many cases, by subsequent promotions, salary increases, bonuses, and equity grants provided during the course of their employment. In addition, all Individual Defendants received access to CRH's most competitively sensitive confidential information — including Project Ridgeline — as a benefit of their positions, and such access constitutes additional consideration for the restrictive covenants. See Bancroft Capital LLC v. Davidge, 2021 WL 1997546, at *7 (Del. Ch. May 19, 2021) (recognizing access to confidential information as consideration for restrictive covenant).

##### b. Each Defendant Is in Breach

The evidence overwhelmingly establishes that each Individual Defendant is currently in breach of his or her non-competition obligations. Defendant Rathore accepted the position of President, Merchandising & Strategy at Verdana Commerce Group, Inc. — a direct competitor of CRH in 28 overlapping product categories — in knowing violation of her 18-month non-compete, which prohibits her from engaging in any Competing Business within the United States for 18 months following her February 7, 2025 departure date (i.e., through August 7, 2026). Verdana is, by any reasonable definition, a "Competing Business" within the meaning of the A&R Rathore Agreement: it operates in the same omnichannel retail space, competes in the same product categories, and has expressly announced its intention to target CRH's core categories. Rathore's role at Verdana — President, Merchandising & Strategy — is functionally identical to, and in fact broader than, the SVP of Merchandising role she held at CRH.

Each of the other seven Individual Defendants similarly accepted merchandising, strategy, or analytics roles at Verdana in direct violation of their respective non-competition covenants. The positions they have assumed at Verdana mirror the roles they held at CRH and involve performing the same functions — vendor relations, category management, private-label strategy, seasonal planning, ecommerce merchandising, and analytics — for a direct competitor. This constitutes textbook breach of a non-competition obligation.

Beyond the non-competition obligations, the non-solicitation obligations are also at imminent risk of violation. The Rathore Group collectively managed relationships with CRH's top vendors and oversaw the entire merchandising organization. Their collective presence at Verdana creates an imminent danger that they will — either actively or passively — solicit CRH employees to follow them to Verdana and divert CRH vendor relationships to Verdana. Indeed, the very structure of the departure — a coordinated team move — demonstrates the Individual Defendants' willingness to engage in collective action to undermine CRH's business relationships. See Boscov's, 2023 WL 3048276, at *6 (finding imminent risk of solicitation where departing team had managed key relationships).

The departures were coordinated and simultaneous, with all eight resignations submitted at exactly 4:47 PM PST on the same day. This timing, combined with the encrypted communications between January 13 and 24, 2025, the sequential signing of Verdana offer letters between January 27 and February 4, 2025, and the systematic data exfiltration, demonstrates premeditated intent to breach the restrictive covenants. The Individual Defendants did not merely stumble into breach through inadvertence or ignorance; they planned their breach weeks in advance, took CRH's trade secrets to facilitate it, and timed their departure for maximum impact.

2. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants). Each employment agreement contains perpetual confidentiality obligations that prohibit the use, disclosure, or dissemination of CRH's confidential and proprietary information both during and after employment. These obligations are unlimited in duration and extend to all categories of proprietary information, including trade secrets, business plans, strategic initiatives, vendor terms and pricing, customer data, and any other information designated as confidential by CRH or that the employee reasonably should understand to be confidential. See supra Part II.B.

The forensic evidence conclusively establishes that the Individual Defendants breached these obligations. Between January 10 and February 4, 2025, 14,327 files comprising approximately 2.8 gigabytes of confidential CRH data were exfiltrated from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts associated with members of the Rathore Group. Anand Decl. ¶¶ 10–14. The exfiltrated materials include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, customer segmentation data, seasonal buying algorithm documentation, and ecommerce assortment algorithm code documentation. Id. ¶¶ 20–28. Each of these categories of information falls squarely within the definition of "Confidential Information" as that term is defined in the employment agreements.

The act of downloading confidential CRH materials to personal cloud storage accounts — removing them from CRH's secure, access-controlled environment — constitutes a breach of the confidentiality obligations regardless of whether the materials have yet been disclosed to Verdana. The employment agreements prohibit the use or disclosure of confidential information "except as required in the performance of Executive's duties for the Company." Downloading confidential CRH files to personal accounts in anticipation of departing for a competitor is manifestly not within the scope of the employees' duties at CRH. The mere transfer of these files outside CRH's controlled environment exposes them to the risk of disclosure and use by Verdana and constitutes a breach of the duty to maintain confidentiality.

Furthermore, the timing of the exfiltration confirms the intent behind it. The downloads commenced on January 10, 2025 — just four days after the January 6, 2025 dinner meeting between Rathore, Dietrich, and Westbrook — and continued through February 4, 2025, overlapping precisely with the period during which the Individual Defendants signed their Verdana offer letters. The inescapable inference is that the data was taken in anticipation of the departure and for use at Verdana. The exfiltrated files were not random or incidental; they were systematically selected from the most competitively sensitive categories of CRH's proprietary information, targeting precisely the materials that would be most valuable to a competitor seeking to replicate CRH's merchandising strategies.

3. Misappropriation of Trade Secrets Under DUTSA (Count III — Individual Defendants and Verdana). CRH has a strong probability of success on its claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009.

The DUTSA Framework. DUTSA defines a "trade secret" as information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 6 Del. C. § 2001(4). "Misappropriation" includes the acquisition of a trade secret by improper means, or the disclosure or use of a trade secret by a person who knew or should have known that the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy. See Great Lakes Chem. Corp. v. Pharmacia Corp., 788 A.2d 544, 553 (Del. Ch. 2001); Shire US Inc. v. Bardi, 2019 WL 3992918, at *5 (Del. Ch. Aug. 23, 2019).

CRH's Materials Qualify as Trade Secrets. The confidential materials accessed and exfiltrated by the Rathore Group clearly satisfy DUTSA's trade secret definition.

Independent Economic Value. Project Ridgeline and the related materials described herein — the five-year category expansion roadmap, proprietary vendor negotiation playbooks, private-label margin targets and sourcing strategies, seasonal buying algorithms, ecommerce assortment algorithms, and customer segmentation data — derive substantial independent economic value from not being gen

