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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation. It is intended solely for the use of the attorneys and agents of Cascade Retail Holdings Inc. and Calderwood & Harkness LLP in connection with the above-referenced matter. Any dissemination, distribution, or copying of this memorandum without the express written consent of Calderwood & Harkness LLP is strictly prohibited.

MEMORANDUM

FROM: Devon Archer, Associate, Calderwood & Harkness LLP

TO: James Underwood, Lead Associate, Calderwood & Harkness LLP

DATE: February 26, 2025

RE: Analysis of Verdana Commerce Group, Inc. Press Release Dated February 14, 2025 — Evidentiary Implications for Tortious Interference and Civil Conspiracy Claims

CLIENT: Cascade Retail Holdings Inc.

MATTER NO.: 1038-00006

OFFICE: 1301 K Street NW, Suite 1200, Washington, DC 20005

I. Purpose and Summary

This memorandum analyzes the press release issued by Verdana Commerce Group, Inc. ("Verdana" or "VCG") on February 14, 2025, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth" (the "Press Release"), and evaluates the evidentiary value of that document and its specific language for purposes of our client Cascade Retail Holdings Inc.'s ("CRH" or "Cascade") prospective claims against Verdana and, potentially, Greystone Capital Partners, LP ("Greystone").

The Press Release publicly announced the hiring of Priya Rathore and seven other former CRH merchandising employees (collectively, the "Rathore Group"). As set forth in detail below, the Press Release was issued exactly one week after all eight members of the Rathore Group simultaneously submitted their resignations from CRH on February 7, 2025. It represents a contemporaneous, self-authored statement by Verdana that bears directly on the elements of CRH's prospective claims of tortious interference with contractual relations and civil conspiracy. The Press Release also has secondary relevance to CRH's anticipated claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA").

Summary Conclusion. The Press Release contains several admissions and statements that are highly favorable to CRH's position across multiple causes of action. In particular, the Press Release:

• Acknowledges the coordinated nature of the hire by announcing all eight individuals as a unified "team" acquisition in a single release, rather than as a series of independent personnel announcements;

• Demonstrates awareness of the team's CRH background by referencing their collective experience at "a leading omnichannel retailer," a thinly veiled description of Cascade;

• Articulates Verdana's intent to compete directly in CRH's core product categories by tying the hires to Verdana's previously announced $4 billion revenue growth initiative targeting private-label home goods and seasonal décor — categories in which CRH holds substantial market share;

• Contains statements that directly implicate the very categories and competencies protected by the restrictive covenant provisions in the departing employees' employment agreements, including private-label development, seasonal category management, vendor relationship optimization, and data-driven category expansion; and

• Implicates Greystone Capital Partners, LP as an active participant in the recruitment and growth strategy, rather than as a passive equity holder, potentially supporting a civil conspiracy claim.

The balance of this memorandum provides the factual and legal analysis supporting these conclusions and sets forth recommendations for the litigation team's use of the Press Release in connection with CRH's anticipated filings.

II. Background

A. The Coordinated Departure

On February 7, 2025, at 4:47 PM PST, all eight members of the Rathore Group submitted simultaneous resignation letters via email to CRH, effective immediately. The simultaneity of the resignations — each sent within seconds of the others, based on email server timestamps reviewed by CRH's IT department — was unprecedented in CRH's corporate history and immediately raised concerns about coordinated poaching by a competitor.

The group was led by Priya Rathore, CRH's former Senior Vice President of Merchandising, who had been employed at CRH since June 3, 2019. Ms. Rathore was responsible for overseeing the full breadth of CRH's merchandising operations across all product categories and retail channels, including e-commerce. She signed an Amended and Restated Employment Agreement on March 15, 2021 (the "Rathore Agreement"), which contained comprehensive restrictive covenant provisions. Ms. Rathore reported directly to CRH's Chief Commercial Officer and had regular access to the company's most sensitive strategic documents, including the proprietary Project Ridgeline five-year growth plan.

The seven other departing members of the Rathore Group, all of whom reported directly or indirectly to Ms. Rathore at CRH, are as follows:

1. Derek Linden — Vice President, Hardlines Merchandising

2. Sonia Kaczmarek — Vice President, Softlines Merchandising

3. Amara Osei — Director, Private Label Strategy

4. Brent Halvorsen — Director, Seasonal Planning & Analytics

5. Lucia Fernandez-Gill — Director, Vendor Relations, Domestic

6. Nathan Tsao — Senior Manager, eCommerce Merchandising

7. Kira Johansson — Senior Manager, Category Analytics

All eight members of the Rathore Group had signed employment agreements with CRH containing restrictive covenant provisions, including non-competition covenants, non-solicitation covenants (covering both employees and, in certain cases, vendors), and confidentiality obligations. Each of these employment agreements is governed by Delaware law pursuant to express choice-of-law provisions contained therein.

The collective departure of the Rathore Group represents the loss of substantially all of CRH's senior merchandising leadership. Ms. Rathore's team was responsible for the strategic direction, execution, and vendor management for product categories generating approximately $2.3 billion in gross merchandise value in FY2024, representing approximately one-third of CRH's total annual revenue.

B. Restrictive Covenant Terms

The restrictive covenant provisions applicable to each member of the Rathore Group are summarized below. Calderwood & Harkness has reviewed the original executed employment agreements for all eight individuals, copies of which were provided by CRH General Counsel Theresa Yun-Park on February 19, 2025.

