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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

Filed: March 5, 2025

I. INTRODUCTION

Plaintiff Cascade Retail Holdings Inc. ("CRH" or "Plaintiff"), a publicly traded omnichannel retail company listed on the Nasdaq Global Select Market under the ticker symbol "CRHL" and headquartered in Seattle, Washington, respectfully moves this Court, pursuant to Court of Chancery Rules 65(a) and 65(b) and the inherent equitable authority of this Court, for the entry of a temporary restraining order ("TRO") and preliminary injunction against all nine defendants named herein.

CRH seeks emergency relief to prevent imminent, irreparable harm arising from a coordinated mass departure of eight senior merchandising employees — led by Defendant Priya Rathore ("Rathore"), CRH's former Senior Vice President of Merchandising — who resigned simultaneously on February 7, 2025 to join Defendant Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor of CRH operating in the same retail categories and geographic markets. The scope, timing, and orchestration of this departure are unprecedented in CRH's corporate history and bear every hallmark of a deliberate, premeditated raid designed to cripple CRH's merchandising operations and transplant its most valuable proprietary strategies to a rival.

Each of the eight individual defendants — Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Rathore Group") — is bound by a restrictive covenant contained in his or her employment agreement with CRH, including non-competition obligations ranging from twelve to eighteen months, non-solicitation of employees obligations ranging from eighteen to twenty-four months, non-solicitation of vendor obligations, and perpetual confidentiality obligations. All eight employment agreements are governed by the laws of the State of Delaware.

The departing employees did not merely hold senior titles. They collectively possessed direct, unrestricted access to CRH's most sensitive proprietary information, including a confidential five-year category expansion roadmap known internally as "Project Ridgeline," proprietary vendor negotiation playbooks that reflect years of relationship-building and commercial intelligence, seasonal buying algorithms that drive CRH's inventory optimization, private-label sourcing strategies and cost models underlying CRH's highest-margin product lines, and granular customer segmentation data that powers CRH's omnichannel marketing and merchandising decisions. In the hands of a direct competitor, this information would provide a roadmap to replicate — and undercut — CRH's most critical strategic initiatives.

The threat is not speculative. Forensic analysis conducted by Pinnacle Forensics LLC, a nationally recognized digital forensics firm, has confirmed that 14,327 files — approximately 2.8 gigabytes of data — were exfiltrated from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts belonging to members of the Rathore Group between January 10 and February 4, 2025. The exfiltrated files include, among other categories, Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation datasets. This exfiltration occurred during the precise window in which the Rathore Group was secretly negotiating their departures with Verdana.

Verdana, a $1.9 billion revenue omnichannel retailer backed by private equity sponsor Greystone Capital Partners, LP ("Greystone"), orchestrated this coordinated recruitment. Verdana's CEO, Warren Dietrich, and Greystone's Managing Partner, Elliot Westbrook, personally met with Rathore at a private dinner in New York City on January 6, 2025 to initiate the recruitment. Over the ensuing weeks, Verdana extended offer letters to all eight members of the Rathore Group, offering the group an aggregate of $6,200,000 in sign-on bonuses — including $1,500,000 for Rathore alone — to lure them away from CRH. This extraordinary financial inducement, combined with the coordinated timing and the deliberate targeting of an entire functional team, demonstrates that Verdana's objective was not simply to hire talented individuals, but to acquire, wholesale, the institutional knowledge, strategic plans, and competitive advantages that CRH developed over years and at enormous expense.

In light of the foregoing, CRH respectfully requests that the Court: (1) enter a TRO immediately restraining all eight individual defendants from commencing employment in merchandising roles at Verdana Commerce Group, Inc. or any of its affiliates; (2) order the immediate return of all CRH confidential information and trade secrets in the possession, custody, or control of all defendants, and certify the destruction of any copies thereof; (3) restrain Verdana from employing, engaging, or utilizing the services of the individual defendants in any merchandising-related capacity; (4) order Verdana to sequester and preserve any CRH confidential information or trade secrets in its possession; and (5) schedule a preliminary injunction hearing on an expedited basis.

II. STATEMENT OF FACTS

The following facts are drawn from the Verified Complaint, the supporting declarations, and the exhibits filed concurrently herewith, and are presented to establish the factual predicate for the emergency relief CRH seeks.

A. The Parties

1. Plaintiff Cascade Retail Holdings Inc. Plaintiff Cascade Retail Holdings Inc. is a corporation organized and existing under the laws of the State of Delaware. CRH is publicly traded on the Nasdaq Global Select Market under the ticker symbol "CRHL." CRH maintains its corporate headquarters at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119, and its registered agent for service of process in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801.

CRH is a leading omnichannel retailer operating 387 brick-and-mortar retail locations across 34 states and the District of Columbia, as well as a direct-to-consumer ecommerce platform serving customers nationwide. CRH's product assortment spans home goods, seasonal décor, apparel, hardlines, and private-label offerings, with a strategic emphasis on curated, high-margin private-label brands that differentiate CRH from its competitors.

For the fiscal year ended January 31, 2025 ("FY2024"), CRH reported annual revenue of approximately $6.82 billion. As of February 2025, CRH's market capitalization was approximately $4.1 billion. CRH's merchandising division — the division most directly affected by the events at issue in this proceeding — accounted for $2.3 billion in gross merchandise value ("GMV") in FY2024, representing a core driver of CRH's profitability and shareholder value.

CRH's senior leadership team includes Marcus Langford, Chief Executive Officer; Theresa Yun-Park, Senior Vice President and General Counsel; and Roland Ashby, Chief People Officer. Each of these individuals has provided sworn declarations in support of this Motion.

2. The Individual Defendants (the "Rathore Group"). The eight individual defendants are former senior employees of CRH's merchandising division who resigned simultaneously on February 7, 2025 and accepted employment with Verdana. The biographical and employment details of each are set forth below.

Priya Rathore. Defendant Rathore served as CRH's Senior Vice President of Merchandising from March 15, 2021 until her resignation on February 7, 2025. She initially joined CRH on June 3, 2019 as Vice President of Merchandising before being promoted to the SVP role. In her capacity as SVP, Merchandising, Rathore had ultimate operational responsibility for all merchandising strategy, vendor relationships, private-label development, seasonal planning, category management, and ecommerce assortment decisions across CRH's entire retail footprint. She reported directly to CRH's Chief Operating Officer and served on CRH's Executive Leadership Team.

Rathore's compensation at CRH included a base salary of $485,000 per annum, a target annual bonus of $290,000 (representing 60% of base salary), and a restricted stock unit ("RSU") grant with a face value of $725,000 subject to four-year vesting from the date of her March 15, 2021 promotion. Upon her promotion to SVP, Rathore received a one-time promotion bonus of $150,000 and executed an Amended and Restated Employment Agreement dated March 15, 2021, which superseded her original Employment Agreement dated June 3, 2019. Both agreements contained restrictive covenant provisions, and the Amended and Restated Employment Agreement included an eighteen-month non-competition period and a twenty-four-month non-solicitation of employees period, in addition to non-solicitation of vendor and perpetual confidentiality obligations. Rathore's residence is located at 14 Harbor Ridge Lane, Bellevue, Washington 98004.

Upon information and belief, Rathore has accepted the position of President, Merchandising & Strategy at Verdana, with a compensation package including a base salary of $650,000, a sign-on bonus of $1,500,000, a target annual bonus of $520,000 (representing 80% of base salary), and an equity grant of 1.5% of VCG's fully diluted equity.

Derek Linden. Defendant Linden served as Vice President, Hardlines Merchandising at CRH for approximately seven years until his resignation on February 7, 2025. Linden's base salary was $340,000 per annum. His employment agreement contained an eighteen-month non-competition clause and other restrictive covenant provisions.

Sonia Kaczmarek. Defendant Kaczmarek served as Vice President, Softlines Merchandising at CRH for approximately five years until her resignation on February 7, 2025. Kaczmarek's base salary was $325,000 per annum. Her employment agreement contained an eighteen-month non-competition clause and other restrictive covenant provisions.

Amara Osei. Defendant Osei served as Director, Private Label Strategy at CRH for approximately four years until her resignation on February 7, 2025. Osei's base salary was $265,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Osei had direct responsibility for the strategic development and profitability of CRH's private-label portfolio, which generates among the highest gross margins of any product category in CRH's assortment.

Brent Halvorsen. Defendant Halvorsen served as Director, Seasonal Planning & Analytics at CRH for approximately six years until his resignation on February 7, 2025. Halvorsen's base salary was $258,000 per annum. His employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. Halvorsen had direct access to and was instrumental in developing CRH's proprietary seasonal buying algorithms.

Lucia Fernandez-Gill. Defendant Fernandez-Gill served as Director, Vendor Relations (Domestic) at CRH for approximately five years until her resignation on February 7, 2025. Fernandez-Gill's base salary was $248,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Fernandez-Gill managed CRH's relationships with its top domestic vendors and had direct access to CRH's proprietary vendor negotiation playbooks and spend data.

Nathan Tsao. Defendant Tsao served as Senior Manager, eCommerce Merchandising at CRH for approximately three years until his resignation on February 7, 2025. Tsao's base salary was $195,000 per annum. His employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions.

Kira Johansson. Defendant Johansson served as Senior Manager, Category Analytics at CRH for approximately four years until her resignation on February 7, 2025. Johansson's base salary was $192,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Johansson was responsible for the development and maintenance of CRH's customer segmentation models and category performance analytics.

All eight employment agreements are governed by the laws of the State of Delaware and contain substantially similar restrictive covenant frameworks, including: (i) non-competition clauses restricting competitive employment for periods of twelve to eighteen months following termination; (ii) non-solicitation of employees clauses for periods of eighteen to twenty-four months following termination; (iii) non-solicitation of vendors clauses; and (iv) perpetual confidentiality obligations with respect to trade secrets and proprietary information. A detailed comparison of each employee's specific restrictive covenant terms is set forth in the Declaration of Theresa Yun-Park and Exhibit A thereto.

3. Defendant Verdana Commerce Group, Inc. Defendant Verdana Commerce Group, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana is a privately held omnichannel retail and ecommerce company specializing in home goods, apparel, and seasonal décor. For FY2024, Verdana's estimated revenue was approximately $1.9 billion.

In the third quarter of 2023, a majority stake in Verdana was acquired by Greystone Capital Partners, LP, acting through its investment vehicle Greystone Capital Fund VII, LP — a 2022-vintage fund with approximately $8.5 billion in committed capital — in a transaction valued at approximately $2.4 billion in enterprise value. Verdana's CEO is Warren Dietrich, and its General Counsel is Helen Tsoi.

Verdana is a direct competitor of CRH. The two companies compete head-to-head in at least 28 overlapping product categories, including home goods, seasonal décor, private-label apparel, and hardlines merchandise. Both companies operate brick-and-mortar retail locations and direct-to-consumer ecommerce platforms, and both target substantially similar customer demographics.

In January 2025, Verdana publicly announced a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. Notably, Verdana's announcement specifically cited expansion into product categories that represent CRH's strongest competitive positions: private-label home goods and seasonal décor. This announcement came within days of the initiation of Verdana's recruitment of the Rathore Group and underscores the strategic motivation behind Verdana's raid on CRH's merchandising leadership.

On February 14, 2025, Verdana issued a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," publicly announcing the hiring of all eight members of the Rathore Group. The press release touted the group's "deep industry expertise" and "proven track record of building category-leading merchandise strategies," making clear that Verdana intended to deploy the Rathore Group in the very competitive capacities that their restrictive covenants prohibit.