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
Filed: March 5, 2025
Bernard Crawford (Del. Bar No. 5284), Responsible Partner Renata Vasquez (Del. Bar No. 6107), Billing Partner James Underwood (Del. Bar No. 6893), Lead Associate Devon Archer (Del. Bar No. 7241), Working Associate CALDERWOOD & HARKNESS LLP 1301 K Street NW, Suite 1200 Washington, DC 20005 Telephone: (202) 555-7200 Facsimile: (202) 555-7201
601 South Figueroa Street, Suite 4200 Los Angeles, CA 90017 Telephone: (213) 555-4400
Attorneys for Plaintiff Cascade Retail Holdings Inc.
TABLE OF CONTENTS
TABLE OF AUTHORITIES
Cases:
Statutes:
Treatises and Other Authorities:
I. PRELIMINARY STATEMENT
Cascade Retail Holdings Inc. ("CRH" or "Cascade"), a publicly traded omnichannel retailer listed on the Nasdaq Global Select Market (ticker: CRHL) with fiscal year 2024 revenues of $6.82 billion and 387 brick-and-mortar retail locations across 34 states, respectfully brings this emergency motion for a temporary restraining order and preliminary injunction. CRH seeks the immediate intervention of this Court to enforce the restrictive covenant and confidentiality obligations contained in employment agreements voluntarily executed by eight former senior merchandising employees who engaged in a coordinated, premeditated scheme to abandon CRH, steal its most competitively sensitive trade secrets, and defect en masse to a direct competitor — all in flagrant breach of their contractual obligations.
On February 7, 2025, at precisely 4:47 PM Pacific Standard Time — at the close of business on a Friday, timing chosen with surgical precision to maximize disruption and minimize CRH's ability to respond — all eight employees submitted simultaneous resignation letters, effective immediately. The coordinated nature of these resignations was no coincidence. The departures were orchestrated by Defendant Priya Rathore, CRH's former Senior Vice President of Merchandising and the most senior non-C-suite executive in CRH's merchandising division, which generated $2.3 billion in gross merchandise value in FY2024.
The departing employees — collectively referred to as the "Rathore Group" — immediately defected to Defendant Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor headquartered in Wilmington, Delaware, which publicly announced the hires one week later on February 14, 2025. Verdana is a privately held omnichannel retailer majority-owned by Greystone Capital Partners, LP, a private equity firm that acquired its controlling stake through Greystone Capital Fund VII, LP in Q3 2023 for an enterprise value of $2.4 billion. Verdana directly competes with CRH in 28 overlapping product categories and, in January 2025 — barely a month before the Rathore Group's mass departure — publicly announced a "transformational growth initiative" specifically targeting CRH's strongest and most profitable categories: private-label home goods and seasonal décor.
The Rathore Group did not leave empty-handed. During their employment at CRH, these eight individuals had unrestricted access to CRH's most competitively sensitive information, including a proprietary five-year category expansion strategy known internally as "Project Ridgeline," vendor negotiation playbooks detailing terms and leverage points for CRH's most critical supplier relationships, seasonal buying algorithms developed over years of iterative refinement, private-label sourcing strategies covering margin targets and manufacturing partnerships, and customer segmentation data encompassing millions of consumer profiles. Forensic analysis conducted by Pinnacle Forensics LLC confirms that, in the weeks immediately preceding their departure, the Rathore Group systematically exfiltrated 14,327 files comprising approximately 2.8 gigabytes of confidential data from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts. The exfiltration began on January 10, 2025 — just four days after a private dinner in New York City between Rathore, Verdana CEO Warren Dietrich, and Greystone Managing Partner Elliot Westbrook — and continued through February 4, 2025, three days before the coordinated resignations.
The scheme was richly funded. Verdana, backed by Greystone Capital Partners, offered the eight members of the Rathore Group aggregate sign-on bonuses totaling $6.2 million — a staggering sum that can be explained only as the price Verdana and Greystone were willing to pay to strip CRH of its entire senior merchandising leadership and acquire, through that raiding, CRH's most valuable proprietary strategies and relationships.
Each of the departing employees signed an employment agreement governed by Delaware law containing a restrictive covenant with non-competition periods ranging from 12 to 18 months, non-solicitation periods ranging from 18 to 24 months, and perpetual confidentiality obligations. These covenants were supported by substantial consideration including initial and continued employment, promotions, salary increases, annual performance bonuses, restricted stock unit grants, and access to the very confidential information the Rathore Group has now stolen. Each employee knowingly and voluntarily accepted these obligations as a condition of the benefits conferred upon them. Having accepted those benefits, they cannot now discard their contractual obligations simply because a competitor has offered them a richer deal.
CRH therefore respectfully moves this Court for a temporary restraining order and preliminary injunction restraining the Individual Defendants from commencing or continuing employment in merchandising or related roles at Verdana, restraining Verdana from employing the Individual Defendants in any such capacity, and requiring the preservation and immediate return of all exfiltrated confidential information and trade secrets. CRH asserts five causes of action supporting this emergency relief: (1) breach of restrictive covenant; (2) breach of confidentiality obligations; (3) misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA"), 6 Del. C. §§ 2001–2009; (4) tortious interference with contractual relations against Verdana; and (5) civil conspiracy against all Defendants.
As set forth below, CRH satisfies each element of the standard for emergency injunctive relief. It has demonstrated a strong likelihood of success on the merits of each claim; it will suffer irreparable harm absent an injunction — harm that is ongoing and compounds with every passing day; the balance of hardships overwhelmingly favors CRH over defendants who voluntarily assumed the very obligations they now seek to evade; and the public interest is served by enforcing valid contracts, deterring coordinated employee raiding, and protecting the incentives that underpin innovation and investment.
II. STATEMENT OF FACTS
The following facts are drawn from the Verified Complaint (Dkt. 1), the accompanying declarations of Theresa Yun-Park, General Counsel of CRH (the "Yun-Park Declaration"), Roland Ashby, Chief People Officer of CRH (the "Ashby Declaration"), Dr. Rajiv Anand, Engagement Lead, Pinnacle Forensics LLC (the "Anand Declaration"), and Sandra Fielding, Lead Investigator, Aurelian Investigations Group Inc. (the "Fielding Declaration"), and the exhibits attached thereto.
A. The Parties
1. Plaintiff Cascade Retail Holdings Inc. Cascade Retail Holdings Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal executive offices located at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119. CRH's registered agent for service of process in Delaware is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. CRH's Employer Identification Number is 91-2847351.
CRH is publicly traded on the Nasdaq Global Select Market under the ticker symbol "CRHL." CRH operates as an omnichannel retailer, maintaining 387 brick-and-mortar retail locations across 34 states and a robust direct-to-consumer ecommerce platform. For the fiscal year ended January 31, 2025 ("FY2024"), CRH reported total revenues of approximately $6.82 billion. As of February 2025, CRH's approximate market capitalization was $4.1 billion.