Priya Rathore (SVP, Merchandising):

• Non-competition covenant: 18 months post-termination, applicable throughout the United States

• Non-solicitation covenant: 24 months post-termination, covering both CRH employees and CRH vendors with whom Ms. Rathore had material contact during the final two years of employment

• Confidentiality covenant: perpetual, covering all proprietary information, trade secrets, competitive data, strategic plans, and other confidential information obtained during employment

Derek Linden (VP, Hardlines Merchandising):

• Non-competition covenant: 18 months post-termination, applicable throughout the United States

Sonia Kaczmarek (VP, Softlines Merchandising):

• Non-competition covenant: 18 months post-termination, applicable throughout the United States

Amara Osei (Director, Private Label Strategy), Brent Halvorsen (Director, Seasonal Planning & Analytics), Lucia Fernandez-Gill (Director, Vendor Relations, Domestic), Nathan Tsao (Senior Manager, eCommerce Merchandising), and Kira Johansson (Senior Manager, Category Analytics):

• Non-competition covenants: 12 months post-termination, applicable throughout the United States

All eight members of the Rathore Group are subject to non-solicitation periods ranging from 18 to 24 months post-termination. All eight employment agreements contain confidentiality provisions covering proprietary information, trade secrets, competitive data, vendor terms and pricing, strategic plans, customer data, and other categories of confidential business information developed or obtained during employment at CRH.

The enforceability of these restrictive covenants under Delaware law, including the reasonableness of the geographic scope, temporal duration, and scope of restricted activity, will be addressed in a separate memorandum currently being prepared by this office. For purposes of the present analysis, we proceed on the assumption that the covenants are enforceable, which we believe is well-supported under applicable Delaware precedent.

C. CRH's Engagement of Counsel and Current Posture

CRH retained Calderwood & Harkness LLP on February 18, 2025, following an initial internal assessment conducted by CRH's in-house legal department. CRH General Counsel Theresa Yun-Park confirmed the existence and enforceability scope of all eight restrictive covenants on February 12, 2025, five days after the coordinated resignations and two days after CRH Chief People Officer Roland Ashby first alerted the legal department to the departures.

Simultaneously with the General Counsel's review of the employment agreements, CRH's IT security team identified preliminary evidence of data exfiltration from CRH systems by one or more members of the Rathore Group in the weeks preceding the resignations. This preliminary finding prompted the engagement of the following third-party consultants:

• Pinnacle Forensics LLC was engaged on February 20, 2025, to conduct forensic imaging of all CRH-issued devices previously assigned to members of the Rathore Group and to analyze the scope, timing, and content of any data exfiltration. Pinnacle's preliminary findings, which are being addressed in a separate memorandum, indicate that approximately 14,327 files comprising approximately 2.8 GB of data were downloaded from CRH systems between January 10 and February 4, 2025, across multiple members of the Rathore Group.

• Aurelian Investigations Group Inc. was engaged on February 21, 2025, to investigate the circumstances surrounding the recruitment and coordinated departure of the Rathore Group. Aurelian's investigation is ongoing, but has already produced several significant findings, including evidence of a dinner meeting on January 6, 2025, among Verdana CEO Warren Dietrich, Greystone Managing Partner Elliot Westbrook, and Priya Rathore at a restaurant in New York City, as well as evidence of encrypted messaging exchanges among members of the Rathore Group between approximately January 13 and January 24, 2025, coordinating departure timing and logistics.

CRH's current litigation posture is as follows: Calderwood & Harkness is preparing a Verified Complaint and an emergency motion for temporary restraining order and preliminary injunction for filing in the Delaware Court of Chancery. Cease-and-desist letters to Verdana and Greystone were finalized and delivered on February 25, 2025. The anticipated filing date for the Verified Complaint and TRO motion is on or before March 7, 2025, subject to the completion of certain investigative steps.

D. The Verdana Press Release

The Press Release at issue was issued on February 14, 2025, exactly one week after the simultaneous resignations on February 7, 2025. It bears the title: "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth."

The Press Release was published on Verdana's corporate website (www.verdanacommerce.com/newsroom) and simultaneously distributed via Calderon Data Systems, a major commercial press release distribution service. It was also picked up by several industry trade publications, including Ridgeline Partners LLC, Strathmore Partners LLC, and Modern Retail, all of which published coverage of the hires on or about February 14–15, 2025.

It is significant that the Press Release was issued before CRH retained Calderwood & Harkness LLP (February 18, 2025) and before CRH sent its cease-and-desist letters to Verdana and Greystone (February 25, 2025). The Press Release therefore represents Verdana's unguarded public characterization of the hires, issued at a time when Verdana may not have been on notice of CRH's intent to pursue legal action and before Verdana's counsel had any reason to shape the company's public messaging in anticipation of litigation.

A full copy of the Press Release is attached hereto as Attachment A.

III. Detailed Analysis of Press Release Content

This section provides a close textual analysis of the key provisions and statements contained in the Press Release, organized by subject matter, along with an assessment of the evidentiary significance of each for CRH's prospective claims.

A. Acknowledgment of Coordinated Team Hire

Perhaps the most significant feature of the Press Release from an evidentiary standpoint is its framing of the eight hires as a unified, coordinated team acquisition. The Press Release does not announce each hire separately or characterize the additions as the result of independent recruiting processes. Instead, it announces all eight hires simultaneously in a single release, explicitly and repeatedly referring to the group as a "team."

The Press Release identifies Priya Rathore by name and announces her appointment to the role of "President, Merchandising & Strategy" — a position described in the release as "newly created," indicating that Verdana established the role specifically to accommodate Ms. Rathore. This framing is significant because it demonstrates that the hiring was not opportunistic or reactive, but rather the result of deliberate organizational planning by Verdana to create a senior leadership position tailored to Ms. Rathore's profile and responsibilities.