B. The Employment Agreements and Restrictive Covenants

Each of the eight individual defendants executed a written employment agreement with CRH that contains comprehensive restrictive covenant provisions. The existence, authenticity, and specific terms of each agreement are attested to by the Declaration of Theresa Yun-Park, General Counsel of CRH, and copies of each agreement are attached as exhibits thereto.

Defendant Rathore executed her original Employment Agreement with CRH on June 3, 2019, upon the commencement of her employment as Vice President of Merchandising. On March 15, 2021, upon her promotion to Senior Vice President of Merchandising, Rathore executed an Amended and Restated Employment Agreement (the "Rathore Agreement") that superseded the 2019 agreement and updated and expanded the restrictive covenant provisions. The execution of the Rathore Agreement was supported by independent consideration in the form of a $150,000 one-time promotion bonus paid concurrently with the signing, an enhanced RSU grant with a face value of $725,000 subject to four-year vesting, an increase in base salary, and an enhanced target bonus percentage. Rathore acknowledged in writing in Section 7(a) of the Rathore Agreement that the consideration provided was adequate and that the restrictive covenants were reasonable and necessary to protect CRH's legitimate business interests.

The remaining seven individual defendants each executed employment agreements containing materially similar restrictive covenant provisions at or around the commencement of their respective employment with CRH, with certain defendants executing amended or supplemental agreements upon promotion or role changes.

The restrictive covenants applicable to all eight individual defendants share a common framework:

(i) Non-Competition. Each defendant agreed not to, for a period of twelve months (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson) or eighteen months (Rathore, Linden, and Kaczmarek) following the termination of employment, directly or indirectly engage in, render services to, or accept employment with any business entity that competes with CRH in the retail sale of merchandise, within the United States.

(ii) Non-Solicitation of Employees. Each defendant agreed not to, for a period of eighteen months (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson) or twenty-four months (Rathore, Linden, and Kaczmarek) following the termination of employment, directly or indirectly solicit, recruit, hire, or induce any employee of CRH to leave CRH's employment.

(iii) Non-Solicitation of Vendors. Each defendant agreed not to, for a period commensurate with the non-competition period, directly or indirectly solicit or divert any vendor, supplier, or business partner of CRH for the purpose of providing goods or services to a competing enterprise.

(iv) Confidentiality. Each defendant agreed that, in perpetuity following the termination of employment, he or she would not disclose, use, or exploit any Confidential Information or trade secrets of CRH, as those terms are defined in the respective employment agreements.

All eight employment agreements contain choice-of-law provisions selecting the laws of the State of Delaware as the governing law and consent-to-jurisdiction provisions designating the Court of Chancery of the State of Delaware as a proper forum for the adjudication of disputes arising under the agreements.

C. Confidential Information and Trade Secrets Accessible to the Defendants

The members of the Rathore Group collectively had direct, unrestricted access to CRH's most sensitive proprietary information and trade secrets. As set forth in the Declaration of Theresa Yun-Park, CRH maintains rigorous information security protocols, including role-based access controls, multi-factor authentication for sensitive systems, confidentiality designations on proprietary documents, and mandatory confidentiality training for all employees with access to sensitive materials. Despite these protections, the nature of the Rathore Group's senior roles required that they be granted broad access to the information most critical to CRH's competitive position.

The categories of confidential information and trade secrets to which the Rathore Group had access include, but are not limited to, the following:

Project Ridgeline. In October 2024, CRH completed a confidential five-year strategic category expansion plan known internally as "Project Ridgeline." This initiative, spearheaded by Rathore and her team, represents the culmination of over eighteen months of strategic analysis, vendor negotiations, market research, and financial modeling. Project Ridgeline encompasses CRH's proprietary plans for expansion into new product categories, vendor-specific commercial terms (including rebate structures, exclusivity arrangements, and volume commitments), private-label margin targets for planned product launches through 2029, and ecommerce assortment algorithms designed to optimize CRH's online merchandise mix. The Project Ridgeline materials were classified as "Strictly Confidential — Executive Distribution Only" and access was limited to members of CRH's Executive Leadership Team and the merchandising leadership group. Each member of the Rathore Group had direct access to all or substantially all of the Project Ridgeline materials.

Proprietary Vendor Negotiation Playbooks. CRH maintains detailed playbooks governing its negotiation strategy with each of its top vendor partners. These playbooks contain CRH's target pricing, volume thresholds for rebate eligibility, walk-away positions, historical negotiation outcomes, and strategic priorities for each vendor relationship. The playbooks were developed over years through iterative vendor interactions and are not disclosed to any party outside of CRH.

Seasonal Buying Algorithms. CRH has developed proprietary algorithms that drive its seasonal buying decisions, optimizing inventory levels, markdown timing, and assortment composition based on historical sales data, regional demographic information, and predictive analytics. These algorithms represent a significant competitive advantage in CRH's seasonal merchandise categories and were maintained within CRH's analytics platform with restricted access.

Private-Label Sourcing Strategies and Cost Models. CRH's private-label product lines are among its highest-margin offerings and represent a key pillar of CRH's long-term growth strategy. CRH maintains proprietary sourcing strategies, including supplier identification and qualification methodologies, cost models, landed cost analyses, and target margin structures that are closely guarded trade secrets.

Customer Segmentation Data. CRH has invested millions of dollars in developing granular customer segmentation models that inform its merchandising, marketing, and promotional strategies. These models incorporate demographic, psychographic, transactional, and behavioral data derived from CRH's loyalty program (with over 22 million active members) and ecommerce platform, and represent a proprietary analytical asset that is central to CRH's competitive positioning.

As set forth in the Declaration of Theresa Yun-Park, each of these categories of information satisfies the definition of a "trade secret" under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001(4): each derives independent economic value 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 CRH has taken reasonable measures to maintain the secrecy of each.

D. The Coordinated Departure

The facts establishing the premeditated, coordinated nature of the Rathore Group's departure are set forth in detail in the Declarations of Roland Ashby, Dr. Rajiv Anand, and Sandra Fielding, and are summarized in the chronology below.

January 6, 2025. Verdana CEO Warren Dietrich and Greystone Capital Partners Managing Partner Elliot Westbrook met with Priya Rathore at a private dinner at a restaurant in New York City. The occurrence of this meeting was discovered through the investigation conducted by Aurelian Investigations Group Inc. ("Aurelian"), a private investigation firm retained by CRH, and is attested to in the Declaration of Sandra Fielding, Aurelian's lead investigator on this engagement. Upon information and belief, this dinner was the initiating event of Verdana's coordinated recruitment of the entire Rathore Group.

January 13–24, 2025. Between January 13 and January 24, 2025, a series of encrypted messaging exchanges took place between Rathore and the other seven members of the Rathore Group. These communications, the existence and timing of which were confirmed through forensic analysis of CRH-issued mobile devices by Pinnacle Forensics LLC ("Pinnacle"), discussed the timing of the group's collective departure from CRH, the status of offer negotiations with Verdana, and logistical coordination regarding the simultaneous submission of resignations. The Declaration of Dr. Rajiv Anand, Pinnacle's engagement lead, details the forensic methodology employed and the findings of the analysis.

January 27, 2025. Rathore signed her offer letter with Verdana.

January 28 – February 4, 2025. The remaining seven members of the Rathore Group — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — each signed offer letters with Verdana over a one-week period. The aggregate sign-on bonuses offered to all eight members of the Rathore Group totaled $6,200,000, comprising $1,500,000 for Rathore and $4,700,000 in the aggregate for the other seven defendants.

January 10 – February 4, 2025. During the precise window in which the Rathore Group was negotiating their departures and signing offer letters with Verdana, forensic evidence gathered by Pinnacle Forensics establishes that 14,327 files — approximately 2.8 gigabytes of data — were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts associated with individual members of the Rathore Group. The exfiltrated files include, among other materials, Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data. The Declaration of Dr. Rajiv Anand sets forth the forensic evidence in detail, including the identification of specific user accounts, download timestamps, file names and types, and cloud storage destinations.

February 7, 2025 (Friday). At precisely 4:47 PM Pacific Standard Time, all eight members of the Rathore Group submitted simultaneous resignation letters via email to their respective supervisors and to CRH's Human Resources department. Each resignation letter was effective immediately. The simultaneous timing — eight resignation emails sent within the same minute — is, by itself, compelling evidence of coordination.

February 10, 2025 (Monday). On the next business day following the resignations, CRH Chief People Officer Roland Ashby alerted General Counsel Theresa Yun-Park to the mass departure and initiated an internal investigation.

February 12, 2025. CRH's in-house legal team confirmed the existence and specific terms of each departing employee's restrictive covenant provisions. Simultaneously, CRH's Information Technology department completed an initial audit that identified the data exfiltration described above and escalated the matter to Pinnacle Forensics for a comprehensive forensic investigation.

February 14, 2025. Verdana publicly announced the hiring of the Rathore Group in a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth." The press release identified each member of the Rathore Group by name and title and described their planned roles at Verdana in merchandising leadership.

February 18, 2025. CRH retained the law firm of Calderwood & Harkness LLP (matter number 1038-00006) to represent CRH in connection with the enforcement of the restrictive covenants, the recovery of confidential information, and related claims.

February 25, 2025. Calderwood & Harkness, on behalf of CRH, sent formal cease-and-desist letters to all eight members of the Rathore Group, to Verdana Commerce Group, Inc., and to Greystone Capital Partners, LP. The letters demanded immediate compliance with the restrictive covenants, the return or certified destruction of all CRH confidential information and trade secrets, and the cessation of any use of CRH proprietary materials by Verdana.

February 27, 2025. The law firm of Whitfield, Nygaard & Doyle LLP, through lead partner Catherine Nygaard and associate Travis Beaumont, entered an appearance on behalf of the eight individual defendants. The law firm of Blackhall & Soren LLP, through lead partner Gavin Blackhall and senior associate Meredith Lau, entered an appearance on behalf of Verdana Commerce Group, Inc.

As of the date of this filing, defendants have not complied with the demands set forth in the cease-and-desist letters. No CRH confidential information or trade secrets have been returned. No certifications of destruction have been provided. And, upon information and belief, the individual defendants remain employed by or are in the process of commencing employment with Verdana in merchandising-related roles that directly violate their restrictive covenants.

III. LEGAL STANDARD

The Court of Chancery possesses broad equitable authority to issue temporary restraining orders and preliminary injunctions to preserve the status quo and prevent irreparable harm pending a final determination on the merits. Court of Chancery Rule 65 governs the procedures for the issuance of such relief.

To obtain a preliminary injunction, a movant must demonstrate: (1) a reasonable probability of success on the merits of the underlying claims; (2) an imminent threat of irreparable injury if the injunction is not granted; (3) that the balance of hardships tips in favor of the movant; and (4) that the issuance of the injunction would serve the public interest. See Revlon, Inc. v. MacAndrews & Forbaci Holdings, Inc., 506 A.2d 173, 179 (Del. 1986); SI Mgmt. L.P. v. Wininger, 707 A.2d 37, 40 (Del. 1998). The same standard applies to the issuance of a temporary restraining order, which serves to maintain the status quo for a brief period pending a full hearing on the preliminary injunction motion.

Delaware law recognizes and enforces restrictive covenants in employment agreements where such covenants are reasonable in scope, duration, and geographic limitation and are designed to protect legitimate business interests of the employer. See Kan-Di-Ki, LLC v. Susi, 2015 WL 4503210, at 6 (Del. Ch. July 22, 2015). Legitimate protectable interests that justify the enforcement of restrictive covenants include, among others, the protection of trade secrets and confidential information, the preservation of customer and vendor relationships, the protection of goodwill, and the maintenance of workforce stability. See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783, at 4 (Del. Ch. Mar. 27, 2020). Delaware courts have consistently held that an employer is entitled to injunctive relief to enforce reasonable restrictive covenants where a former employee has accepted employment with a direct competitor in violation of a non-competition clause, particularly where the employee had access to trade secrets and confidential information. See EDIX Media Grp., Inc. v. Mahani, 2006 WL 3742595, at *6 (Del. Ch. Dec. 12, 2006).