CRH's merchandising division is the strategic core of the Company. In FY2024, the merchandising division accounted for approximately $2.3 billion in gross merchandise value ("GMV"), encompassing product categories including home goods, seasonal décor, hardlines, softlines, private-label brands, and ecommerce assortment. The merchandising division is responsible for all product sourcing, vendor negotiations, category management, private-label development, pricing strategy, and inventory planning. The loss of the division's entire senior leadership team — and the trade secrets and proprietary strategies those leaders took with them — strikes at the heart of CRH's competitive position.
CRH's Chief Executive Officer is Marcus Langford. Its General Counsel is Theresa Yun-Park. Its Chief People Officer is Roland Ashby. Yun-Park Decl. ¶¶ 2–5; Ashby Decl. ¶¶ 2–4.
2. Individual Defendants — The Rathore Group. The eight Individual Defendants — collectively the "Rathore Group" — are former CRH employees who, prior to their February 7, 2025 resignations, comprised the entire senior leadership team of CRH's merchandising division. Each Individual Defendant signed an employment agreement with CRH containing restrictive covenant provisions governed by Delaware law. The Individual Defendants are as follows:
Priya Rathore. Defendant Rathore served as CRH's Senior Vice President of Merchandising from March 15, 2021 through February 7, 2025. She was initially hired as Vice President of Merchandising on June 3, 2019 and was promoted to SVP effective March 15, 2021. In the SVP role, Rathore was the most senior non-C-suite executive in CRH's merchandising organization. She reported directly to CEO Marcus Langford and had full strategic oversight of CRH's $2.3 billion merchandising division. In FY2024, Rathore's base salary was $485,000, her target annual bonus was $290,000 (representing 60% of base salary), and she held an outstanding restricted stock unit grant with a face value of $725,000, subject to four-year ratable annual vesting from her March 15, 2021 promotion date. Rathore executed an initial Employment Agreement on June 3, 2019 (the "Initial Rathore Agreement") and an Amended and Restated Employment Agreement on March 15, 2021 (the "A&R Rathore Agreement"). The A&R Rathore Agreement, which superseded the Initial Rathore Agreement in its entirety, contains an 18-month non-competition clause with nationwide (United States) geographic scope, a 24-month non-solicitation clause covering both CRH employees and vendors, and perpetual confidentiality obligations. In connection with her promotion, Rathore received a $150,000 promotion bonus and the enhanced RSU grant referenced above, both of which constituted additional consideration for the restrictive covenants in the A&R Rathore Agreement. Rathore resides at 14 Harbor Ridge Lane, Bellevue, Washington 98004. Yun-Park Decl. ¶¶ 8–12; Ashby Decl. ¶¶ 8–13; Ex. A (Initial Rathore Agreement); Ex. B (A&R Rathore Agreement).
Derek Linden. Defendant Linden served as CRH's Vice President of Hardlines Merchandising, a position he held for approximately seven years. In that role, Linden was responsible for overseeing all hardlines category management, vendor negotiations, and buying strategies. His FY2024 base salary was $340,000. Linden's employment agreement contains an 18-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 14; Ex. C (Linden Employment Agreement).
Sonia Kaczmarek. Defendant Kaczmarek served as CRH's Vice President of Softlines Merchandising for approximately five years. She oversaw all softlines product categories, including apparel, textiles, and related accessories. Her FY2024 base salary was $325,000. Kaczmarek's employment agreement contains an 18-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 15; Ex. D (Kaczmarek Employment Agreement).
Amara Osei. Defendant Osei served as CRH's Director of Private Label Strategy for approximately four years. In that role, she led the development and execution of CRH's private-label brand portfolio, including sourcing, margin optimization, and new brand launches. Her FY2024 base salary was $265,000. Osei's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 16; Ex. E (Osei Employment Agreement).
Brent Halvorsen. Defendant Halvorsen served as CRH's Director of Seasonal Planning & Analytics for approximately six years. He was responsible for CRH's seasonal merchandise planning, demand forecasting, and proprietary buying algorithms. His FY2024 base salary was $258,000. Halvorsen's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 17; Ex. F (Halvorsen Employment Agreement).
Lucia Fernandez-Gill. Defendant Fernandez-Gill served as CRH's Director of Vendor Relations (Domestic) for approximately five years. She managed CRH's relationships with its top domestic suppliers, including all pricing negotiations, contract renewals, and exclusivity arrangements. Her FY2024 base salary was $248,000. Fernandez-Gill's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 18; Ex. G (Fernandez-Gill Employment Agreement).
Nathan Tsao. Defendant Tsao served as CRH's Senior Manager of eCommerce Merchandising for approximately three years. He was responsible for CRH's online assortment strategy, ecommerce merchandising algorithms, and digital category management. His FY2024 base salary was $195,000. Tsao's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 19; Ex. H (Tsao Employment Agreement).
Kira Johansson. Defendant Johansson served as CRH's Senior Manager of Category Analytics for approximately four years. She was responsible for developing and implementing CRH's proprietary customer segmentation models and category performance analytics. Her FY2024 base salary was $192,000. Johansson's employment agreement contains a 12-month non-compete with nationwide geographic scope, an 18-month non-solicitation clause, and perpetual confidentiality obligations. Ashby Decl. ¶ 20; Ex. I (Johansson Employment Agreement).
In the aggregate, the Rathore Group's FY2024 base salaries totaled in excess of $2.3 million. Each member of the Rathore Group was a key participant in the development and execution of CRH's merchandising strategies. Together, they represented the institutional knowledge, vendor relationships, and strategic vision of CRH's most important business unit. Their simultaneous departure left CRH without any senior merchandising leadership — a void that cannot be filled overnight and that was plainly intended to cripple CRH's competitive position. Yun-Park Decl. ¶¶ 14–15.
3. Defendant Verdana Commerce Group, Inc. Verdana Commerce Group, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana's Employer Identification Number is 51-3982647. Verdana is a privately held omnichannel retailer operating in the home goods, apparel, and seasonal décor product categories — the same core categories in which CRH competes. Verdana's estimated revenue for FY2024 was approximately $1.9 billion.
Verdana is majority-owned by Greystone Capital Partners, LP, a New York-based private equity firm operating through Greystone Capital Fund VII, LP (vintage 2022; $8.5 billion in committed capital). Greystone's Managing Partner is Elliot Westbrook, and its principal office is located at 680 Park Avenue, 22nd Floor, New York, New York 10065. Greystone acquired its controlling stake in Verdana in Q3 2023 for an enterprise value of approximately $2.4 billion.
Verdana's Chief Executive Officer is Warren Dietrich, and its General Counsel is Helen Tsoi. Verdana directly competes with CRH in 28 overlapping product categories, including the private-label home goods and seasonal décor categories that constitute CRH's core competitive strengths. Yun-Park Decl. ¶¶ 16–20.
In January 2025, Verdana issued a public statement announcing a "transformational growth initiative" aimed at expanding Verdana's footprint from approximately $1.9 billion in revenue to $4 billion by 2028. The announcement specifically identified private-label home goods and seasonal décor as the categories Verdana would target for accelerated growth — CRH's strongest and most strategically significant categories. This announcement, made just weeks before the Rathore Group's defection, confirmed that Verdana's growth strategy was built upon the premise of directly attacking CRH's competitive advantages and that Verdana intended to leverage the knowledge and expertise of CRH's former merchandising leaders to execute that strategy. Yun-Park Decl. ¶ 21; Ex. J (Verdana Public Statement, January 2025).