In addition to Ms. Rathore, the Press Release names all seven other members of the Rathore Group and identifies their respective titles at Verdana. The release characterizes the collective hire as "a strategic talent acquisition" and describes the group as bringing "complementary expertise across merchandising, private-label strategy, vendor relations, analytics, and eCommerce" — language that mirrors the organizational structure and functional divisions of CRH's own merchandising department under Ms. Rathore's leadership.

Evidentiary Significance. The Press Release's characterization of the hire as a coordinated "team" acquisition supports the critical inference that Verdana engaged in a deliberate, pre-planned effort to recruit an entire functioning business unit from a direct competitor. This inference is a hallmark of tortious interference claims in the employment context. Courts have recognized that the simultaneous hiring of a complete team from a competitor is qualitatively different from the independent recruitment of individual employees, because team hiring evidences a purpose to acquire not merely the skills of individual employees, but the collective knowledge, working relationships, and institutional capabilities that the team developed at its prior employer. The Press Release, authored by Verdana itself, confirms that this is precisely what occurred.

B. Statements by Verdana CEO Warren Dietrich

The Press Release contains a direct quotation attributed to Warren Dietrich, Verdana's Chief Executive Officer. Mr. Dietrich's quoted statements are among the most significant portions of the document from an evidentiary perspective.

First, Mr. Dietrich is quoted praising the "deep expertise" and "proven track record" that the Rathore Group brings from "a leading omnichannel retailer." While the Press Release does not name Cascade by name, the reference to "a leading omnichannel retailer" is a thinly veiled description of CRH. In the context of the retail industry, and given that all eight members of the Rathore Group are publicly known to have been CRH employees (as confirmed by their Westmark Health IT profiles, industry reporting, and CRH's own public filings), there can be no genuine dispute that this language refers to CRH. The reference confirms Verdana's awareness that it was hiring employees from CRH — a direct competitor — and that it valued the team precisely because of its CRH experience.

Second, and more critically, Mr. Dietrich's quoted statements reference the team's specific capabilities in "private-label development, seasonal category management, and vendor relationship optimization." These three competency areas are of particular significance because they map precisely to the subject matter of CRH's confidential Project Ridgeline strategic plan, which was developed by Ms. Rathore and her team during 2023–2024 and which constitutes some of CRH's most closely guarded proprietary information. Project Ridgeline sets forth CRH's five-year strategy for expanding its private-label product portfolio, optimizing seasonal category management using proprietary algorithms, and restructuring its domestic vendor relationships to achieve margin improvements. Mr. Dietrich's specific enumeration of these three areas in the Press Release is therefore not merely coincidental — it directly implicates the categories and competencies in which the departing employees had access to CRH's most sensitive confidential information and trade secrets.

Third, Mr. Dietrich's statements in the Press Release tie the Rathore Group hires to Verdana's previously announced "transformational growth initiative" targeting $4 billion in annual revenue by 2028. That growth initiative, which Verdana announced publicly in November 2024, specifically cited expansion into CRH's strongest product categories — private-label home goods and seasonal décor — as primary growth vectors. By linking the Rathore Group hires to this initiative, Mr. Dietrich effectively admits that Verdana hired the CRH team as a means of executing a strategy designed to compete directly in CRH's most profitable business segments.

Evidentiary Significance. Mr. Dietrich's statements in the Press Release establish Verdana's motive with unusual clarity. They demonstrate that Verdana's purpose in hiring the Rathore Group was to acquire CRH's competitive advantages in specific product categories by recruiting the very team that developed and executed CRH's strategies in those categories. This is direct evidence of knowledge and intent — two elements essential to a tortious interference claim. Moreover, because Mr. Dietrich made these statements in his capacity as Verdana's CEO, they constitute authorized statements by a party-opponent and carry significant weight as admissions.

C. Statements Attributed to Priya Rathore

The Press Release also contains a direct quotation attributed to Priya Rathore in her new capacity as Verdana's President, Merchandising & Strategy. While Ms. Rathore's statements are somewhat more guarded than Mr. Dietrich's, they nonetheless contain language of evidentiary value.

Ms. Rathore is quoted expressing enthusiasm about "building on" her prior experience and "bringing transformative merchandising strategies to a new platform." The phrase "building on" her prior experience is particularly noteworthy. While this language could be characterized as a generic career aspiration — the type of forward-looking statement commonly included in corporate press releases — it arguably signals an intent to leverage the knowledge, strategies, and methodologies that Ms. Rathore developed during her nearly six-year tenure at CRH. In context, the phrase suggests continuity rather than a fresh start: Ms. Rathore intends to use what she learned at CRH as a foundation for her work at Verdana.

Additionally, Ms. Rathore's quoted statements reference "data-driven category expansion" and "vendor ecosystem optimization." This language is notable for two reasons. First, it mirrors the terminology and scope of Project Ridgeline, which Ms. Rathore personally led at CRH and which centered on data-driven expansion of CRH's category portfolio and optimization of CRH's vendor ecosystem. Second, the reference to "data-driven" methodologies is significant in light of the data exfiltration evidence being developed by Pinnacle Forensics, which indicates that among the files downloaded from CRH systems in the weeks preceding the resignations were CRH's proprietary seasonal buying algorithms, customer segmentation data, and vendor negotiation playbooks — all of which would be essential inputs to a "data-driven category expansion" strategy.