With respect to the issuance of a TRO, Court of Chancery Rule 65(b) provides that a TRO may be granted without notice to the adverse party upon a showing that immediate and irreparable injury will result before the adverse party can be heard. Here, CRH is not seeking ex parte relief; rather, the Verified Complaint and this Motion have been served on all defendants through their counsel of record. CRH nonetheless seeks the immediate entry of a TRO because of the imminent risk that CRH's trade secrets are being disseminated to and integrated into Verdana's operations with each passing day, causing irreparable harm that cannot be remedied after the fact.

IV. ARGUMENT

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

CRH has established a strong likelihood of prevailing on each of the five counts asserted in the Verified Complaint. The legal and factual bases for each claim are addressed in turn.

1. Breach of Restrictive Covenants (Count I — All Eight Individual Defendants). Each of the eight individual defendants signed a binding employment agreement with CRH containing a clear, unambiguous non-competition clause. These provisions are governed by Delaware law and are enforceable under well-established Delaware precedent.

The non-competition periods applicable to each defendant are as follows: Rathore, Linden, and Kaczmarek are each subject to an eighteen-month non-competition period; Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson are each subject to a twelve-month non-competition period. In each case, the non-competition period began to run on February 7, 2025, the date of the simultaneous resignations. As of the date of this filing, less than four weeks have elapsed since the commencement of the restrictive periods.

The geographic scope of each non-competition clause is the United States — a scope that is eminently reasonable in light of CRH's nationwide operational footprint, which includes 387 retail locations across 34 states and a direct-to-consumer ecommerce platform that serves customers in all 50 states.

Each defendant has accepted employment with Verdana, a company that directly competes with CRH in at least 28 overlapping product categories. Verdana operates in the same market segments (home goods, seasonal décor, apparel, hardlines), through the same distribution channels (brick-and-mortar and ecommerce), and targets the same customer demographics as CRH. The acceptance of employment at Verdana in merchandising roles is precisely the type of competitive activity that the non-competition clauses were designed to prevent.

The restrictive covenants are supported by adequate consideration. For each defendant, the consideration included the initial employment itself, access to CRH's confidential information and trade secrets during the course of employment, promotions, salary increases, annual bonuses, RSU grants, and other benefits. For Rathore specifically, the Amended and Restated Employment Agreement executed on March 15, 2021 was supported by independent consideration in the form of a $150,000 one-time promotion bonus and an enhanced RSU grant with a face value of $725,000. Delaware law recognizes that continued employment and access to confidential information constitute adequate consideration for a restrictive covenant entered into during the course of an employment relationship. See Hough Assocs., Inc. v. Hill, 2007 WL 148751, at *5 (Del. Ch. Jan. 17, 2007).

The covenants are reasonable in all respects. The durations of twelve to eighteen months are well within the range that Delaware courts have consistently upheld. The geographic scope of the United States is coextensive with CRH's actual business operations and competitive landscape. The scope of restricted activity — merchandising roles at a direct competitor — is narrowly tailored to the functional areas in which the defendants had access to CRH's most sensitive information and is not a blanket prohibition on all employment.

The covenants protect legitimate business interests that Delaware law recognizes as valid bases for post-employment restrictions. CRH's trade secrets — including, most critically, the Project Ridgeline strategic plan — constitute proprietary assets of enormous value. CRH's vendor relationships, developed over years of negotiation and interaction, represent goodwill that would be irreparably harmed if the defendants were permitted to deploy CRH's proprietary vendor intelligence on behalf of a competitor. CRH's seasonal buying algorithms, private-label sourcing strategies, and customer segmentation data provide competitive advantages that took years to develop and that cannot be effectively protected by means less restrictive than enforcing the covenants the defendants agreed to.

In sum, CRH is likely to succeed on its claim that each individual defendant is in breach of his or her non-competition covenant by accepting employment with Verdana in a merchandising capacity.

2. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants). Each employment agreement contains a perpetual confidentiality clause obligating the defendant to maintain the secrecy of all Confidential Information (as defined in the respective agreements) following the termination of employment. The confidentiality obligations are not limited in time and extend to all information obtained during the course of employment that is not publicly available.

The forensic analysis conducted by Pinnacle Forensics LLC has confirmed that the individual defendants downloaded 14,327 files — approximately 2.8 gigabytes — of confidential CRH materials from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts between January 10 and February 4, 2025. As detailed in the Declaration of Dr. Rajiv Anand, the exfiltrated files include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data — each of which constitutes Confidential Information under the applicable employment agreements.

The timing of the exfiltration — which occurred during the precise window in which the defendants were secretly negotiating their departures and signing offer letters with Verdana — is powerful evidence that the files were downloaded for the purpose of taking them to Verdana. There is no legitimate business reason for senior employees to download thousands of proprietary files to personal cloud accounts in the weeks immediately preceding a coordinated resignation.

Despite CRH's demands in the February 25 cease-and-desist letters, no defendant has returned any CRH confidential information or certified the destruction of any copies. CRH is therefore likely to succeed on its claim that each individual defendant has breached and continues to breach his or her contractual confidentiality obligations.

3. Misappropriation of Trade Secrets Under DUTSA (Count III — All Eight Individual Defendants and Verdana). The Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), provides for injunctive relief to prevent actual or threatened misappropriation of trade secrets. 6 Del. C. § 2002(a). Under DUTSA, a "trade secret" is defined as information that (i) derives independent economic value 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 (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 6 Del. C. § 2001(4).

The Project Ridgeline materials, proprietary vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies and cost models, and customer segmentation data at issue in this case satisfy both prongs of this definition.

First, each category of information derives independent economic value from not being generally known or readily ascertainable. Project Ridgeline, for example, represents CRH's five-year strategic roadmap for category expansion, encompassing proprietary analysis, vendor-specific commercial terms, margin targets, and algorithmic models that together constitute CRH's competitive blueprint. If disclosed to a competitor, this information would enable the competitor to anticipate CRH's strategic moves, undercut CRH's vendor negotiations, replicate CRH's private-label strategies, and capture market share that CRH expected to gain through first-mover advantage. CRH's merchandising division generated $2.3 billion in GMV in FY2024; the trade secrets at issue are central to CRH's ability to maintain and grow this revenue base.

Second, CRH has taken reasonable measures to maintain the secrecy of each category of information. As detailed in the Declaration of Theresa Yun-Park, CRH's security measures include: role-based access controls limiting access to sensitive systems to employees with a demonstrated need-to-know; multi-factor authentication for access to Aldermere Systems and Pinnacle Health IT environments; confidentiality designations on proprietary documents (including "Strictly Confidential — Executive Distribution Only" for Project Ridgeline materials); mandatory confidentiality training for all employees with access to sensitive data; and the execution of written confidentiality agreements by all employees with access to trade secrets.

The defendants acquired these trade secrets through the course of their employment with CRH — a relationship of trust and confidence. Rather than return this information upon their departure, they exfiltrated 14,327 files to personal cloud accounts and resigned simultaneously to join a direct competitor. This conduct constitutes misappropriation under DUTSA, both through the acquisition of trade secrets by improper means (the exfiltration) and through the actual or threatened disclosure or use of trade secrets acquired through a relationship of confidence. See 6 Del. C. § 2001(2).

Verdana is also liable for misappropriation under DUTSA. Upon information and belief, Verdana knew or had reason to know that the Rathore Group possessed CRH's trade secrets at the time of their hiring. Verdana is a direct competitor operating in the same industry, and it is implausible that Verdana offered $6.2 million in aggregate sign-on bonuses to recruit an entire merchandising team without the expectation that the team would bring its institutional knowledge — including CRH's trade secrets — to bear on Verdana's operations. Verdana's publicly announced "transformational growth initiative" targeting expansion into CRH's strongest categories further demonstrates that Verdana intended to exploit the Rathore Group's access to CRH's proprietary strategies.

4. Tortious Interference with Contractual Relations (Count IV — Verdana). To establish a claim for tortious interference with contractual relations under Delaware law, a plaintiff must demonstrate: (1) the existence of a valid contract; (2) the defendant's knowledge of the contract; (3) intentional interference by the defendant that induced or caused a breach of the contract; (4) the absence of justification; and (5) resulting damages. See Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983, 992 (Del. Ch. 1987).

Each element is satisfied here. First, as discussed above, each individual defendant executed a valid employment agreement containing enforceable restrictive covenants. Second, Verdana had actual or constructive knowledge of the restrictive covenants. As a direct competitor of CRH operating in the same industry, Verdana knew or should have known that senior merchandising executives at CRH would be subject to post-employment restrictive covenants. Indeed, it is standard industry practice for executives at the level of the Rathore Group to be bound by non-competition and confidentiality agreements, and Verdana's own employment agreements contain similar provisions. Moreover, upon information and belief, Verdana made no effort to inquire about or ensure compliance with the Rathore Group's existing contractual obligations to CRH before extending offers of employment.

Third, Verdana intentionally induced the Rathore Group to breach their covenants. The evidence of intentional interference is overwhelming. Verdana's CEO, Warren Dietrich, and Greystone's Managing Partner, Elliot Westbrook, personally initiated the recruitment by meeting with Rathore at a private dinner in New York City on January 6, 2025. Verdana offered the Rathore Group an aggregate of $6.2 million in sign-on bonuses — extraordinary financial inducements that were plainly designed to overcome any reluctance the defendants might have had about breaching their contractual obligations. Verdana facilitated the coordinated, simultaneous departure of the entire group, and publicly announced the hiring in a press release on February 14, 2025, demonstrating its deliberate intent to deploy the Rathore Group in direct competition with CRH.

Fourth, Verdana's interference lacks justification. There is no privilege or business justification that excuses the deliberate inducement of employees to breach valid restrictive covenants and misappropriate their former employer's trade secrets.

Fifth, CRH has suffered and will continue to suffer damages as a result of Verdana's tortious interference, including the loss of the benefit of the restrictive covenants, the loss of the competitive advantage conferred by its trade secrets, and the disruption to its merchandising operations.

5. Civil Conspiracy (Count V — All Defendants). CRH has also asserted a claim for civil conspiracy against all defendants. Under Delaware law, civil conspiracy requires an agreement between two or more persons to commit an unlawful act or to accomplish a lawful objective by unlawful means, coupled with the commission of an overt act in furtherance of the agreement that causes damage to the plaintiff. See Nicolet, Inc. v. Nutt, 525 A.2d 146, 149 (Del. 1987).

The evidence of a conspiracy is compelling. The simultaneous resignation of all eight members of the Rathore Group at precisely 4:47 PM PST on February 7, 2025 — eight resignation emails transmitted within the same minute — is, standing alone, powerful circumstantial evidence of a coordinated plan. This evidence is buttressed by the encrypted messaging exchanges among the Rathore Group between January 13 and January 24, 2025, which discussed the timing of the departures, the status of offer negotiations with Verdana, and the logistics of the simultaneous resignations. The exfiltration of 14,327 files to personal cloud accounts during the same period constitutes overt acts in furtherance of the conspiracy. And Verdana and Greystone facilitated the conspiracy through the recruitment dinner on January 6, 2025, the extension of accelerated offer letters, and the provision of extraordinary financial inducements — $6.2 million in aggregate sign-on bonuses — designed to ensure the participation of all eight members of the group.

The concerted action was directed at breaching the restrictive covenants, misappropriating CRH's trade secrets, and causing economic harm to CRH by stripping it of its entire senior merchandising leadership team and transferring that team — and CRH's proprietary strategies — to a direct competitor.