B. The Employment Agreements and Restrictive Covenants
Each of the eight Individual Defendants entered into a written employment agreement with CRH that is governed by Delaware law and contains restrictive covenant provisions including non-competition, non-solicitation, and confidentiality obligations. These agreements are central to CRH's claims and are attached to the Yun-Park Declaration as Exhibits A through I.
The Rathore Agreements. Defendant Rathore's contractual obligations are set forth in two agreements. The Initial Rathore Agreement, executed on June 3, 2019, governed Rathore's employment as Vice President of Merchandising. When Rathore was promoted to Senior Vice President of Merchandising on March 15, 2021, she executed the A&R Rathore Agreement, which superseded the Initial Rathore Agreement in its entirety and contained updated and enhanced restrictive covenant provisions commensurate with Rathore's expanded role and access to additional confidential information. Yun-Park Decl. ¶ 9; Exs. A, B.
Section 7(a) of the A&R Rathore Agreement contains a non-competition covenant that provides, in relevant part:
During the Restricted Period, Executive shall not, directly or indirectly, engage in, assist, or have any interest in (whether as owner, partner, consultant, employee, or otherwise) any Competing Business within the Restricted Territory. For purposes of this Agreement, (i) "Restricted Period" means the period commencing on the Date of Termination and ending on the date that is eighteen (18) months following the Date of Termination; (ii) "Competing Business" means any person, firm, corporation, or other entity engaged in the business of omnichannel retail, wholesale, or ecommerce in product categories that are the same as or substantially similar to the product categories in which the Company operates as of the Date of Termination; and (iii) "Restricted Territory" means the United States of America.
Ex. B, § 7(a).
Section 7(b) of the A&R Rathore Agreement contains a non-solicitation covenant that provides:
During the period commencing on the Date of Termination and ending on the date that is twenty-four (24) months following the Date of Termination, Executive shall not, directly or indirectly: (i) solicit, recruit, or induce any employee of the Company to terminate his or her employment with the Company or to accept employment with any Competing Business; or (ii) solicit, divert, or take away, or attempt to solicit, divert, or take away, any Vendor of the Company for the benefit of any Competing Business.
Ex. B, § 7(b).
Section 8 of the A&R Rathore Agreement contains perpetual confidentiality obligations that provide:
Executive acknowledges that during the course of Executive's employment with the Company, Executive will have access to and become acquainted with Confidential Information. Executive agrees that, during Executive's employment and at all times thereafter, Executive shall not, directly or indirectly, use, disclose, or make available to any third party any Confidential Information, except as required in the performance of Executive's duties for the Company. "Confidential Information" includes, without limitation, trade secrets, proprietary data, business plans, strategic initiatives, vendor terms and pricing, customer data, product development plans, financial information and projections, marketing strategies, and any other information designated as confidential by the Company or that Executive reasonably should understand to be confidential.
Ex. B, § 8.
In exchange for these restrictive covenants, Rathore received substantial consideration under the A&R Rathore Agreement, including: (i) her promotion from VP to SVP of Merchandising, with attendant expansion of responsibilities and authority; (ii) a $150,000 one-time promotion bonus; (iii) a restricted stock unit grant with a face value of $725,000, subject to four-year ratable annual vesting from March 15, 2021; (iv) an increase in her base salary to $485,000; (v) an increase in her target annual bonus to 60% of base salary ($290,000); and (vi) continued access to CRH's most confidential and proprietary information, including materials that were not previously accessible to Rathore in her VP-level role. Yun-Park Decl. ¶¶ 10–12; Ashby Decl. ¶¶ 10–13.
The Other Seven Employment Agreements. The remaining seven Individual Defendants each signed employment agreements with CRH containing restrictive covenants governed by Delaware law. While the specific terms vary based on seniority and role, all seven agreements contain: (i) non-competition covenants with nationwide (United States) geographic scope and durations of either 12 or 18 months; (ii) non-solicitation covenants of 18 to 24 months covering CRH employees and vendors; and (iii) perpetual confidentiality obligations that mirror the substance of the confidentiality provisions in the A&R Rathore Agreement. Yun-Park Decl. ¶ 13; Exs. C–I.
The following table summarizes the key covenant parameters for all eight Individual Defendants:
Each of these restrictive covenants was supported by adequate consideration. For the employees who signed their agreements at the time of initial hire, the offer of employment itself constituted adequate consideration under Delaware law. For those employees whose agreements were entered into or amended during the course of employment, additional consideration was provided in the form of promotions, salary increases, bonuses, equity grants, and expanded access to confidential information. CRH's practice, administered through the office of Chief People Officer Roland Ashby, was to require execution of updated employment agreements containing appropriate restrictive covenants whenever an employee was promoted to a director-level or above position or was granted access to a new category of confidential information. Ashby Decl. ¶¶ 6–7.
C. CRH's Confidential Information and Trade Secrets
CRH's merchandising division, which generated $2.3 billion in GMV in FY2024, is the Company's most strategically significant business unit and the source of its primary competitive advantages. The success of the merchandising division depends critically upon the confidentiality of certain proprietary strategies, algorithms, data sets, and relationship frameworks that CRH has developed over many years at substantial expense.
In October 2024, CRH's merchandising division completed a comprehensive five-year strategic category expansion plan known internally as "Project Ridgeline." Project Ridgeline was the product of approximately eighteen months of intensive work by the Rathore Group and other senior leaders, drawing upon CRH's accumulated proprietary data, market intelligence, and strategic experience. The plan was approved by CRH's Board of Directors in November 2024. Project Ridgeline encompasses:
(a) A detailed five-year roadmap for category expansion into new and adjacent product categories, including market sizing, competitive analysis, and projected revenue and margin contribution;
(b) Proprietary vendor negotiation playbooks containing CRH's historical and current vendor terms, pricing leverage points, volume discount thresholds, exclusivity arrangements, and preferred negotiation strategies for CRH's top 200 domestic and international vendors;
(c) Private-label margin targets and sourcing strategies, including manufacturing partner identities, cost structures, landed cost models, and planned private-label brand launches through FY2029;
(d) Seasonal buying algorithms developed by Defendant Halvorsen and his team over a period of six years, reflecting iterative refinement based on historical demand data, weather pattern analysis, regional preference modeling, and promotional calendar optimization;
(e) eCommerce assortment algorithms developed by Defendant Tsao and his team, incorporating machine-learning-based product ranking, conversion optimization, and dynamic pricing models; and
(f) Customer segmentation data comprising over 22 million consumer profiles with purchase history, demographic attributes, engagement metrics, and predictive lifetime value scores.
Yun-Park Decl. ¶¶ 22–28.