Evidentiary Significance. While Ms. Rathore's statements are more circumspect than Mr. Dietrich's, the specificity of the referenced competencies maps directly to CRH's confidential information and trade secrets. The statements support the inference that Verdana hired the Rathore Group precisely for their access to CRH's proprietary methodologies and strategic plans, and that Ms. Rathore intends to deploy that knowledge at Verdana. At the very least, the statements undermine any future argument by Verdana or Ms. Rathore that the hire was motivated solely by general industry expertise rather than by the team's specific knowledge of CRH's proprietary strategies.

D. Reference to Greystone Capital Partners, LP

The Press Release contains a reference to Greystone Capital Partners, LP as Verdana's majority equity holder and notes Greystone's "strategic support" for the growth initiative to which the Rathore Group hires are linked. Greystone Capital Fund VII, LP acquired a majority equity stake in Verdana in Q3 2023 in a transaction valuing the company at approximately $2.4 billion enterprise value. Greystone Capital Fund VII, LP has approximately $8.5 billion in committed capital and is one of the more prominent middle-market and upper-middle-market private equity sponsors active in the retail and consumer sectors.

The Press Release references or quotes Elliot Westbrook, Managing Partner of Greystone, endorsing the talent acquisition as "consistent with Greystone's investment thesis" for Verdana. By including Mr. Westbrook's endorsement, the Press Release creates a direct link between the private equity sponsor and the decision to recruit the Rathore Group. Notably, this is not a passing reference — Greystone's involvement is positioned as a core element of the narrative, suggesting that the PE sponsor played an active role in shaping and approving the recruitment strategy.

Evidentiary Significance. The reference to Greystone in the Press Release implicates the PE sponsor in the coordinated recruitment scheme and potentially supports a civil conspiracy claim against Greystone. Under Delaware law, liability for civil conspiracy requires evidence of a confederation or combination of two or more persons to accomplish an unlawful purpose. The Press Release's characterization of Greystone's "strategic support" for the growth initiative — an initiative that Verdana's own CEO has linked directly to the hiring of the Rathore Group — suggests that Greystone was not merely a passive equity holder but an active participant in the decision to recruit CRH's merchandising leadership.

This inference is substantially corroborated by evidence being developed independently of the Press Release. Specifically, Aurelian Investigations has identified a dinner meeting on January 6, 2025, at a private dining room in a restaurant in Midtown Manhattan, among Warren Dietrich (Verdana CEO), Elliot Westbrook (Greystone Managing Partner), and Priya Rathore. This meeting occurred approximately one month before the coordinated resignations and two months before the Press Release. The fact that Greystone's Managing Partner participated personally in what appears to have been an early-stage recruitment meeting, and that the Press Release subsequently acknowledged Greystone's strategic involvement, creates a strong evidentiary foundation for the argument that Greystone was a co-conspirator in the tortious interference scheme.

Additionally, preliminary information from Aurelian Investigations and publicly available filings suggests that the aggregate sign-on bonuses offered to the Rathore Group totaled approximately $6.2 million — $1.5 million to Ms. Rathore and approximately $4.7 million in the aggregate to the other seven members — funded through Verdana's financial resources backed by Greystone's equity commitment. The magnitude of these bonuses, which far exceed market norms for comparable positions, further suggests that Greystone provided the financial wherewithal to induce the Rathore Group's departure from CRH.

E. Competitive Overlap Language

The Press Release describes Verdana's growth targets in categories including "home goods, apparel, and seasonal décor." These are core CRH product categories. Based on CRH's internal category taxonomy and Verdana's publicly reported product segmentation, there are at least 28 overlapping product categories in which CRH and Verdana compete directly.

CRH's merchandising division, which the Rathore Group led and managed, accounted for approximately $2.3 billion in gross merchandise value in FY2024. CRH's total FY2024 revenue was approximately $6.82 billion, meaning the merchandising categories overseen by the Rathore Group represent approximately 34% of CRH's total revenue. These are not marginal business lines — they are among CRH's highest-margin and most strategically important segments.

By contrast, Verdana's FY2024 estimated revenue was approximately $1.9 billion. The $4 billion revenue target by 2028 articulated in the Press Release and in Verdana's earlier November 2024 growth initiative announcement would require Verdana to more than double its revenue over a four-year period. Based on publicly available information regarding Verdana's growth in its existing product categories, it appears that the bulk of the incremental revenue required to reach the $4 billion target must come from expansion into new categories — categories in which CRH is currently dominant and in which the Rathore Group has deep, CRH-specific expertise.

Evidentiary Significance. The competitive overlap language in the Press Release demonstrates that Verdana knowingly hired the Rathore Group to compete directly in CRH's strongest market segments. This makes the harm to CRH not only foreseeable but intended. The Press Release effectively admits that the purpose of the hires was to accelerate Verdana's entry into and growth within categories where CRH has built its competitive position over many years — categories that the Rathore Group helped develop and manage at CRH. This evidence bears directly on both the intent and damages elements of CRH's tortious interference claim.

F. Timing of the Press Release

The timing of the Press Release warrants separate analysis. The Press Release was issued on February 14, 2025, exactly seven days after the coordinated resignations on February 7, 2025. The speed with which Verdana was able to issue a polished, detailed press release announcing the hires is itself evidentiary.

Corporate press releases of the nature and complexity of the Verdana Press Release — announcing multiple senior hires, including extensive quotations from the CEO and incoming executives, and linking the hires to a broader strategic initiative — typically require significant lead time to prepare. The drafting process alone involves input from communications, legal, and executive stakeholders. Legal review is particularly time-consuming when, as here, the press release discusses the recruitment of employees from a direct competitor — review for competitive sensitivity, defamation risk, and regulatory compliance is standard practice. Executive approval by the CEO (and, in this case, apparently by Greystone's managing partner) adds additional time to the process.