B. CRH Will Suffer Imminent, Irreparable Harm Absent Injunctive Relief

The harm that CRH will suffer absent injunctive relief is both imminent and irreparable. Delaware courts have recognized that irreparable harm is presumed in cases involving the misappropriation of trade secrets, because once confidential information has been disclosed to a competitor, its secrecy — and the competitive advantage it confers — is permanently destroyed. See Beard Research, Inc. v. Kates, 8 A.3d 573, 601–02 (Del. Ch. 2010), aff'd sub nom. ASDI, Inc. v. Beard Research, Inc., 11 A.3d 749 (Del. 2010).

The harm to CRH cannot be adequately compensated by monetary damages for several independent reasons.

First, once CRH's trade secrets are disclosed to Verdana, their value is permanently destroyed. There is no mechanism by which CRH can "unring the bell" or restore the competitive advantage it enjoyed before the disclosure. Project Ridgeline, for example, represents years of strategic investment involving dozens of senior employees, hundreds of vendor negotiations, and millions of dollars in analytical resources. If Verdana gains access to this roadmap — or has already gained access through the exfiltrated files — CRH's planned first-mover advantage in multiple high-value product categories will be eliminated before CRH can execute on its own strategy.

Second, CRH's vendor relationships, which are the product of years of careful cultivation and negotiation, would be irreparably undermined if Verdana leverages CRH's proprietary vendor negotiation playbooks. CRH's vendors will lose confidence in CRH's ability to safeguard confidential commercial terms if those terms are deployed by a competitor. The resulting damage to CRH's vendor relationships would be incalculable and could take years to repair, if repair is even possible.

Third, CRH's seasonal buying algorithms and private-label sourcing strategies provide a competitive edge that, once compromised, cannot be reconstructed through the expenditure of money alone. These assets represent the accumulated intellectual capital of CRH's merchandising organization, refined through years of iterative testing and optimization. A monetary award cannot restore the exclusivity of information that has been shared with a competitor.

Fourth, the loss of CRH's entire senior merchandising leadership team to a single competitor has already disrupted CRH's operations. Martin Cho, Vice President of Merchandising, has been pressed into service as interim acting head of the division, but he lacks the institutional knowledge and strategic context that the Rathore Group possessed. Allowing the individual defendants to commence competing work at Verdana would compound this operational disruption by enabling Verdana to use CRH's own strategies against it while CRH is simultaneously rebuilding its merchandising leadership.

Fifth, each day that passes without injunctive relief increases the risk that CRH's confidential information is being integrated into Verdana's operations, reviewed by Verdana's leadership, and disseminated to Verdana's vendors and business partners. The longer the delay, the more deeply embedded the confidential information becomes in Verdana's business, and the more difficult it will be to remedy the harm even if CRH ultimately prevails on the merits.

CRH's merchandising division represents $2.3 billion in gross merchandise value. Even a fractional competitive loss attributable to the misuse of CRH's trade secrets would constitute damages that are incalculable and unrecoverable. The irreparable nature of this harm is precisely the type of injury that equity was designed to prevent.

C. The Balance of Hardships Favors CRH

The balance of hardships tips decisively in CRH's favor.

On the defendants' side, the individual defendants voluntarily agreed to the restrictive covenants as a condition of their employment and, in certain cases, as a condition of their promotions. They received substantial consideration in exchange for these agreements — salaries ranging from $192,000 to $485,000, annual bonuses, RSU grants, promotion bonuses, and access to CRH's most sensitive proprietary information. Enforcement of the covenants that the defendants freely negotiated and executed does not impose an undue hardship; it merely holds them to the bargained-for obligations they agreed to assume. These are sophisticated professionals, each of whom is represented by experienced counsel. There is no suggestion that any defendant was coerced or lacked the capacity to understand the restrictive covenants at the time of execution.

The injunction CRH seeks would not bar the individual defendants from all employment. It would restrain them only from working in merchandising-related roles at Verdana — a single company — during the remaining period of their respective non-competition covenants. The defendants are free to seek employment in non-competitive capacities or with non-competing enterprises. This is a narrowly tailored restraint, not a broad prohibition on earning a livelihood.

As for Verdana, it will not suffer undue hardship from a temporary restraint. Verdana is a $1.9 billion revenue company backed by Greystone Capital Fund VII, a private equity fund with $8.5 billion in committed capital. Verdana has the financial resources to absorb any delay in onboarding the Rathore Group into merchandising roles. Verdana operated successfully before the Rathore Group's arrival and can continue to do so during the pendency of this proceeding.

By contrast, CRH faces catastrophic competitive harm if Verdana is permitted to deploy the Rathore Group — armed with CRH's most sensitive trade secrets — in direct competition during the applicable restrictive covenant periods. The asymmetry of hardships is stark: a temporary delay in the Rathore Group's commencement of merchandising work at Verdana is a minor inconvenience compared to the permanent destruction of CRH's trade secrets and competitive position.

D. The Public Interest Supports Injunctive Relief

The public interest weighs strongly in favor of granting the relief CRH seeks.

The public interest favors the enforcement of lawful contracts freely entered into by sophisticated parties. Delaware has a long-standing and well-articulated public policy supporting the enforceability of reasonable restrictive covenants in employment agreements. This policy serves important economic objectives: it encourages employers to invest in their workforce, to share confidential information with key employees who need it to perform their jobs, and to develop proprietary strategies and trade secrets that drive innovation and growth. Employers who cannot rely on the enforceability of restrictive covenants will be reluctant to make these investments, to the detriment of employees and the economy alike.

Permitting employees to breach their restrictive covenants with impunity — and allowing a competitor to orchestrate the wholesale defection of an entire functional team — would send a dangerous signal that contractual obligations can be circumvented through coordinated action and financial inducements. The resulting erosion of confidence in the enforceability of employment contracts would undermine the framework of trust and investment that supports business relationships in Delaware and nationwide.

Moreover, the integrity of the Court of Chancery's equitable remedies is served by providing swift relief where, as here, the facts demonstrate a deliberate, coordinated scheme to circumvent binding contractual obligations and misappropriate a competitor's trade secrets. The Court's willingness to act decisively in such circumstances is a cornerstone of the equitable jurisdiction that makes Delaware a preferred forum for the resolution of business disputes.

V. THE PROPOSED INJUNCTIVE RELIEF

A. Temporary Restraining Order

CRH respectfully requests that this Court enter a temporary restraining order, effective immediately upon entry and continuing for fourteen (14) days (or until the conclusion of the preliminary injunction hearing, whichever is earlier), providing as follows:

1. All eight individual defendants — Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson — are hereby restrained and enjoined from commencing, continuing, or engaging in any employment, consulting, advisory, or other service-providing role in merchandising, merchandising strategy, category management, vendor relations, private-label development, ecommerce merchandising, seasonal planning, or any substantially similar function at Verdana Commerce Group, Inc. or any of its subsidiaries, affiliates, successors, or assigns.

2. All eight individual defendants are ordered to immediately return to CRH and/or certify under oath the destruction of all CRH confidential information, trade secrets, and proprietary materials in their possession, custody, or control, whether in physical or electronic form, including but not limited to all files downloaded from CRH systems between January 10 and February 4, 2025, and to provide CRH with a sworn certification of compliance within five (5) business days of the entry of this Order.

3. Verdana Commerce Group, Inc. is hereby restrained and enjoined from employing, engaging, onboarding, or otherwise utilizing the services of any individual defendant in any merchandising-related capacity, as described in paragraph 1 above.

4. Verdana Commerce Group, Inc. is ordered to immediately sequester and preserve — and to refrain from accessing, using, reviewing, copying, or disseminating — any CRH confidential information or trade secrets that may be in its possession, custody, or control, including any materials received from or through any individual defendant, and to provide CRH's counsel with a sworn certification of compliance within five (5) business days of the entry of this Order.

B. Preliminary Injunction

CRH further respectfully requests that, following a hearing on notice to all defendants, this Court enter a preliminary injunction continuing the foregoing restraints through the pendency of this action or through the expiration of each individual defendant's applicable restrictive covenant period (twelve or eighteen months from February 7, 2025, as the case may be), whichever is earlier. The preliminary injunction should contain the same substantive provisions as the TRO set forth in Section V.A above, with such modifications as the Court deems appropriate in light of the evidence presented at the hearing.

C. Injunction Bond

CRH acknowledges that, pursuant to Court of Chancery Rule 65(c), the Court may condition the issuance of a TRO or preliminary injunction upon the posting of an injunction bond in an amount sufficient to protect the defendants against any damages they may sustain if it is later determined that the injunction was wrongfully issued. CRH is prepared to post an appropriate injunction bond as determined by the Court.

CRH proposes a bond in the amount of $2,500,000, to be issued through Broadview Surety Corp., 175 Water Street, Suite 2400, New York, New York 10038. CRH submits that this amount is sufficient to protect the defendants' interests in light of the narrowly tailored scope of the injunction sought, the strong likelihood of success on the merits, and the limited potential harm to defendants from a temporary restraint that merely holds them to their contractual obligations.

VI. SUPPORTING DECLARATIONS AND EXHIBITS

This Motion is supported by the following declarations and exhibits, each of which is filed concurrently herewith:

1. Declaration of Theresa Yun-Park, Senior Vice President and General Counsel of Cascade Retail Holdings Inc., attesting to: the existence and terms of the employment agreements executed by each individual defendant; the specific restrictive covenant provisions applicable to each defendant (with copies of each employment agreement attached as exhibits); the departing employees' access to Project Ridgeline and other categories of confidential information and trade secrets; the reasonable measures taken by CRH to maintain the secrecy of its proprietary information; the competitive overlap between CRH and Verdana in at least 28 product categories; and the nature and magnitude of the competitive harm posed by the Rathore Group's departure to Verdana.

2. Declaration of Roland Ashby, Chief People Officer of Cascade Retail Holdings Inc., attesting to: the circumstances of the coordinated resignations submitted by all eight individual defendants on February 7, 2025 at 4:47 PM PST; the resulting disruption to CRH's merchandising operations; the appointment of Martin Cho, Vice President of Merchandising, as interim acting head of the merchandising division; and the operational challenges CRH has faced and continues to face as a result of the simultaneous departure of its entire senior merchandising leadership team.

3. Declaration of Dr. Rajiv Anand, Engagement Lead, Pinnacle Forensics LLC, attesting to: the forensic methodology employed in the analysis of CRH's Aldermere Systems and Pinnacle Health IT environments; the identification and documentation of the exfiltration of 14,327 files (approximately 2.8 gigabytes) from CRH systems to personal cloud storage accounts between January 10 and February 4, 2025; the identification of specific user accounts, download timestamps, file names, file types, and cloud storage destinations; and the categorization of the exfiltrated files, including Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data.