The Rathore Group had full, unrestricted access to all elements of Project Ridgeline. Rathore personally supervised the development of the plan and presented it to CRH's Board of Directors. Each of the other seven Individual Defendants contributed to or had access to the components of Project Ridgeline that related to their respective functional areas. Yun-Park Decl. ¶ 29.
CRH has at all relevant times maintained these materials as confidential through multiple layers of security and access control. Specifically, CRH employed the following measures: (i) all Project Ridgeline materials were stored on CRH's secure Aldermere Systems environment with role-based access controls limiting access to authorized personnel; (ii) password protections and multi-factor authentication were required for access to the Aldermere Systems and Pinnacle Health IT environments in which these materials were housed; (iii) all employees with access to Project Ridgeline materials were required to sign the confidentiality provisions of their employment agreements; (iv) access was granted on a need-to-know basis, with authorization approved by Rathore or a member of CRH's executive leadership team; and (v) all Project Ridgeline documents were marked "Confidential – Internal Use Only" in accordance with CRH's Information Classification Policy (CRH Policy No. IT-2022-017). Yun-Park Decl. ¶¶ 30–32; Ex. K (CRH Information Classification Policy).
These materials derive independent economic value from not being generally known or readily ascertainable by proper means. Project Ridgeline's five-year roadmap, vendor negotiation playbooks, private-label cost models, seasonal buying algorithms, ecommerce assortment algorithms, and customer segmentation data together represent years of accumulated investment and institutional knowledge. If disclosed to a competitor, these materials would enable that competitor to replicate CRH's strategic advantages without investing the time, capital, and effort that CRH expended in developing them. Yun-Park Decl. ¶¶ 33–35.
D. The Coordinated Departure
The departure of the Rathore Group was not a spontaneous event. It was the product of a carefully planned and executed conspiracy between the Individual Defendants and Verdana, orchestrated over a period of approximately five weeks.
January 6, 2025 — The Dinner Meeting. On January 6, 2025, Verdana CEO Warren Dietrich and Greystone Capital Partners Managing Partner Elliot Westbrook met with Defendant Rathore for a private dinner at the Gramercy Club, a private dining club located at 50 East 20th Street, New York, New York 10003. The meeting was confirmed through the investigation conducted by Aurelian Investigations Group Inc., led by Sandra Fielding. According to Fielding's investigation, the dinner lasted approximately two and one-half hours and concluded at approximately 10:30 PM Eastern Time. No other CRH employees were aware of or invited to the meeting. Fielding Decl. ¶¶ 8–14; Ex. L (Aurelian Investigative Summary).
The dinner meeting between Dietrich, Westbrook, and Rathore marks the beginning of the conspiracy. Within four days, the data exfiltration from CRH's systems commenced.
January 10, 2025 — Exfiltration Begins. On January 10, 2025, the first batch of confidential files was downloaded from CRH's Aldermere Systems environment to personal cloud storage accounts associated with members of the Rathore Group. Anand Decl. ¶ 12.
January 13–24, 2025 — Encrypted Communications. Forensic analysis of CRH-issued devices conducted by Pinnacle Forensics LLC, under the direction of Dr. Rajiv Anand, revealed a series of encrypted messaging exchanges between Rathore and the other seven members of the Rathore Group during the period January 13 through January 24, 2025. While the content of the encrypted messages could not be fully recovered, metadata analysis confirmed the timing, frequency, and participants of these exchanges. The communications intensified in the days leading up to the signing of Verdana offer letters and were consistent with coordinating the departure timing and logistics. Anand Decl. ¶¶ 15–19.
January 27, 2025 — Rathore Signs Verdana Offer Letter. On January 27, 2025, Rathore signed an offer letter from Verdana for the position of President, Merchandising & Strategy, reporting directly to Verdana CEO Warren Dietrich. The terms of Rathore's Verdana offer included: a base salary of $650,000 (a 34% increase over her CRH base); a sign-on bonus of $1,500,000; an annual target bonus of 80% of base salary ($520,000); and equity of 1.5% of fully diluted Verdana Commerce Group, Inc. equity. Fielding Decl. ¶¶ 20–22; Ex. M (Rathore Verdana Offer Letter, obtained through investigation).
January 28 – February 4, 2025 — Remaining Defendants Sign Offer Letters. Between January 28 and February 4, 2025, the remaining seven Individual Defendants signed offer letters with Verdana for merchandising, strategy, and analytics roles closely mirroring their former CRH positions. The aggregate sign-on bonuses for the remaining seven defendants totaled approximately $4,700,000. Combined with Rathore's $1,500,000 sign-on bonus, the total sign-on bonuses paid or committed by Verdana to the Rathore Group aggregated $6,200,000. Fielding Decl. ¶¶ 23–26.
The magnitude of these sign-on bonuses — totaling $6.2 million for eight hires, funded by Greystone Capital Partners through Verdana — is extraordinary by any measure and far exceeds market norms for comparable retail merchandising roles. This extraordinary compensation evidences a premeditated scheme to strip CRH of its entire senior merchandising leadership and to acquire, through that wholesale raiding, CRH's proprietary strategies, trade secrets, and vendor and employee relationships. The sign-on bonuses functioned as an inducement to breach — a financial incentive designed to overcome whatever reluctance the Individual Defendants might have had about violating their contractual obligations to CRH. Yun-Park Decl. ¶¶ 36–38.
E. Data Exfiltration
The forensic evidence of data exfiltration is extensive and damning. Pinnacle Forensics LLC, a nationally recognized digital forensics firm, was engaged by CRH on February 20, 2025 to conduct forensic imaging and analysis of CRH's Aldermere Systems and Pinnacle Health IT environments, as well as CRH-issued devices previously assigned to members of the Rathore Group. The forensic analysis was conducted under the direction of Dr. Rajiv Anand, the Engagement Lead at Pinnacle Forensics.
Dr. Anand's analysis confirmed that between January 10 and February 4, 2025, a total of 14,327 files comprising approximately 2.8 gigabytes of data 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 downloads were traced to user accounts associated with specific Individual Defendants and to IP addresses linked to personal devices and home networks. Anand Decl. ¶¶ 10–14.
The exfiltrated materials include, but are not limited to:
(a) The complete Project Ridgeline presentation suite (168 files), including the five-year strategic roadmap, category expansion analyses, and Board-approved execution timeline;
(b) Vendor negotiation term sheets for CRH's top 200 domestic and international vendors (312 files), including current pricing, volume discount structures, exclusivity terms, and negotiation leverage assessments;
(c) Private-label cost models (87 files), including manufacturing partner identities, landed cost calculations, margin targets by SKU category, and planned brand launch schedules;
(d) Customer segmentation data exports (42 files), including consumer demographic profiles, purchase history summaries, predictive lifetime value scores, and behavioral clustering outputs;
(e) Seasonal buying algorithm documentation and model specifications (29 files); and
(f) eCommerce assortment algorithm code documentation and performance analytics (23 files).
Anand Decl. ¶¶ 20–28; Ex. N (Pinnacle Forensics File Inventory Summary).
The exfiltration was systematic and targeted. The files were not randomly selected; rather, they were drawn from the most competitively sensitive categories of CRH's proprietary information. The pattern of downloads confirms a deliberate effort to acquire CRH's most valuable trade secrets for use at Verdana. Notably, the exfiltration commenced on January 10, 2025 — just four days after the January 6 dinner meeting between Rathore, Dietrich, and Westbrook — and continued through February 4, 2025, just three days before the coordinated resignations. Anand Decl. ¶¶ 29–31.