The fact that Verdana was able to issue this Press Release within seven calendar days — including a weekend — of the resignations creates a strong inference that the Press Release was substantially drafted before the resignations occurred, or at the very least that Verdana had been planning the announcement for some time in advance of the public departure date. This inference is consistent with a pre-arranged coordination between Verdana and the Rathore Group regarding the timing of the departures and the public announcement of the hires.

It is further significant that CRH Chief People Officer Roland Ashby did not alert CRH General Counsel Theresa Yun-Park to the mass departure until February 10, 2025 — three days after the resignations. CRH's legal team had therefore not even begun its assessment of the restrictive covenant implications when Verdana published the Press Release on February 14. Verdana thus went public with the hires at a time when CRH was still in the initial stages of understanding the scope of the departures, and well before CRH had retained outside counsel or taken any legal action. The timing suggests that Verdana sought to establish the hires as a fait accompli in the public domain before CRH could respond.

Evidentiary Significance. The rapid issuance of the Press Release is circumstantial evidence of pre-arranged coordination between Verdana and the Rathore Group. It suggests that the resignations and the public announcement were part of a single, pre-planned sequence of events, further supporting CRH's claims of tortious interference and civil conspiracy.

IV. Evidentiary Implications for Specific Claims

This section maps the Press Release evidence to the specific elements of each cause of action that CRH is preparing to assert.

A. Tortious Interference with Contractual Relations (Against Verdana)

Under Delaware law, a claim for tortious interference with contractual relations requires proof of the following elements: (1) the existence of a valid contract; (2) the defendant's knowledge of the contract; (3) the defendant's intentional interference causing a breach of the contract; and (4) resulting damages to the plaintiff. See Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. Ch. 1987); Restatement (Second) of Torts § 766 (1979). The Press Release bears on each of these elements, as follows:

Element 1 — Existence of a Contract. The employment agreements containing restrictive covenant provisions are the relevant contracts for purposes of this claim. As described above in Section II.B, all eight members of the Rathore Group signed employment agreements with CRH that contain non-competition, non-solicitation, and confidentiality covenants. Each agreement is governed by Delaware law. The existence and enforceability of these contracts will be established through the agreements themselves and the testimony of CRH General Counsel Theresa Yun-Park. While the Press Release does not directly reference the employment agreements, it is relevant to this element insofar as it confirms the employment relationship between the Rathore Group and CRH.

Element 2 — Knowledge. The Press Release is highly probative on the element of knowledge. By acknowledging the team's CRH background and characterizing them as coming from "a leading omnichannel retailer," the Press Release creates a strong inference that Verdana was aware that the employees had contractual obligations to CRH. Under Delaware law, knowledge for purposes of tortious interference can be either actual or constructive. See WaveDivision Holdings, LLC v. Millennium Digital Media Sys., LLC, 2010 WL 3706624 (Del. Ch. Sept. 17, 2010). Even if Verdana were to argue that it lacked actual knowledge of the specific restrictive covenant terms, Verdana's sophistication as a PE-backed competitor with its own in-house legal counsel — Helen Tsoi serves as Verdana's General Counsel — makes a constructive knowledge argument particularly compelling. Any reasonable sophisticated competitor in the retail industry would understand that senior merchandising executives departing a major publicly traded retailer are likely subject to restrictive covenants. Moreover, industry custom and practice in the retail sector is that senior executives and management-level employees are routinely subject to non-competition and non-solicitation agreements. Verdana's in-house counsel, who would have been involved in the legal review of the Press Release and the hiring process, would have been expected to conduct a review of the departing employees' contractual obligations as a matter of standard due diligence.

Element 3 — Intentional Interference. The Press Release establishes Verdana's affirmative intent to hire the entire Rathore Group as a team for the express purpose of competing in CRH's core product categories. The specificity of Mr. Dietrich's references to "private-label development, seasonal category management, and vendor relationship optimization" directly implicates the subject matter areas covered by the restrictive covenants. The coordinated nature of the hire — announced as a single team acquisition rather than as a series of independent hires — goes well beyond the passive acceptance of unsolicited applications. The Press Release portrays the recruitment as a proactive strategic initiative undertaken by Verdana and endorsed by its PE sponsor, not as a response to inbound employee interest. This framing supports the inference of intentional interference — that Verdana actively induced the employees to breach their contractual obligations by leaving CRH and joining a direct competitor.

Element 4 — Damages. The Press Release's own articulation of Verdana's growth targets provides a useful framework for quantifying the competitive harm to CRH. The $4 billion revenue target by 2028, pursued by competing directly in CRH's strongest categories using the knowledge and expertise of CRH's former merchandising leadership, provides an external benchmark for the scope of competitive diversion that CRH can expect to suffer. Dr. Franklin Oberg of Veltrano Consulting Group LLC, whom we expect to engage on or about March 3, 2025, as CRH's damages expert, can use Verdana's own publicly stated growth targets as a foundation for damages modeling. The Press Release thus not only provides evidence of liability but also supplies an input for the quantification of CRH's losses.

Overall Assessment. The Press Release is a powerful evidentiary exhibit for the tortious interference claim. It constitutes a party admission by Verdana that should be admissible without hearsay limitations, as discussed further in Section V below. It is the rare case in which a defendant's own public statements so directly address the elements of the plaintiff's claim. We recommend that the Press Release be featured prominently in both the Verified Complaint and the TRO/PI motion.