4. Verified Complaint (filed concurrently), setting forth five counts: Count I — Br

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION
Filed: March 5, 2025
I. INTRODUCTION
Plaintiff Cascade Retail Holdings Inc. ("CRH" or "Plaintiff"), a publicly traded omnichannel retail company listed on the Nasdaq Global Select Market under the ticker symbol "CRHL" and headquartered in Seattle, Washington, respectfully moves this Court, pursuant to Court of Chancery Rules 65(a) and 65(b) and the inherent equitable authority of this Court, for the entry of a temporary restraining order ("TRO") and preliminary injunction against all nine defendants named herein.
CRH seeks emergency relief to prevent imminent, irreparable harm arising from a coordinated mass departure of eight senior merchandising employees — led by Defendant Priya Rathore ("Rathore"), CRH's former Senior Vice President of Merchandising — who resigned simultaneously on February 7, 2025 to join Defendant Verdana Commerce Group, Inc. ("Verdana" or "VCG"), a direct competitor of CRH operating in the same retail categories and geographic markets. The scope, timing, and orchestration of this departure are unprecedented in CRH's corporate history and bear every hallmark of a deliberate, premeditated raid designed to cripple CRH's merchandising operations and transplant its most valuable proprietary strategies to a rival.
Each of the eight individual defendants — Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson (collectively, the "Rathore Group") — is bound by a restrictive covenant contained in his or her employment agreement with CRH, including non-competition obligations ranging from twelve to eighteen months, non-solicitation of employees obligations ranging from eighteen to twenty-four months, non-solicitation of vendor obligations, and perpetual confidentiality obligations. All eight employment agreements are governed by the laws of the State of Delaware.
The departing employees did not merely hold senior titles. They collectively possessed direct, unrestricted access to CRH's most sensitive proprietary information, including a confidential five-year category expansion roadmap known internally as "Project Ridgeline," proprietary vendor negotiation playbooks that reflect years of relationship-building and commercial intelligence, seasonal buying algorithms that drive CRH's inventory optimization, private-label sourcing strategies and cost models underlying CRH's highest-margin product lines, and granular customer segmentation data that powers CRH's omnichannel marketing and merchandising decisions. In the hands of a direct competitor, this information would provide a roadmap to replicate — and undercut — CRH's most critical strategic initiatives.
The threat is not speculative. Forensic analysis conducted by Pinnacle Forensics LLC, a nationally recognized digital forensics firm, has confirmed that 14,327 files — approximately 2.8 gigabytes of data — were exfiltrated from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts belonging to members of the Rathore Group between January 10 and February 4, 2025. The exfiltrated files include, among other categories, Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation datasets. This exfiltration occurred during the precise window in which the Rathore Group was secretly negotiating their departures with Verdana.
Verdana, a $1.9 billion revenue omnichannel retailer backed by private equity sponsor Greystone Capital Partners, LP ("Greystone"), orchestrated this coordinated recruitment. Verdana's CEO, Warren Dietrich, and Greystone's Managing Partner, Elliot Westbrook, personally met with Rathore at a private dinner in New York City on January 6, 2025 to initiate the recruitment. Over the ensuing weeks, Verdana extended offer letters to all eight members of the Rathore Group, offering the group an aggregate of $6,200,000 in sign-on bonuses — including $1,500,000 for Rathore alone — to lure them away from CRH. This extraordinary financial inducement, combined with the coordinated timing and the deliberate targeting of an entire functional team, demonstrates that Verdana's objective was not simply to hire talented individuals, but to acquire, wholesale, the institutional knowledge, strategic plans, and competitive advantages that CRH developed over years and at enormous expense.
In light of the foregoing, CRH respectfully requests that the Court: (1) enter a TRO immediately restraining all eight individual defendants from commencing employment in merchandising roles at Verdana Commerce Group, Inc. or any of its affiliates; (2) order the immediate return of all CRH confidential information and trade secrets in the possession, custody, or control of all defendants, and certify the destruction of any copies thereof; (3) restrain Verdana from employing, engaging, or utilizing the services of the individual defendants in any merchandising-related capacity; (4) order Verdana to sequester and preserve any CRH confidential information or trade secrets in its possession; and (5) schedule a preliminary injunction hearing on an expedited basis.
II. STATEMENT OF FACTS
The following facts are drawn from the Verified Complaint, the supporting declarations, and the exhibits filed concurrently herewith, and are presented to establish the factual predicate for the emergency relief CRH seeks.
A. The Parties
1. Plaintiff Cascade Retail Holdings Inc. Plaintiff Cascade Retail Holdings Inc. is a corporation organized and existing under the laws of the State of Delaware. CRH is publicly traded on the Nasdaq Global Select Market under the ticker symbol "CRHL." CRH maintains its corporate headquarters at 2200 Elliott Avenue West, Suite 3400, Seattle, Washington 98119, and its registered agent for service of process in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801.
CRH is a leading omnichannel retailer operating 387 brick-and-mortar retail locations across 34 states and the District of Columbia, as well as a direct-to-consumer ecommerce platform serving customers nationwide. CRH's product assortment spans home goods, seasonal décor, apparel, hardlines, and private-label offerings, with a strategic emphasis on curated, high-margin private-label brands that differentiate CRH from its competitors.
For the fiscal year ended January 31, 2025 ("FY2024"), CRH reported annual revenue of approximately $6.82 billion. As of February 2025, CRH's market capitalization was approximately $4.1 billion. CRH's merchandising division — the division most directly affected by the events at issue in this proceeding — accounted for $2.3 billion in gross merchandise value ("GMV") in FY2024, representing a core driver of CRH's profitability and shareholder value.
CRH's senior leadership team includes Marcus Langford, Chief Executive Officer; Theresa Yun-Park, Senior Vice President and General Counsel; and Roland Ashby, Chief People Officer. Each of these individuals has provided sworn declarations in support of this Motion.
2. The Individual Defendants (the "Rathore Group"). The eight individual defendants are former senior employees of CRH's merchandising division who resigned simultaneously on February 7, 2025 and accepted employment with Verdana. The biographical and employment details of each are set forth below.
Priya Rathore. Defendant Rathore served as CRH's Senior Vice President of Merchandising from March 15, 2021 until her resignation on February 7, 2025. She initially joined CRH on June 3, 2019 as Vice President of Merchandising before being promoted to the SVP role. In her capacity as SVP, Merchandising, Rathore had ultimate operational responsibility for all merchandising strategy, vendor relationships, private-label development, seasonal planning, category management, and ecommerce assortment decisions across CRH's entire retail footprint. She reported directly to CRH's Chief Operating Officer and served on CRH's Executive Leadership Team.
Rathore's compensation at CRH included a base salary of $485,000 per annum, a target annual bonus of $290,000 (representing 60% of base salary), and a restricted stock unit ("RSU") grant with a face value of $725,000 subject to four-year vesting from the date of her March 15, 2021 promotion. Upon her promotion to SVP, Rathore received a one-time promotion bonus of $150,000 and executed an Amended and Restated Employment Agreement dated March 15, 2021, which superseded her original Employment Agreement dated June 3, 2019. Both agreements contained restrictive covenant provisions, and the Amended and Restated Employment Agreement included an eighteen-month non-competition period and a twenty-four-month non-solicitation of employees period, in addition to non-solicitation of vendor and perpetual confidentiality obligations. Rathore's residence is located at 14 Harbor Ridge Lane, Bellevue, Washington 98004.
Upon information and belief, Rathore has accepted the position of President, Merchandising & Strategy at Verdana, with a compensation package including a base salary of $650,000, a sign-on bonus of $1,500,000, a target annual bonus of $520,000 (representing 80% of base salary), and an equity grant of 1.5% of VCG's fully diluted equity.
Derek Linden. Defendant Linden served as Vice President, Hardlines Merchandising at CRH for approximately seven years until his resignation on February 7, 2025. Linden's base salary was $340,000 per annum. His employment agreement contained an eighteen-month non-competition clause and other restrictive covenant provisions.
Sonia Kaczmarek. Defendant Kaczmarek served as Vice President, Softlines Merchandising at CRH for approximately five years until her resignation on February 7, 2025. Kaczmarek's base salary was $325,000 per annum. Her employment agreement contained an eighteen-month non-competition clause and other restrictive covenant provisions.
Amara Osei. Defendant Osei served as Director, Private Label Strategy at CRH for approximately four years until her resignation on February 7, 2025. Osei's base salary was $265,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Osei had direct responsibility for the strategic development and profitability of CRH's private-label portfolio, which generates among the highest gross margins of any product category in CRH's assortment.
Brent Halvorsen. Defendant Halvorsen served as Director, Seasonal Planning & Analytics at CRH for approximately six years until his resignation on February 7, 2025. Halvorsen's base salary was $258,000 per annum. His employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. Halvorsen had direct access to and was instrumental in developing CRH's proprietary seasonal buying algorithms.
Lucia Fernandez-Gill. Defendant Fernandez-Gill served as Director, Vendor Relations (Domestic) at CRH for approximately five years until her resignation on February 7, 2025. Fernandez-Gill's base salary was $248,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Fernandez-Gill managed CRH's relationships with its top domestic vendors and had direct access to CRH's proprietary vendor negotiation playbooks and spend data.
Nathan Tsao. Defendant Tsao served as Senior Manager, eCommerce Merchandising at CRH for approximately three years until his resignation on February 7, 2025. Tsao's base salary was $195,000 per annum. His employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions.
Kira Johansson. Defendant Johansson served as Senior Manager, Category Analytics at CRH for approximately four years until her resignation on February 7, 2025. Johansson's base salary was $192,000 per annum. Her employment agreement contained a twelve-month non-competition clause and other restrictive covenant provisions. In her role, Johansson was responsible for the development and maintenance of CRH's customer segmentation models and category performance analytics.
All eight employment agreements are governed by the laws of the State of Delaware and contain substantially similar restrictive covenant frameworks, including: (i) non-competition clauses restricting competitive employment for periods of twelve to eighteen months following termination; (ii) non-solicitation of employees clauses for periods of eighteen to twenty-four months following termination; (iii) non-solicitation of vendors clauses; and (iv) perpetual confidentiality obligations with respect to trade secrets and proprietary information. A detailed comparison of each employee's specific restrictive covenant terms is set forth in the Declaration of Theresa Yun-Park and Exhibit A thereto.
3. Defendant Verdana Commerce Group, Inc. Defendant Verdana Commerce Group, Inc. is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 400 Christiana Gateway, Suite 700, Wilmington, Delaware 19801. Verdana is a privately held omnichannel retail and ecommerce company specializing in home goods, apparel, and seasonal décor. For FY2024, Verdana's estimated revenue was approximately $1.9 billion.
In the third quarter of 2023, a majority stake in Verdana was acquired by Greystone Capital Partners, LP, acting through its investment vehicle Greystone Capital Fund VII, LP — a 2022-vintage fund with approximately $8.5 billion in committed capital — in a transaction valued at approximately $2.4 billion in enterprise value. Verdana's CEO is Warren Dietrich, and its General Counsel is Helen Tsoi.
Verdana is a direct competitor of CRH. The two companies compete head-to-head in at least 28 overlapping product categories, including home goods, seasonal décor, private-label apparel, and hardlines merchandise. Both companies operate brick-and-mortar retail locations and direct-to-consumer ecommerce platforms, and both target substantially similar customer demographics.
In January 2025, Verdana publicly announced a "transformational growth initiative" targeting $4 billion in annual revenue by 2028. Notably, Verdana's announcement specifically cited expansion into product categories that represent CRH's strongest competitive positions: private-label home goods and seasonal décor. This announcement came within days of the initiation of Verdana's recruitment of the Rathore Group and underscores the strategic motivation behind Verdana's raid on CRH's merchandising leadership.
On February 14, 2025, Verdana issued a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth," publicly announcing the hiring of all eight members of the Rathore Group. The press release touted the group's "deep industry expertise" and "proven track record of building category-leading merchandise strategies," making clear that Verdana intended to deploy the Rathore Group in the very competitive capacities that their restrictive covenants prohibit.
B. The Employment Agreements and Restrictive Covenants