F. The Simultaneous Resignations
On February 7, 2025, a Friday, all eight members of the Rathore Group submitted resignation letters via email to CRH's Human Resources department at exactly 4:47 PM Pacific Standard Time. The resignation letters were submitted simultaneously — literally at the same minute — and each stated that the resignation was effective immediately. The emails bore no explanation for the departures beyond formulaic language expressing appreciation for the "opportunity" at CRH. Ashby Decl. ¶¶ 20–22; Ex. O (Resignation Emails).
The coordinated timing was not coincidental. The submission of eight simultaneous resignation letters at 4:47 PM on a Friday afternoon — at the close of the business week — was designed to maximize disruption to CRH's operations and to minimize CRH's ability to respond before the weekend. By the time CRH's leadership was able to fully assess the situation, the Rathore Group had already departed and was preparing to assume their new positions at Verdana.
On Monday, February 10, 2025, CRH Chief People Officer Roland Ashby alerted General Counsel Theresa Yun-Park to the simultaneous departures. Ashby's initial review of the departing employees' records immediately raised concerns about the restrictive covenant implications. Ashby Decl. ¶ 23; Yun-Park Decl. ¶ 40.
On February 12, 2025, CRH's in-house legal team, led by Yun-Park, completed its initial review and confirmed the existence and terms of the restrictive covenant provisions in each departing employee's employment agreement. On the same day, CRH's Information Technology department, acting on a directive from Yun-Park, conducted an independent audit of system access logs and identified the pattern of data exfiltration described above. Yun-Park Decl. ¶¶ 41–43.
G. Verdana's Public Announcement
On February 14, 2025 — Valentine's Day, and precisely one week after the coordinated resignations — Verdana Commerce Group, Inc. issued a press release entitled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth." The press release publicly announced the hiring of Priya Rathore as President, Merchandising & Strategy and the addition of "seven additional senior merchandising professionals" from an unnamed "industry leader." Yun-Park Decl. ¶ 44; Ex. P (Verdana Press Release, Feb. 14, 2025).
The press release specifically referenced Verdana's expansion into CRH's strongest categories. Verdana CEO Warren Dietrich was quoted as stating: "We are building a world-class merchandising organization to drive Verdana's next phase of transformational growth, particularly in private-label home goods and seasonal décor — categories where we see enormous untapped opportunity." This language precisely mirrored the January 2025 announcement of Verdana's "transformational growth initiative" and left no doubt that the Rathore Group was being hired to perform at Verdana the same functions they performed at CRH, using the same knowledge, strategies, and relationships they developed at CRH's expense. Yun-Park Decl. ¶ 45.
The timing and content of this announcement confirmed CRH's worst fears: Verdana had engineered the departure of CRH's entire senior merchandising leadership and intended to deploy them — together with CRH's trade secrets — in direct competition with CRH in its most strategically significant product categories.
H. Post-Resignation Actions
CRH acted expeditiously to protect its rights upon confirming the scope and nature of the Rathore Group's coordinated departure and data exfiltration.
On February 18, 2025, CRH retained Calderwood & Harkness LLP as outside litigation counsel (Matter No. 1038-00006). Yun-Park Decl. ¶ 46.
On February 20, 2025, CRH engaged Pinnacle Forensics LLC, a nationally recognized digital forensics firm, to conduct forensic imaging and analysis of CRH's systems and the CRH-issued devices previously assigned to the Rathore Group. The engagement was led by Dr. Rajiv Anand. Yun-Park Decl. ¶ 47; Anand Decl. ¶¶ 3–5.
On February 21, 2025, CRH engaged Aurelian Investigations Group Inc. to investigate the circumstances of the Rathore Group's recruitment by Verdana. The investigation was led by Sandra Fielding, a former federal law enforcement officer with over twenty years of experience in corporate investigations. Yun-Park Decl. ¶ 48; Fielding Decl. ¶¶ 3–6.
On February 25, 2025, CRH, through Calderwood & Harkness LLP, sent cease-and-desist letters to: (i) each of the eight Individual Defendants, demanding immediate compliance with their restrictive covenant obligations, preservation of all CRH confidential information, and return of all CRH property; (ii) Verdana Commerce Group, Inc., attention Helen Tsoi, General Counsel, demanding that Verdana cease employing the Individual Defendants in any capacity that would violate their restrictive covenants or utilize CRH's confidential information; and (iii) Greystone Capital Partners, LP, attention Elliot Westbrook, Managing Partner, notifying Greystone of its potential exposure for funding and facilitating the tortious interference and conspiracy. Yun-Park Decl. ¶ 49; Ex. Q (Cease-and-Desist Letters).
On February 27, 2025, counsel entered appearances on behalf of the Defendants: Whitfield, Nygaard & Doyle LLP (Catherine Nygaard, Lead Partner; Travis Beaumont, Associate; 1000 North Market Street, Suite 1500, Wilmington, Delaware 19801) entered an appearance on behalf of the eight Individual Defendants; and Blackhall & Soren LLP (Gavin Blackhall, Lead Partner; Meredith Lau, Senior Associate; 300 Delaware Avenue, Suite 900, Wilmington, Delaware 19801) entered an appearance on behalf of Verdana Commerce Group, Inc.
On March 3, 2025, CRH engaged Veltrano Consulting Group LLC (Dr. Franklin Oberg, Lead Expert; 200 South Wacker Drive, Suite 3100, Chicago, Illinois 60606) as its economic damages expert to assess the financial harm caused by the Defendants' conduct. Yun-Park Decl. ¶ 50.
CRH filed its Verified Complaint and this emergency motion on March 5, 2025.
III. LEGAL STANDARD
The Court of Chancery possesses broad equitable authority to grant temporary restraining orders and preliminary injunctions to preserve the status quo and prevent irreparable harm pending a full hearing on the merits. See Del. Ch. Ct. R. 65(b); Tavrenis v. Allen, 277 A.3d 296, 312 (Del. Ch. 2022); ThoughtWorks, Inc. v. SV Inv. Partners, LLC, 902 A.2d 745, 753 (Del. Ch. 2006).
To obtain a temporary restraining order or preliminary injunction, the movant must demonstrate: (1) a reasonable probability of success on the merits of its claims; (2) an imminent threat of irreparable harm that will occur before a final hearing on the merits; (3) that the balance of hardships tips in the movant's favor; and (4) that the injunction will serve the public interest. Tavrenis, 277 A.3d at 312; ThoughtWorks, 902 A.2d at 753; see also Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in the Delaware Court of Chancery § 10.03 (2d ed. 2024).
A temporary restraining order may issue upon an ex parte showing of exigent circumstances that make notice to the adverse party impracticable. Del. Ch. Ct. R. 65(b). In the present case, while CRH has provided notice to Defendants' counsel of this motion, CRH respectfully submits that the ongoing nature of the harm — including the risk of further dissemination and use of exfiltrated trade secrets — warrants the most expedited consideration this Court can provide. CRH anticipates a preliminary injunction hearing to follow promptly upon entry of a TRO.
The reasonable-probability-of-success prong does not require the movant to establish its case with certainty. Rather, the movant need only demonstrate a "reasonable probability" or "colorable claim" — that is, a claim that is neither frivolous nor unfounded and that is supported by sufficient evidence to warrant the Court's intervention pending a full hearing. Northpoint Holdings v. Bader, 2023 WL 4456328, at 4 (Del. Ch. July 10, 2023); Revlon, Inc. v. MacAndrews & Forbaci Holdings, Inc.*, 506 A.2d 173, 179 (Del. 1986). Where, as here, the movant seeks to enforce clear contractual obligations that the defendants voluntarily assumed, this threshold is readily satisfied.