B. Civil Conspiracy (Against Verdana, Greystone, and the Individual Defendants)

Under Delaware law, a claim for civil conspiracy requires proof of: (1) a confederation or combination of two or more persons; (2) an unlawful act done in furtherance of the conspiracy; and (3) actual damages resulting from the unlawful act. See Nicolet, Inc. v. Nutt, 525 A.2d 146 (Del. 1987). Civil conspiracy is not an independent cause of action but rather a means of imposing joint and several liability for the underlying tortious conduct upon all members of the conspiracy.

Element 1 — Confederation. The Press Release's description of the hire as a single, coordinated team acquisition is powerful evidence of a confederation or combination. When read in conjunction with the simultaneous resignation timing — all eight members of the Rathore Group submitting resignation emails at 4:47 PM PST on February 7, 2025 — the Press Release supports the inference of a pre-arranged agreement among multiple parties: Ms. Rathore, the other seven departing employees, Verdana (acting through Mr. Dietrich and other executives), and Greystone (acting through Mr. Westbrook).

The press release's specific reference to Greystone's strategic involvement is essential to establishing the confederation element as to Greystone. Without this reference, CRH would need to rely solely on extrinsic evidence (such as the January 6 dinner meeting) to connect Greystone to the scheme. The Press Release, by its own terms, confirms that Greystone was an active strategic partner in the growth initiative that motivated the hires.

Element 2 — Unlawful Act. The underlying tortious interference with contractual relations and inducement of breach of the restrictive covenant obligations constitute the predicate unlawful acts done in furtherance of the conspiracy. As established in Section IV.A above, the Press Release provides evidence that Verdana intentionally hired the Rathore Group with knowledge (actual or constructive) of their contractual obligations to CRH and for the purpose of competing directly in CRH's core product categories.

Element 3 — Actual Damages. The damages flowing from the conspiracy are co-extensive with the damages from the tortious interference claim — the competitive harm to CRH resulting from the loss of its senior merchandising team and the deployment of that team's CRH-specific knowledge at a direct competitor. As noted above, the Press Release's own articulation of Verdana's growth targets provides a framework for quantifying these damages.

Greystone's Role. The Press Release's reference to Greystone's "strategic support," combined with external evidence including the aggregate $6.2 million in sign-on bonuses funded through Verdana's Greystone-backed financial resources ($1,500,000 to Rathore and $4,700,000 in the aggregate to the other seven members of the group), supports the argument that Greystone was a co-conspirator that provided the financial means and strategic impetus for the tortious conduct. Greystone's managing partner, Elliot Westbrook, personally participated in the January 6, 2025 recruitment dinner with Rathore and Dietrich. The Press Release's acknowledgment of Greystone's role corroborates the inference that Greystone was not merely a passive investor but an active driver of the recruitment strategy.

Rathore's Role. The Press Release positions Ms. Rathore in the newly created title of President, Merchandising & Strategy at Verdana, suggesting that she was the linchpin organizer of the coordinated departure. This is consistent with the evidence being developed by Aurelian Investigations, which has identified encrypted messaging exchanges among members of the Rathore Group between approximately January 13 and January 24, 2025, in which departure timing and logistics appear to have been coordinated. The creation of a senior executive role specifically for Ms. Rathore, as announced in the Press Release, confirms that Verdana and Greystone regarded Ms. Rathore as the central figure in the talent acquisition — the person who could deliver an entire functioning merchandising team.

C. Misappropriation of Trade Secrets (DUTSA)

CRH's anticipated claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009, is primarily supported by the data exfiltration evidence being developed by Pinnacle Forensics. The Press Release does not directly evidence data exfiltration and is therefore of secondary relevance to this claim. However, it provides useful circumstantial evidence in several respects.

The Press Release's specific references to competency areas that map directly to CRH's trade secrets — including private-label development, seasonal category management, vendor relationship optimization, and data-driven category expansion — create circumstantial evidence that Verdana hired the Rathore Group with the intent to exploit CRH's proprietary information. These competency areas correspond to the following categories of CRH trade secrets:

• Project Ridgeline: CRH's comprehensive five-year strategic plan for category expansion and margin improvement, developed by the Rathore Group during 2023–2024;

• Vendor Negotiation Playbooks: Proprietary frameworks and templates for negotiating terms with CRH's domestic and international vendor base;

• Seasonal Buying Algorithms: Proprietary quantitative models used to optimize CRH's seasonal inventory purchasing and allocation decisions;

• Private-Label Sourcing Strategies: Confidential strategies and supplier relationships for CRH's private-label product lines; and

• Five-Year Category Expansion Roadmap: A detailed internal plan identifying target categories for growth and the investment required to capture market share.

The Press Release's language about "data-driven category expansion" is particularly notable in light of the data exfiltration evidence. Among the files that Pinnacle Forensics has identified as having been downloaded from CRH systems between January 10 and February 4, 2025, are files containing CRH's proprietary seasonal buying algorithms and customer segmentation data. These are precisely the types of "data-driven" tools and resources that Ms. Rathore's Press Release quotes reference and that Verdana's growth strategy apparently contemplates deploying.

While the Press Release alone is insufficient to establish misappropriation, it provides important contextual evidence linking Verdana's stated strategic intent to the specific categories of trade secrets at issue, and it supports the inference that the data exfiltration was not incidental but was undertaken in furtherance of a coordinated plan to transfer CRH's proprietary methodologies to Verdana.