Each of the eight individual defendants executed a written employment agreement with CRH that contains comprehensive restrictive covenant provisions. The existence, authenticity, and specific terms of each agreement are attested to by the Declaration of Theresa Yun-Park, General Counsel of CRH, and copies of each agreement are attached as exhibits thereto.
Defendant Rathore executed her original Employment Agreement with CRH on June 3, 2019, upon the commencement of her employment as Vice President of Merchandising. On March 15, 2021, upon her promotion to Senior Vice President of Merchandising, Rathore executed an Amended and Restated Employment Agreement (the "Rathore Agreement") that superseded the 2019 agreement and updated and expanded the restrictive covenant provisions. The execution of the Rathore Agreement was supported by independent consideration in the form of a $150,000 one-time promotion bonus paid concurrently with the signing, an enhanced RSU grant with a face value of $725,000 subject to four-year vesting, an increase in base salary, and an enhanced target bonus percentage. Rathore acknowledged in writing in Section 7(a) of the Rathore Agreement that the consideration provided was adequate and that the restrictive covenants were reasonable and necessary to protect CRH's legitimate business interests.
The remaining seven individual defendants each executed employment agreements containing materially similar restrictive covenant provisions at or around the commencement of their respective employment with CRH, with certain defendants executing amended or supplemental agreements upon promotion or role changes.
The restrictive covenants applicable to all eight individual defendants share a common framework:
(i) Non-Competition. Each defendant agreed not to, for a period of twelve months (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson) or eighteen months (Rathore, Linden, and Kaczmarek) following the termination of employment, directly or indirectly engage in, render services to, or accept employment with any business entity that competes with CRH in the retail sale of merchandise, within the United States.
(ii) Non-Solicitation of Employees. Each defendant agreed not to, for a period of eighteen months (Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson) or twenty-four months (Rathore, Linden, and Kaczmarek) following the termination of employment, directly or indirectly solicit, recruit, hire, or induce any employee of CRH to leave CRH's employment.
(iii) Non-Solicitation of Vendors. Each defendant agreed not to, for a period commensurate with the non-competition period, directly or indirectly solicit or divert any vendor, supplier, or business partner of CRH for the purpose of providing goods or services to a competing enterprise.
(iv) Confidentiality. Each defendant agreed that, in perpetuity following the termination of employment, he or she would not disclose, use, or exploit any Confidential Information or trade secrets of CRH, as those terms are defined in the respective employment agreements.
All eight employment agreements contain choice-of-law provisions selecting the laws of the State of Delaware as the governing law and consent-to-jurisdiction provisions designating the Court of Chancery of the State of Delaware as a proper forum for the adjudication of disputes arising under the agreements.
C. Confidential Information and Trade Secrets Accessible to the Defendants
The members of the Rathore Group collectively had direct, unrestricted access to CRH's most sensitive proprietary information and trade secrets. As set forth in the Declaration of Theresa Yun-Park, CRH maintains rigorous information security protocols, including role-based access controls, multi-factor authentication for sensitive systems, confidentiality designations on proprietary documents, and mandatory confidentiality training for all employees with access to sensitive materials. Despite these protections, the nature of the Rathore Group's senior roles required that they be granted broad access to the information most critical to CRH's competitive position.
The categories of confidential information and trade secrets to which the Rathore Group had access include, but are not limited to, the following:
Project Ridgeline. In October 2024, CRH completed a confidential five-year strategic category expansion plan known internally as "Project Ridgeline." This initiative, spearheaded by Rathore and her team, represents the culmination of over eighteen months of strategic analysis, vendor negotiations, market research, and financial modeling. Project Ridgeline encompasses CRH's proprietary plans for expansion into new product categories, vendor-specific commercial terms (including rebate structures, exclusivity arrangements, and volume commitments), private-label margin targets for planned product launches through 2029, and ecommerce assortment algorithms designed to optimize CRH's online merchandise mix. The Project Ridgeline materials were classified as "Strictly Confidential — Executive Distribution Only" and access was limited to members of CRH's Executive Leadership Team and the merchandising leadership group. Each member of the Rathore Group had direct access to all or substantially all of the Project Ridgeline materials.
Proprietary Vendor Negotiation Playbooks. CRH maintains detailed playbooks governing its negotiation strategy with each of its top vendor partners. These playbooks contain CRH's target pricing, volume thresholds for rebate eligibility, walk-away positions, historical negotiation outcomes, and strategic priorities for each vendor relationship. The playbooks were developed over years through iterative vendor interactions and are not disclosed to any party outside of CRH.
Seasonal Buying Algorithms. CRH has developed proprietary algorithms that drive its seasonal buying decisions, optimizing inventory levels, markdown timing, and assortment composition based on historical sales data, regional demographic information, and predictive analytics. These algorithms represent a significant competitive advantage in CRH's seasonal merchandise categories and were maintained within CRH's analytics platform with restricted access.
Private-Label Sourcing Strategies and Cost Models. CRH's private-label product lines are among its highest-margin offerings and represent a key pillar of CRH's long-term growth strategy. CRH maintains proprietary sourcing strategies, including supplier identification and qualification methodologies, cost models, landed cost analyses, and target margin structures that are closely guarded trade secrets.
Customer Segmentation Data. CRH has invested millions of dollars in developing granular customer segmentation models that inform its merchandising, marketing, and promotional strategies. These models incorporate demographic, psychographic, transactional, and behavioral data derived from CRH's loyalty program (with over 22 million active members) and ecommerce platform, and represent a proprietary analytical asset that is central to CRH's competitive positioning.
As set forth in the Declaration of Theresa Yun-Park, each of these categories of information satisfies the definition of a "trade secret" under the Delaware Uniform Trade Secrets Act, 6 Del. C. § 2001(4): each derives independent economic value 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 CRH has taken reasonable measures to maintain the secrecy of each.
D. The Coordinated Departure
The facts establishing the premeditated, coordinated nature of the Rathore Group's departure are set forth in detail in the Declarations of Roland Ashby, Dr. Rajiv Anand, and Sandra Fielding, and are summarized in the chronology below.
January 6, 2025. Verdana CEO Warren Dietrich and Greystone Capital Partners Managing Partner Elliot Westbrook met with Priya Rathore at a private dinner at a restaurant in New York City. The occurrence of this meeting was discovered through the investigation conducted by Aurelian Investigations Group Inc. ("Aurelian"), a private investigation firm retained by CRH, and is attested to in the Declaration of Sandra Fielding, Aurelian's lead investigator on this engagement. Upon information and belief, this dinner was the initiating event of Verdana's coordinated recruitment of the entire Rathore Group.
January 13–24, 2025. Between January 13 and January 24, 2025, a series of encrypted messaging exchanges took place between Rathore and the other seven members of the Rathore Group. These communications, the existence and timing of which were confirmed through forensic analysis of CRH-issued mobile devices by Pinnacle Forensics LLC ("Pinnacle"), discussed the timing of the group's collective departure from CRH, the status of offer negotiations with Verdana, and logistical coordination regarding the simultaneous submission of resignations. The Declaration of Dr. Rajiv Anand, Pinnacle's engagement lead, details the forensic methodology employed and the findings of the analysis.
January 27, 2025. Rathore signed her offer letter with Verdana.
January 28 – February 4, 2025. The remaining seven members of the Rathore Group — Linden, Kaczmarek, Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson — each signed offer letters with Verdana over a one-week period. The aggregate sign-on bonuses offered to all eight members of the Rathore Group totaled $6,200,000, comprising $1,500,000 for Rathore and $4,700,000 in the aggregate for the other seven defendants.
January 10 – February 4, 2025. During the precise window in which the Rathore Group was negotiating their departures and signing offer letters with Verdana, forensic evidence gathered by Pinnacle Forensics establishes that 14,327 files — approximately 2.8 gigabytes of data — were downloaded from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts associated with individual members of the Rathore Group. The exfiltrated files include, among other materials, Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data. The Declaration of Dr. Rajiv Anand sets forth the forensic evidence in detail, including the identification of specific user accounts, download timestamps, file names and types, and cloud storage destinations.
February 7, 2025 (Friday). At precisely 4:47 PM Pacific Standard Time, all eight members of the Rathore Group submitted simultaneous resignation letters via email to their respective supervisors and to CRH's Human Resources department. Each resignation letter was effective immediately. The simultaneous timing — eight resignation emails sent within the same minute — is, by itself, compelling evidence of coordination.
February 10, 2025 (Monday). On the next business day following the resignations, CRH Chief People Officer Roland Ashby alerted General Counsel Theresa Yun-Park to the mass departure and initiated an internal investigation.
February 12, 2025. CRH's in-house legal team confirmed the existence and specific terms of each departing employee's restrictive covenant provisions. Simultaneously, CRH's Information Technology department completed an initial audit that identified the data exfiltration described above and escalated the matter to Pinnacle Forensics for a comprehensive forensic investigation.
February 14, 2025. Verdana publicly announced the hiring of the Rathore Group in a press release titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth." The press release identified each member of the Rathore Group by name and title and described their planned roles at Verdana in merchandising leadership.
February 18, 2025. CRH retained the law firm of Calderwood & Harkness LLP (matter number 1038-00006) to represent CRH in connection with the enforcement of the restrictive covenants, the recovery of confidential information, and related claims.
February 25, 2025. Calderwood & Harkness, on behalf of CRH, sent formal cease-and-desist letters to all eight members of the Rathore Group, to Verdana Commerce Group, Inc., and to Greystone Capital Partners, LP. The letters demanded immediate compliance with the restrictive covenants, the return or certified destruction of all CRH confidential information and trade secrets, and the cessation of any use of CRH proprietary materials by Verdana.
February 27, 2025. The law firm of Whitfield, Nygaard & Doyle LLP, through lead partner Catherine Nygaard and associate Travis Beaumont, entered an appearance on behalf of the eight individual defendants. The law firm of Blackhall & Soren LLP, through lead partner Gavin Blackhall and senior associate Meredith Lau, entered an appearance on behalf of Verdana Commerce Group, Inc.
As of the date of this filing, defendants have not complied with the demands set forth in the cease-and-desist letters. No CRH confidential information or trade secrets have been returned. No certifications of destruction have been provided. And, upon information and belief, the individual defendants remain employed by or are in the process of commencing employment with Verdana in merchandising-related roles that directly violate their restrictive covenants.
III. LEGAL STANDARD
The Court of Chancery possesses broad equitable authority to issue temporary restraining orders and preliminary injunctions to preserve the status quo and prevent irreparable harm pending a final determination on the merits. Court of Chancery Rule 65 governs the procedures for the issuance of such relief.
To obtain a preliminary injunction, a movant must demonstrate: (1) a reasonable probability of success on the merits of the underlying claims; (2) an imminent threat of irreparable injury if the injunction is not granted; (3) that the balance of hardships tips in favor of the movant; and (4) that the issuance of the injunction would serve the public interest. See Revlon, Inc. v. MacAndrews & Forbaci Holdings, Inc., 506 A.2d 173, 179 (Del. 1986); SI Mgmt. L.P. v. Wininger, 707 A.2d 37, 40 (Del. 1998). The same standard applies to the issuance of a temporary restraining order, which serves to maintain the status quo for a brief period pending a full hearing on the preliminary injunction motion.
Delaware law recognizes and enforces restrictive covenants in employment agreements where such covenants are reasonable in scope, duration, and geographic limitation and are designed to protect legitimate business interests of the employer. See Kan-Di-Ki, LLC v. Susi, 2015 WL 4503210, at 6 (Del. Ch. July 22, 2015). Legitimate protectable interests that justify the enforcement of restrictive covenants include, among others, the protection of trade secrets and confidential information, the preservation of customer and vendor relationships, the protection of goodwill, and the maintenance of workforce stability. See FP UC Holdings, LLC v. Hamilton, 2020 WL 1492783, at 4 (Del. Ch. Mar. 27, 2020). Delaware courts have consistently held that an employer is entitled to injunctive relief to enforce reasonable restrictive covenants where a former employee has accepted employment with a direct competitor in violation of a non-competition clause, particularly where the employee had access to trade secrets and confidential information. See EDIX Media Grp., Inc. v. Mahani, 2006 WL 3742595, at *6 (Del. Ch. Dec. 12, 2006).