Delaware law recognizes that restrictive covenants are enforceable where they satisfy a "reasonableness" standard. Courts examine whether the covenant is (i) reasonable in scope, duration, and geographic reach; (ii) designed to protect a legitimate business interest of the employer; and (iii) supported by adequate consideration. Kodiak Bldg. Partners, LLC v. Adams, 2022 WL 17584285, at 6 (Del. Ch. Dec. 12, 2022); Granite Harbor Corporation Techs., Inc. v. Velmoran, 2010 WL 610725, at 7 (Del. Ch. Feb. 18, 2010); Nucar Consulting, Inc. v. Doyle, 2005 WL 820706, at 5 (Del. Ch. Apr. 5, 2005). Delaware courts have consistently recognized that protecting an employer's trade secrets, confidential information, customer and vendor relationships, and investment in employee training constitute legitimate business interests that may be safeguarded through reasonable restrictive covenants. All Pro Maids, Inc. v. Layton, 2004 WL 1878784, at 4 (Del. Ch. Aug. 9, 2004). Where a covenant is supported by adequate consideration — including initial employment, continued employment, promotions, bonuses, equity grants, and access to confidential information — and is reasonably tailored to protect the employer's legitimate interests, Delaware courts will enforce it. Elite Cleaning Co. v. Maynard, 2020 WL 7711606, at 6 (Del. Ch. Dec. 29, 2020); Centurion Serv. Grp. LLC v. Wilensky, 2023 WL 5944103, at 8 (Del. Ch. Sept. 12, 2023).
The standard for irreparable harm requires the movant to demonstrate that, absent injunctive relief, it will suffer harm that is imminent, genuine, and not adequately compensable by monetary damages. In the context of trade secret misappropriation and breach of restrictive covenants, Delaware courts have recognized that the unauthorized disclosure or use of trade secrets constitutes irreparable harm as a matter of law because, once disclosed, the confidentiality of the information is destroyed and cannot be restored. Ashbury Industries, 2023 WL 4456328, at *6. The Delaware Uniform Trade Secrets Act expressly authorizes injunctive relief for actual or threatened misappropriation. 6 Del. C. § 2002.
IV. ARGUMENT
A. CRH Has a Reasonable Probability of Success on the Merits
CRH has demonstrated far more than a "reasonable probability" of success on the merits of its five claims. The evidence establishes clear contractual obligations, deliberate breaches of those obligations, systematic theft of trade secrets, and a coordinated scheme between the Individual Defendants and Verdana to raid CRH's most critical business unit. Each claim is addressed in turn.
1. Breach of Restrictive Covenant (Count I — All Eight Individual Defendants). ##### a. The Restrictive Covenants Are Valid and Enforceable Under Delaware Law
The restrictive covenants contained in the Individual Defendants' employment agreements satisfy each element of the Delaware enforceability standard. They are reasonable in geographic scope and temporal duration, they are designed to protect legitimate business interests, and they are supported by adequate consideration.
Geographic Scope. The non-competition clauses are limited to the United States of America. CRH operates 387 retail stores across 34 states and a nationwide ecommerce platform. Verdana similarly operates on a nationwide basis. The geographic limitation to the United States is coextensive with CRH's actual competitive footprint and is reasonable given the nationwide scope of CRH's operations and Verdana's competing nationwide presence. Delaware courts have consistently upheld nationwide geographic restrictions where the employer operates on a national scale and the restriction is tailored to the scope of the employer's business. See Kodiak Bldg. Partners, 2022 WL 17584285, at 7 (enforcing nationwide non-compete where employer operated nationally); Granite Harbor Corporation Techs., 2010 WL 610725, at 8 (upholding broad geographic scope where the employer's business was not confined to a particular region). The Rathore Group's roles were national in scope — they managed merchandising strategy, vendor relations, and category performance across all 387 CRH locations and the entire ecommerce platform. A restriction limited to a particular state or region would be meaningless given the nature of their responsibilities.
Temporal Duration. The non-competition periods are 18 months for the three most senior departing employees (Rathore, Linden, and Kaczmarek) and 12 months for the remaining five employees (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson). These durations are well within the range routinely enforced by Delaware courts for senior executives with access to strategic confidential information and trade secrets. See Centurion Serv. Grp., 2023 WL 5944103, at 9 (enforcing 18-month non-compete for senior executive); Nucar Consulting, 2005 WL 820706, at 6 (enforcing 24-month non-compete); All Pro Maids, 2004 WL 1878784, at *5 (noting that 12- to 24-month durations are generally considered reasonable for employees with significant access to confidential information). The 12- and 18-month durations are, if anything, conservative given the scope of confidential information to which the Individual Defendants had access and the strategic significance of Project Ridgeline, which sets forth CRH's competitive strategy for five years.
Legitimate Business Interest. CRH has compelling legitimate business interests warranting protection through the restrictive covenants. These interests include, but are not limited to:
First, the protection of CRH's trade secrets and confidential information. The Rathore Group had unrestricted access to Project Ridgeline — CRH's five-year strategic roadmap — as well as vendor negotiation playbooks, seasonal buying algorithms, ecommerce assortment algorithms, private-label cost models, and customer segmentation data. These materials are the product of years of investment and represent CRH's most important competitive advantages. See Granite Harbor Corporation Techs., 2010 WL 610725, at 8 (recognizing protection of trade secrets and confidential information as legitimate business interest); Kodiak Bldg. Partners, 2022 WL 17584285, at 8 (same).
Second, the preservation of CRH's customer and vendor relationships. The departing employees collectively managed CRH's relationships with its top 200 vendors, representing billions of dollars in annual purchasing volume. These relationships were cultivated over years through the expenditure of significant CRH resources and represent a form of goodwill that CRH has a legitimate interest in protecting. See Nucar Consulting, 2005 WL 820706, at *6 (recognizing preservation of customer relationships as legitimate interest).
Third, the prevention of the unfair competitive advantage arising from the coordinated defection of an entire business unit leadership team. This is not a case of a single employee seeking new opportunities; this is a case of eight senior leaders departing en masse in a coordinated scheme designed to transplant CRH's entire merchandising infrastructure — knowledge, strategies, relationships, and trade secrets — to a direct competitor. See Boscov's Dep't Store, LLC v. McCloskey, 2023 WL 3048276, at *5 (Del. Ch. Apr. 21, 2023) (recognizing heightened risk of competitive harm where departure is coordinated).
Adequate Consideration. Each employee's restrictive covenant was supported by adequate consideration under Delaware law. For those employees who signed their employment agreements at the time of hire, the offer of employment itself constituted adequate consideration. Delaware law is clear that initial employment provides sufficient consideration for a restrictive covenant. See Kodiak Bldg. Partners, 2022 WL 17584285, at 9; All Pro Maids, 2004 WL 1878784, at 4.
For Defendant Rathore, whose A&R Rathore Agreement was executed in connection with her March 2021 promotion, the agreement was supported by additional, independent consideration beyond continued employment: a promotion from VP to SVP of Merchandising; a $150,000 promotion bonus; an enhanced RSU grant with a face value of $725,000 subject to four-year ratable annual vesting; an increase in base salary; an increase in target bonus percentage; and expanded access to the most confidential categories of CRH proprietary information. This package of fresh consideration independently supports the enforceability of the A&R Rathore Agreement's restrictive covenants. See Centurion Serv. Grp., 2023 WL 5944103, at *9 (fresh consideration for modified covenant may include promotion, bonus, equity grant, or access to new categories of confidential information).