V. Evidentiary Considerations and Admissibility

A. Admissibility. The Press Release should be admissible in the anticipated litigation proceedings without hearsay limitations, for the following reasons:

First, the Press Release is a statement by a party-opponent. Verdana is a named defendant in CRH's anticipated action, and the Press Release is a public statement issued by Verdana in the ordinary course of its business communications. Under Delaware Rule of Evidence 801(d)(2)(A), a statement is not hearsay if it is offered against an opposing party and was made by the party in an individual capacity or, under Rule 801(d)(2)(B), is one the party manifested that it adopted or believed to be true. The Press Release is self-evidently a statement that Verdana adopted and authorized for public distribution. It is therefore admissible as a non-hearsay party admission.

Second, the statements attributed to Warren Dietrich, Verdana's CEO, are authorized statements by an agent of Verdana. Under Rule 801(d)(2)(C) and (D), a statement is not hearsay if it was made by a person authorized by the party to make a statement on the subject, or by the party's agent or employee on a matter within the scope of that relationship and while it existed. As CEO, Mr. Dietrich is authorized to speak on Verdana's behalf on matters of corporate strategy and personnel, and his statements in the Press Release fall squarely within this authorization.

Third, the statements attributed to Priya Rathore may be admissible against Verdana as statements by an agent. Although Ms. Rathore was newly hired at the time the Press Release was issued, she is identified as Verdana's "President, Merchandising & Strategy," and her quoted statements were included in and authorized by Verdana's official corporate communication. To the extent Ms. Rathore is named as an individual defendant, her statements are also admissible as party admissions in their own right.

Fourth, any reference to Greystone's involvement in the Press Release may also be admissible against Greystone as a co-conspirator statement under Rule 801(d)(2)(E), provided the foundation for the conspiracy can be established through independent evidence. Under this rule, a statement made by a co-conspirator during the course of and in furtherance of the conspiracy is admissible against all members of the conspiracy. Given the evidence of the January 6, 2025 dinner meeting involving Greystone's managing partner and the financial backing that Greystone provided for the sign-on bonuses, there is a strong basis for establishing the foundational requirements for co-conspirator admissibility.

B. Preservation. The Press Release should be preserved in its original form, including all associated metadata, web archive snapshots, and any wire service distribution records. Given the likelihood that Verdana may alter or remove the Press Release from its corporate website after receiving CRH's cease-and-desist letters (delivered February 25, 2025) or upon learning of CRH's intent to file suit, preservation should be treated as a matter of urgency.

Specifically, we recommend the following preservation steps:

1. Capture a certified web archive of the Press Release as it currently appears on Verdana's corporate website, using both (a) the Internet Archive's Wayback Machine (to establish a third-party timestamp) and (b) a forensic web capture by Pinnacle Forensics LLC (to ensure chain-of-custody documentation suitable for evidentiary use);

2. Obtain a copy of the Calderon Data Systems distribution record for the Press Release, which will establish the precise date, time, and distribution scope of the release;

3. Preserve any third-party media coverage that republished or quoted from the Press Release, including the articles published by Ridgeline Partners LLC, Strathmore Partners LLC, and Modern Retail; and

4. Catalogue the Press Release as a key exhibit in the anticipated TRO/PI motion filing and assign it an exhibit number in the master exhibit list being maintained for this matter.

We have communicated this preservation request to Pinnacle Forensics and are awaiting confirmation that the web capture has been completed.

C. Potential Counterarguments

We anticipate that Verdana, Greystone, and the individual defendants may raise several counterarguments regarding the evidentiary significance of the Press Release:

Counterargument 1: The Press Release is generic corporate communications. Defendants may argue that the Press Release contains standard corporate boilerplate and does not demonstrate actual knowledge of the specific restrictive covenant provisions contained in the departing employees' CRH employment agreements. They may contend that acknowledging a new hire's prior employer is routine and does not constitute an admission of knowledge of that employer's contractual rights.

Response. While it is true that corporate press releases often reference new hires' professional backgrounds, the Press Release here goes well beyond generic biographical information. The level of specificity in Mr. Dietrich's references to competency areas that map precisely to CRH's proprietary strategies, the characterization of the hire as a coordinated "team" acquisition, and the explicit linkage of the hires to Verdana's growth initiative targeting CRH's core categories collectively distinguish this Press Release from routine corporate communications. Moreover, under Delaware law, constructive knowledge is sufficient — and a sophisticated PE-backed competitor cannot credibly claim ignorance of the likelihood that eight senior employees departing a major retailer simultaneously were subject to restrictive covenants.

Counterargument 2: Hiring a "team" is not per se evidence of tortious interference. Defendants may argue that companies routinely hire multiple employees from a single competitor and that the use of the word "team" in a press release does not establish tortious intent.

Response. This argument mischaracterizes CRH's claim. CRH does not contend that hiring multiple employees from a competitor is per se tortious. Rather, CRH contends that the coordinated recruitment of an intact business unit — eight members of a single department, led by their senior vice president, all departing simultaneously and all subject to restrictive covenants — constitutes deliberate interference with CRH's contractual rights when undertaken with knowledge of those rights and with the intent to acquire the team's CRH-specific knowledge and competitive capabilities. The totality of the circumstances, including the evidence being developed by Aurelian Investigations (the January 6, 2025 dinner meeting, the encrypted pre-departure communications) and Pinnacle Forensics (the data exfiltration), will provide substantial additional corroboration that this was not an innocent hiring process but a coordinated scheme to strip CRH of its merchandising leadership and proprietary knowledge.

Counterargument 3: The Press Release was issued by Verdana's communications department and does not reflect the company's legal analysis or awareness of contractual issues. Defendants may attempt to characterize the Press Release as the work of the marketing or public relations function rather than as a statement reflecting the company's legal knowledge.