With respect to the issuance of a TRO, Court of Chancery Rule 65(b) provides that a TRO may be granted without notice to the adverse party upon a showing that immediate and irreparable injury will result before the adverse party can be heard. Here, CRH is not seeking ex parte relief; rather, the Verified Complaint and this Motion have been served on all defendants through their counsel of record. CRH nonetheless seeks the immediate entry of a TRO because of the imminent risk that CRH's trade secrets are being disseminated to and integrated into Verdana's operations with each passing day, causing irreparable harm that cannot be remedied after the fact.
IV. ARGUMENT
A. CRH Has a Reasonable Probability of Success on the Merits
CRH has established a strong likelihood of prevailing on each of the five counts asserted in the Verified Complaint. The legal and factual bases for each claim are addressed in turn.
1. Breach of Restrictive Covenants (Count I — All Eight Individual Defendants). Each of the eight individual defendants signed a binding employment agreement with CRH containing a clear, unambiguous non-competition clause. These provisions are governed by Delaware law and are enforceable under well-established Delaware precedent.
The non-competition periods applicable to each defendant are as follows: Rathore, Linden, and Kaczmarek are each subject to an eighteen-month non-competition period; Osei, Halvorsen, Fernandez-Gill, Tsao, and Johansson are each subject to a twelve-month non-competition period. In each case, the non-competition period began to run on February 7, 2025, the date of the simultaneous resignations. As of the date of this filing, less than four weeks have elapsed since the commencement of the restrictive periods.
The geographic scope of each non-competition clause is the United States — a scope that is eminently reasonable in light of CRH's nationwide operational footprint, which includes 387 retail locations across 34 states and a direct-to-consumer ecommerce platform that serves customers in all 50 states.
Each defendant has accepted employment with Verdana, a company that directly competes with CRH in at least 28 overlapping product categories. Verdana operates in the same market segments (home goods, seasonal décor, apparel, hardlines), through the same distribution channels (brick-and-mortar and ecommerce), and targets the same customer demographics as CRH. The acceptance of employment at Verdana in merchandising roles is precisely the type of competitive activity that the non-competition clauses were designed to prevent.
The restrictive covenants are supported by adequate consideration. For each defendant, the consideration included the initial employment itself, access to CRH's confidential information and trade secrets during the course of employment, promotions, salary increases, annual bonuses, RSU grants, and other benefits. For Rathore specifically, the Amended and Restated Employment Agreement executed on March 15, 2021 was supported by independent consideration in the form of a $150,000 one-time promotion bonus and an enhanced RSU grant with a face value of $725,000. Delaware law recognizes that continued employment and access to confidential information constitute adequate consideration for a restrictive covenant entered into during the course of an employment relationship. See Hough Assocs., Inc. v. Hill, 2007 WL 148751, at *5 (Del. Ch. Jan. 17, 2007).
The covenants are reasonable in all respects. The durations of twelve to eighteen months are well within the range that Delaware courts have consistently upheld. The geographic scope of the United States is coextensive with CRH's actual business operations and competitive landscape. The scope of restricted activity — merchandising roles at a direct competitor — is narrowly tailored to the functional areas in which the defendants had access to CRH's most sensitive information and is not a blanket prohibition on all employment.
The covenants protect legitimate business interests that Delaware law recognizes as valid bases for post-employment restrictions. CRH's trade secrets — including, most critically, the Project Ridgeline strategic plan — constitute proprietary assets of enormous value. CRH's vendor relationships, developed over years of negotiation and interaction, represent goodwill that would be irreparably harmed if the defendants were permitted to deploy CRH's proprietary vendor intelligence on behalf of a competitor. CRH's seasonal buying algorithms, private-label sourcing strategies, and customer segmentation data provide competitive advantages that took years to develop and that cannot be effectively protected by means less restrictive than enforcing the covenants the defendants agreed to.
In sum, CRH is likely to succeed on its claim that each individual defendant is in breach of his or her non-competition covenant by accepting employment with Verdana in a merchandising capacity.
2. Breach of Confidentiality Obligations (Count II — All Eight Individual Defendants). Each employment agreement contains a perpetual confidentiality clause obligating the defendant to maintain the secrecy of all Confidential Information (as defined in the respective agreements) following the termination of employment. The confidentiality obligations are not limited in time and extend to all information obtained during the course of employment that is not publicly available.
The forensic analysis conducted by Pinnacle Forensics LLC has confirmed that the individual defendants downloaded 14,327 files — approximately 2.8 gigabytes — of confidential CRH materials from CRH's Aldermere Systems and Pinnacle Health IT environments to personal cloud storage accounts between January 10 and February 4, 2025. As detailed in the Declaration of Dr. Rajiv Anand, the exfiltrated files include Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data — each of which constitutes Confidential Information under the applicable employment agreements.
The timing of the exfiltration — which occurred during the precise window in which the defendants were secretly negotiating their departures and signing offer letters with Verdana — is powerful evidence that the files were downloaded for the purpose of taking them to Verdana. There is no legitimate business reason for senior employees to download thousands of proprietary files to personal cloud accounts in the weeks immediately preceding a coordinated resignation.
Despite CRH's demands in the February 25 cease-and-desist letters, no defendant has returned any CRH confidential information or certified the destruction of any copies. CRH is therefore likely to succeed on its claim that each individual defendant has breached and continues to breach his or her contractual confidentiality obligations.
3. Misappropriation of Trade Secrets Under DUTSA (Count III — All Eight Individual Defendants and Verdana). The Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009 ("DUTSA"), provides for injunctive relief to prevent actual or threatened misappropriation of trade secrets. 6 Del. C. § 2002(a). Under DUTSA, a "trade secret" is defined as information that (i) derives independent economic value 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 (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 6 Del. C. § 2001(4).
The Project Ridgeline materials, proprietary vendor negotiation playbooks, seasonal buying algorithms, private-label sourcing strategies and cost models, and customer segmentation data at issue in this case satisfy both prongs of this definition.
First, each category of information derives independent economic value from not being generally known or readily ascertainable. Project Ridgeline, for example, represents CRH's five-year strategic roadmap for category expansion, encompassing proprietary analysis, vendor-specific commercial terms, margin targets, and algorithmic models that together constitute CRH's competitive blueprint. If disclosed to a competitor, this information would enable the competitor to anticipate CRH's strategic moves, undercut CRH's vendor negotiations, replicate CRH's private-label strategies, and capture market share that CRH expected to gain through first-mover advantage. CRH's merchandising division generated $2.3 billion in GMV in FY2024; the trade secrets at issue are central to CRH's ability to maintain and grow this revenue base.
Second, CRH has taken reasonable measures to maintain the secrecy of each category of information. As detailed in the Declaration of Theresa Yun-Park, CRH's security measures include: role-based access controls limiting access to sensitive systems to employees with a demonstrated need-to-know; multi-factor authentication for access to Aldermere Systems and Pinnacle Health IT environments; confidentiality designations on proprietary documents (including "Strictly Confidential — Executive Distribution Only" for Project Ridgeline materials); mandatory confidentiality training for all employees with access to sensitive data; and the execution of written confidentiality agreements by all employees with access to trade secrets.
The defendants acquired these trade secrets through the course of their employment with CRH — a relationship of trust and confidence. Rather than return this information upon their departure, they exfiltrated 14,327 files to personal cloud accounts and resigned simultaneously to join a direct competitor. This conduct constitutes misappropriation under DUTSA, both through the acquisition of trade secrets by improper means (the exfiltration) and through the actual or threatened disclosure or use of trade secrets acquired through a relationship of confidence. See 6 Del. C. § 2001(2).
Verdana is also liable for misappropriation under DUTSA. Upon information and belief, Verdana knew or had reason to know that the Rathore Group possessed CRH's trade secrets at the time of their hiring. Verdana is a direct competitor operating in the same industry, and it is implausible that Verdana offered $6.2 million in aggregate sign-on bonuses to recruit an entire merchandising team without the expectation that the team would bring its institutional knowledge — including CRH's trade secrets — to bear on Verdana's operations. Verdana's publicly announced "transformational growth initiative" targeting expansion into CRH's strongest categories further demonstrates that Verdana intended to exploit the Rathore Group's access to CRH's proprietary strategies.
4. Tortious Interference with Contractual Relations (Count IV — Verdana). To establish a claim for tortious interference with contractual relations under Delaware law, a plaintiff must demonstrate: (1) the existence of a valid contract; (2) the defendant's knowledge of the contract; (3) intentional interference by the defendant that induced or caused a breach of the contract; (4) the absence of justification; and (5) resulting damages. See Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983, 992 (Del. Ch. 1987).
Each element is satisfied here. First, as discussed above, each individual defendant executed a valid employment agreement containing enforceable restrictive covenants. Second, Verdana had actual or constructive knowledge of the restrictive covenants. As a direct competitor of CRH operating in the same industry, Verdana knew or should have known that senior merchandising executives at CRH would be subject to post-employment restrictive covenants. Indeed, it is standard industry practice for executives at the level of the Rathore Group to be bound by non-competition and confidentiality agreements, and Verdana's own employment agreements contain similar provisions. Moreover, upon information and belief, Verdana made no effort to inquire about or ensure compliance with the Rathore Group's existing contractual obligations to CRH before extending offers of employment.
Third, Verdana intentionally induced the Rathore Group to breach their covenants. The evidence of intentional interference is overwhelming. Verdana's CEO, Warren Dietrich, and Greystone's Managing Partner, Elliot Westbrook, personally initiated the recruitment by meeting with Rathore at a private dinner in New York City on January 6, 2025. Verdana offered the Rathore Group an aggregate of $6.2 million in sign-on bonuses — extraordinary financial inducements that were plainly designed to overcome any reluctance the defendants might have had about breaching their contractual obligations. Verdana facilitated the coordinated, simultaneous departure of the entire group, and publicly announced the hiring in a press release on February 14, 2025, demonstrating its deliberate intent to deploy the Rathore Group in direct competition with CRH.
Fourth, Verdana's interference lacks justification. There is no privilege or business justification that excuses the deliberate inducement of employees to breach valid restrictive covenants and misappropriate their former employer's trade secrets.
Fifth, CRH has suffered and will continue to suffer damages as a result of Verdana's tortious interference, including the loss of the benefit of the restrictive covenants, the loss of the competitive advantage conferred by its trade secrets, and the disruption to its merchandising operations.
5. Civil Conspiracy (Count V — All Defendants). CRH has also asserted a claim for civil conspiracy against all defendants. Under Delaware law, civil conspiracy requires an agreement between two or more persons to commit an unlawful act or to accomplish a lawful objective by unlawful means, coupled with the commission of an overt act in furtherance of the agreement that causes damage to the plaintiff. See Nicolet, Inc. v. Nutt, 525 A.2d 146, 149 (Del. 1987).
The evidence of a conspiracy is compelling. The simultaneous resignation of all eight members of the Rathore Group at precisely 4:47 PM PST on February 7, 2025 — eight resignation emails transmitted within the same minute — is, standing alone, powerful circumstantial evidence of a coordinated plan. This evidence is buttressed by the encrypted messaging exchanges among the Rathore Group between January 13 and January 24, 2025, which discussed the timing of the departures, the status of offer negotiations with Verdana, and the logistics of the simultaneous resignations. The exfiltration of 14,327 files to personal cloud accounts during the same period constitutes overt acts in furtherance of the conspiracy. And Verdana and Greystone facilitated the conspiracy through the recruitment dinner on January 6, 2025, the extension of accelerated offer letters, and the provision of extraordinary financial inducements — $6.2 million in aggregate sign-on bonuses — designed to ensure the participation of all eight members of the group.