For the remaining seven defendants, their employment agreements were supported by initial employment and, in many cases, by subsequent promotions, salary increases, bonuses, and equity grants provided during the course of their employment. In addition, all Individual Defendants received access to CRH's most competitively sensitive confidential information — including Project Ridgeline — as a benefit of their positions, and such access constitutes additional consideration for the restrictive covenants. See Bancroft Capital LLC v. Davidge, 2021 WL 1997546, at *7 (Del. Ch. May 19, 2021) (recognizing access to confidential information as consideration for restrictive covenant).
##### b. Each Defendant Is in Breach
The evidence overwhelmingly establishes that each Individual Defendant is currently in breach of his or her non-competition obligations. Defendant Rathore accepted the position of President, Merchandising & Strategy at Verdana Commerce Group, Inc. — a direct competitor of CRH in 28 overlapping product categories — in knowing violation of her 18-month non-compete, which prohibits her from engaging in any Competing Business within the United States for 18 months following her February 7, 2025 departure date (i.e., through August 7, 2026). Verdana is, by any reasonable definition, a "Competing Business" within the meaning of the A&R Rathore Agreement: it operates in the same omnichannel retail space, competes in the same product categories, and has expressly announced its intention to target CRH's core categories. Rathore's role at Verdana — President, Merchandising & Strategy — is functionally identical to, and in fact broader than, the SVP of Merchandising role she held at CRH.
Each of the other seven Individual Defendants similarly accepted merchandising, strategy, or analytics roles at Verdana in direct violation of their respective non-competition covenants. The positions they have assumed at Verdana mirror the roles they held at CRH and involve performing the same functions — vendor relations, category management, private-label strategy, seasonal planning, ecommerce merchandising, and analytics — for a direct competitor. This constitutes textbook breach of a non-competition obligation.
Beyond the non-competition obligations, the non-solicitation obligations are also at imminent risk of violation. The Rathore Group collectively managed relationships with CRH's top vendors and oversaw the entire merchandising organization. Their collective presence at Verdana creates an imminent danger that they will — either actively or passively — solicit CRH employees to follow them to Verdana and divert CRH vendor relationships to Verdana. Indeed, the very structure of the departure — a coordinated team move — demonstrates the Individual Defendants' willingness to engage in collective action to undermine CRH's business relationships. See Boscov's, 2023 WL 3048276, at *6 (finding imminent risk of solicitation where departing team had managed key relationships).
The departures were coordinated and simultaneous, with all eight resignations submitted at exactly 4:47 PM PST on the same day. This timing, combined with the encrypted communications between January 13 and 24, 2025, the sequential signing of Verdana offer letters between January 27 and February 4, 2025, and the systematic data exfiltration, demonstrates premeditated intent to breach the restrictive covenants. The Individual Defendants did not merely stumble into breach through inadvertence or ignorance; they planned their breach weeks in advance, took CRH's trade secrets to facilitate it, and timed their departure for maximum impact.
2. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants). Each employment agreement contains perpetual confidentiality obligations that prohibit the use, disclosure, or dissemination of CRH's confidential and proprietary information both during and after employment. These obligations are unlimited in duration and extend to all categories of proprietary information, including trade secrets, business plans, strategic initiatives, vendor terms and pricing, customer data, and any other information designated as confidential by CRH or that the employee reasonably should understand to be confidential. See supra Part II.B.
The forensic evidence conclusively establishes that the Individual Defendants breached these obligations. Between January 10 and February 4, 2025, 14,327 files comprising approximately 2.8 gigabytes of confidential CRH data were exfiltrated from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts associated with members of the Rathore Group. Anand Decl. ¶¶ 10–14. The exfiltrated materials include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, customer segmentation data, seasonal buying algorithm documentation, and ecommerce assortment algorithm code documentation. Id. ¶¶ 20–28. Each of these categories of information falls squarely within the definition of "Confidential Information" as that term is defined in the employment agreements.
The act of downloading confidential CRH materials to personal cloud storage accounts — removing them from CRH's secure, access-controlled environment — constitutes a breach of the confidentiality obligations regardless of whether the materials have yet been disclosed to Verdana. The employment agreements prohibit the use or disclosure of confidential information "except as required in the performance of Executive's duties for the Company." Downloading confidential CRH files to personal accounts in anticipation of departing for a competitor is manifestly not within the scope of the employees' duties at CRH. The mere transfer of these files outside CRH's controlled environment exposes them to the risk of disclosure and use by Verdana and constitutes a breach of the duty to maintain confidentiality.
Furthermore, the timing of the exfiltration confirms the intent behind it. The downloads commenced on January 10, 2025 — just four days after the January 6, 2025 dinner meeting between Rathore, Dietrich, and Westbrook — and continued through February 4, 2025, overlapping precisely with the period during which the Individual Defendants signed their Verdana offer letters. The inescapable inference is that the data was taken in anticipation of the departure and for use at Verdana. The exfiltrated files were not random or incidental; they were systematically selected from the most competitively sensitive categories of CRH's proprietary information, targeting precisely the materials that would be most valuable to a competitor seeking to replicate CRH's merchandising strategies.
3. Misappropriation of Trade Secrets Under DUTSA (Count III — Individual Defendants and Verdana). CRH has a strong probability of success on its claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009.
The DUTSA Framework. DUTSA defines a "trade secret" as information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 6 Del. C. § 2001(4). "Misappropriation" includes the acquisition of a trade secret by improper means, or the disclosure or use of a trade secret by a person who knew or should have known that the trade secret was acquired under circumstances giving rise to a duty to maintain its secrecy. See Great Lakes Chem. Corp. v. Pharmacia Corp., 788 A.2d 544, 553 (Del. Ch. 2001); Shire US Inc. v. Bardi, 2019 WL 3992918, at *5 (Del. Ch. Aug. 23, 2019).
CRH's Materials Qualify as Trade Secrets. The confidential materials accessed and exfiltrated by the Rathore Group clearly satisfy DUTSA's trade secret definition.
Independent Economic Value. Project Ridgeline and the related materials described herein — the five-year category expansion roadmap, proprietary vendor negotiation playbooks, private-label margin targets and sourcing strategies, seasonal buying algorithms, ecommerce assortment algorithms, and customer segmentation data — derive substantial independent economic value from not being gen

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. PRELIMINARY STATEMENT

II. STATEMENT OF FACTS

III. LEGAL STANDARD

IV. ARGUMENT

Record

Parties

Dates

Amounts