The concerted action was directed at breaching the restrictive covenants, misappropriating CRH's trade secrets, and causing economic harm to CRH by stripping it of its entire senior merchandising leadership team and transferring that team — and CRH's proprietary strategies — to a direct competitor.
B. CRH Will Suffer Imminent, Irreparable Harm Absent Injunctive Relief
The harm that CRH will suffer absent injunctive relief is both imminent and irreparable. Delaware courts have recognized that irreparable harm is presumed in cases involving the misappropriation of trade secrets, because once confidential information has been disclosed to a competitor, its secrecy — and the competitive advantage it confers — is permanently destroyed. See Beard Research, Inc. v. Kates, 8 A.3d 573, 601–02 (Del. Ch. 2010), aff'd sub nom. ASDI, Inc. v. Beard Research, Inc., 11 A.3d 749 (Del. 2010).
The harm to CRH cannot be adequately compensated by monetary damages for several independent reasons.
First, once CRH's trade secrets are disclosed to Verdana, their value is permanently destroyed. There is no mechanism by which CRH can "unring the bell" or restore the competitive advantage it enjoyed before the disclosure. Project Ridgeline, for example, represents years of strategic investment involving dozens of senior employees, hundreds of vendor negotiations, and millions of dollars in analytical resources. If Verdana gains access to this roadmap — or has already gained access through the exfiltrated files — CRH's planned first-mover advantage in multiple high-value product categories will be eliminated before CRH can execute on its own strategy.
Second, CRH's vendor relationships, which are the product of years of careful cultivation and negotiation, would be irreparably undermined if Verdana leverages CRH's proprietary vendor negotiation playbooks. CRH's vendors will lose confidence in CRH's ability to safeguard confidential commercial terms if those terms are deployed by a competitor. The resulting damage to CRH's vendor relationships would be incalculable and could take years to repair, if repair is even possible.
Third, CRH's seasonal buying algorithms and private-label sourcing strategies provide a competitive edge that, once compromised, cannot be reconstructed through the expenditure of money alone. These assets represent the accumulated intellectual capital of CRH's merchandising organization, refined through years of iterative testing and optimization. A monetary award cannot restore the exclusivity of information that has been shared with a competitor.
Fourth, the loss of CRH's entire senior merchandising leadership team to a single competitor has already disrupted CRH's operations. Martin Cho, Vice President of Merchandising, has been pressed into service as interim acting head of the division, but he lacks the institutional knowledge and strategic context that the Rathore Group possessed. Allowing the individual defendants to commence competing work at Verdana would compound this operational disruption by enabling Verdana to use CRH's own strategies against it while CRH is simultaneously rebuilding its merchandising leadership.
Fifth, each day that passes without injunctive relief increases the risk that CRH's confidential information is being integrated into Verdana's operations, reviewed by Verdana's leadership, and disseminated to Verdana's vendors and business partners. The longer the delay, the more deeply embedded the confidential information becomes in Verdana's business, and the more difficult it will be to remedy the harm even if CRH ultimately prevails on the merits.
CRH's merchandising division represents $2.3 billion in gross merchandise value. Even a fractional competitive loss attributable to the misuse of CRH's trade secrets would constitute damages that are incalculable and unrecoverable. The irreparable nature of this harm is precisely the type of injury that equity was designed to prevent.
C. The Balance of Hardships Favors CRH
The balance of hardships tips decisively in CRH's favor.
On the defendants' side, the individual defendants voluntarily agreed to the restrictive covenants as a condition of their employment and, in certain cases, as a condition of their promotions. They received substantial consideration in exchange for these agreements — salaries ranging from $192,000 to $485,000, annual bonuses, RSU grants, promotion bonuses, and access to CRH's most sensitive proprietary information. Enforcement of the covenants that the defendants freely negotiated and executed does not impose an undue hardship; it merely holds them to the bargained-for obligations they agreed to assume. These are sophisticated professionals, each of whom is represented by experienced counsel. There is no suggestion that any defendant was coerced or lacked the capacity to understand the restrictive covenants at the time of execution.
The injunction CRH seeks would not bar the individual defendants from all employment. It would restrain them only from working in merchandising-related roles at Verdana — a single company — during the remaining period of their respective non-competition covenants. The defendants are free to seek employment in non-competitive capacities or with non-competing enterprises. This is a narrowly tailored restraint, not a broad prohibition on earning a livelihood.
As for Verdana, it will not suffer undue hardship from a temporary restraint. Verdana is a $1.9 billion revenue company backed by Greystone Capital Fund VII, a private equity fund with $8.5 billion in committed capital. Verdana has the financial resources to absorb any delay in onboarding the Rathore Group into merchandising roles. Verdana operated successfully before the Rathore Group's arrival and can continue to do so during the pendency of this proceeding.
By contrast, CRH faces catastrophic competitive harm if Verdana is permitted to deploy the Rathore Group — armed with CRH's most sensitive trade secrets — in direct competition during the applicable restrictive covenant periods. The asymmetry of hardships is stark: a temporary delay in the Rathore Group's commencement of merchandising work at Verdana is a minor inconvenience compared to the permanent destruction of CRH's trade secrets and competitive position.
D. The Public Interest Supports Injunctive Relief
The public interest weighs strongly in favor of granting the relief CRH seeks.
The public interest favors the enforcement of lawful contracts freely entered into by sophisticated parties. Delaware has a long-standing and well-articulated public policy supporting the enforceability of reasonable restrictive covenants in employment agreements. This policy serves important economic objectives: it encourages employers to invest in their workforce, to share confidential information with key employees who need it to perform their jobs, and to develop proprietary strategies and trade secrets that drive innovation and growth. Employers who cannot rely on the enforceability of restrictive covenants will be reluctant to make these investments, to the detriment of employees and the economy alike.
Permitting employees to breach their restrictive covenants with impunity — and allowing a competitor to orchestrate the wholesale defection of an entire functional team — would send a dangerous signal that contractual obligations can be circumvented through coordinated action and financial inducements. The resulting erosion of confidence in the enforceability of employment contracts would undermine the framework of trust and investment that supports business relationships in Delaware and nationwide.
Moreover, the integrity of the Court of Chancery's equitable remedies is served by providing swift relief where, as here, the facts demonstrate a deliberate, coordinated scheme to circumvent binding contractual obligations and misappropriate a competitor's trade secrets. The Court's willingness to act decisively in such circumstances is a cornerstone of the equitable jurisdiction that makes Delaware a preferred forum for the resolution of business disputes.
V. THE PROPOSED INJUNCTIVE RELIEF
A. Temporary Restraining Order
CRH respectfully requests that this Court enter a temporary restraining order, effective immediately upon entry and continuing for fourteen (14) days (or until the conclusion of the preliminary injunction hearing, whichever is earlier), providing as follows:
1. All eight individual defendants — Priya Rathore, Derek Linden, Sonia Kaczmarek, Amara Osei, Brent Halvorsen, Lucia Fernandez-Gill, Nathan Tsao, and Kira Johansson — are hereby restrained and enjoined from commencing, continuing, or engaging in any employment, consulting, advisory, or other service-providing role in merchandising, merchandising strategy, category management, vendor relations, private-label development, ecommerce merchandising, seasonal planning, or any substantially similar function at Verdana Commerce Group, Inc. or any of its subsidiaries, affiliates, successors, or assigns.
2. All eight individual defendants are ordered to immediately return to CRH and/or certify under oath the destruction of all CRH confidential information, trade secrets, and proprietary materials in their possession, custody, or control, whether in physical or electronic form, including but not limited to all files downloaded from CRH systems between January 10 and February 4, 2025, and to provide CRH with a sworn certification of compliance within five (5) business days of the entry of this Order.
3. Verdana Commerce Group, Inc. is hereby restrained and enjoined from employing, engaging, onboarding, or otherwise utilizing the services of any individual defendant in any merchandising-related capacity, as described in paragraph 1 above.
4. Verdana Commerce Group, Inc. is ordered to immediately sequester and preserve — and to refrain from accessing, using, reviewing, copying, or disseminating — any CRH confidential information or trade secrets that may be in its possession, custody, or control, including any materials received from or through any individual defendant, and to provide CRH's counsel with a sworn certification of compliance within five (5) business days of the entry of this Order.
B. Preliminary Injunction
CRH further respectfully requests that, following a hearing on notice to all defendants, this Court enter a preliminary injunction continuing the foregoing restraints through the pendency of this action or through the expiration of each individual defendant's applicable restrictive covenant period (twelve or eighteen months from February 7, 2025, as the case may be), whichever is earlier. The preliminary injunction should contain the same substantive provisions as the TRO set forth in Section V.A above, with such modifications as the Court deems appropriate in light of the evidence presented at the hearing.
C. Injunction Bond
CRH acknowledges that, pursuant to Court of Chancery Rule 65(c), the Court may condition the issuance of a TRO or preliminary injunction upon the posting of an injunction bond in an amount sufficient to protect the defendants against any damages they may sustain if it is later determined that the injunction was wrongfully issued. CRH is prepared to post an appropriate injunction bond as determined by the Court.
CRH proposes a bond in the amount of $2,500,000, to be issued through Broadview Surety Corp., 175 Water Street, Suite 2400, New York, New York 10038. CRH submits that this amount is sufficient to protect the defendants' interests in light of the narrowly tailored scope of the injunction sought, the strong likelihood of success on the merits, and the limited potential harm to defendants from a temporary restraint that merely holds them to their contractual obligations.
VI. SUPPORTING DECLARATIONS AND EXHIBITS
This Motion is supported by the following declarations and exhibits, each of which is filed concurrently herewith:
1. Declaration of Theresa Yun-Park, Senior Vice President and General Counsel of Cascade Retail Holdings Inc., attesting to: the existence and terms of the employment agreements executed by each individual defendant; the specific restrictive covenant provisions applicable to each defendant (with copies of each employment agreement attached as exhibits); the departing employees' access to Project Ridgeline and other categories of confidential information and trade secrets; the reasonable measures taken by CRH to maintain the secrecy of its proprietary information; the competitive overlap between CRH and Verdana in at least 28 product categories; and the nature and magnitude of the competitive harm posed by the Rathore Group's departure to Verdana.
2. Declaration of Roland Ashby, Chief People Officer of Cascade Retail Holdings Inc., attesting to: the circumstances of the coordinated resignations submitted by all eight individual defendants on February 7, 2025 at 4:47 PM PST; the resulting disruption to CRH's merchandising operations; the appointment of Martin Cho, Vice President of Merchandising, as interim acting head of the merchandising division; and the operational challenges CRH has faced and continues to face as a result of the simultaneous departure of its entire senior merchandising leadership team.
3. Declaration of Dr. Rajiv Anand, Engagement Lead, Pinnacle Forensics LLC, attesting to: the forensic methodology employed in the analysis of CRH's Aldermere Systems and Pinnacle Health IT environments; the identification and documentation of the exfiltration of 14,327 files (approximately 2.8 gigabytes) from CRH systems to personal cloud storage accounts between January 10 and February 4, 2025; the identification of specific user accounts, download timestamps, file names, file types, and cloud storage destinations; and the categorization of the exfiltrated files, including Project Ridgeline presentations, vendor negotiation term sheets, private-label cost models, and customer segmentation data.
4. Verified Complaint (filed concurrently), setting forth five counts: Count I — Br

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

I. INTRODUCTION

II. STATEMENT OF FACTS

III. LEGAL STANDARD

IV. ARGUMENT

V. THE PROPOSED INJUNCTIVE RELIEF

VI. SUPPORTING DECLARATIONS AND EXHIBITS

Record

Parties

Dates

Amounts