Response. This argument is irrelevant for purposes of admissibility, as statements by a party-opponent are admissible regardless of which department within the organization authored them. For purposes of substantive weight, the argument fails because (a) press releases of this nature necessarily undergo legal review before publication, and (b) the statements attributed to the CEO represent the highest level of corporate authority. Even if the Press Release were drafted by a junior communications staffer, its publication with the CEO's authorized quotation makes it an official corporate statement for all purposes.

VI. Recommendations

Based on the foregoing analysis, I respectfully recommend the following actions:

1. Include the Press Release as a Key Exhibit. The Press Release should be designated as a primary exhibit and attached to both the Verified Complaint and the emergency TRO/PI motion being prepared for filing in the Delaware Court of Chancery. It should be cited prominently in the factual background section and in the argument sections addressing the likelihood of success on the merits of CRH's tortious interference and civil conspiracy claims.

2. Preserve the Press Release in Its Current Online Form. As described in Section V.B above, the Press Release should be forensically preserved through both third-party web archive services and a certified forensic capture by Pinnacle Forensics LLC. I recommend that Pinnacle Forensics be instructed to add this preservation task to their current scope of engagement immediately, given the risk that Verdana may alter or remove the Press Release from its website upon receiving the cease-and-desist letters or learning of CRH's litigation plans.

3. Cross-Reference with Aurelian Investigations' Findings. The Press Release should be cross-referenced with Aurelian Investigations Group Inc.'s findings regarding the January 6, 2025 dinner meeting involving Dietrich, Westbrook, and Rathore, as well as the pre-resignation encrypted communications among the Rathore Group (January 13–24, 2025). These independent data points corroborate the inferences drawn from the Press Release and will enable us to construct a comprehensive, multi-source timeline of the conspiracy from inception through execution and public announcement.

4. Use the Press Release Language in the Cease-and-Desist Letters. To the extent the cease-and-desist letters to Verdana and Greystone are being finalized for delivery, I recommend incorporating specific quotations from the Press Release to demonstrate CRH's awareness of the coordinated nature of the recruitment scheme and to put Verdana and Greystone on notice that their own public statements will be used against them.

5. Brief Bernard Crawford on These Findings. Senior Partner Bernard Crawford, who is overseeing the overall litigation strategy for this matter, should be briefed on the evidentiary significance of the Press Release for incorporation into the comprehensive strengths/weaknesses assessment being prepared. The Press Release materially strengthens CRH's position on the knowledge and intent elements of the tortious interference claim and provides an additional basis for connecting Greystone to the conspiracy.

6. Flag for Veltrano Consulting Group. Once Dr. Franklin Oberg of Veltrano Consulting Group LLC is formally engaged as CRH's damages expert (anticipated on or about March 3, 2025), his team should be provided with the Press Release as a foundational document for damages modeling. Verdana's own publicly articulated growth targets ($4 billion in revenue by 2028, pursued through expansion into CRH's core categories) may serve as a useful — and, from CRH's perspective, highly favorable — input for quantifying the competitive harm that CRH will suffer as a result of the tortious conduct.

VII. Conclusion

The February 14, 2025 Verdana Press Release is a significant evidentiary asset for CRH's claims. It constitutes a contemporaneous, self-authored party admission by Verdana that was issued before the commencement of litigation and before Verdana had any reason to temper its public messaging in anticipation of legal proceedings. The Press Release establishes, in Verdana's own words:

• The coordinated nature of the Rathore Group hire, characterized by Verdana itself as a "team" acquisition;

• Verdana's awareness that the employees came from CRH, a direct competitor, and that the team possessed deep expertise in specific competency areas;

• Verdana's intent to deploy the Rathore Group's CRH-developed expertise to compete directly in CRH's core product categories — private-label home goods, seasonal décor, vendor relations, and data-driven category management;

• Greystone Capital Partners' involvement in the strategic growth initiative that motivated the recruitment; and

• The pre-planned nature of the recruitment, as evidenced by the rapid issuance of a polished, detailed press release within seven days of the coordinated resignations.

These admissions bear directly on the elements of CRH's claims for tortious interference with contractual relations, civil conspiracy, and, in a supporting capacity, misappropriation of trade secrets. I recommend treating the Press Release as a cornerstone exhibit in CRH's upcoming litigation filings and ensuring that it is preserved, catalogued, and cross-referenced with the full body of evidence being assembled by the litigation team and our investigative and forensic consultants.

I am available to discuss this analysis at your convenience and to incorporate your feedback as we continue to develop the factual record and prepare the Verified Complaint and TRO/PI motion for filing.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Devon Archer Associate 1301 K Street NW, Suite 1200 Washington, DC 20005 Direct: (202) 555-4871

Email: d.archer@calderwoodharkness.com

VIII. Attachment

Attachment A: Full text of Verdana Commerce Group, Inc. press release dated February 14, 2025, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth" (printed copy and web archive link).

Printed copy and web archive link maintained in Matter No. 1038-00006 document management system. Forensic web capture pending confirmation from Pinnacle Forensics LLC.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation. It is intended solely for the use of the attorneys and agents of Cascade Retail Holdings Inc. and Calderwood & Harkness LLP in connection with the above-referenced matter. Any dissemination, distribution, or copying of this memorandum without the express written consent of Calderwood & Harkness LLP is strictly prohibited.
MEMORANDUM
FROM: Devon Archer, Associate, Calderwood & Harkness LLP
TO: James Underwood, Lead Associate, Calderwood & Harkness LLP
DATE: February 26, 2025
RE: Analysis of Verdana Commerce Group, Inc. Press Release Dated February 14, 2025 — Evidentiary Implications for Tortious Interference and Civil Conspiracy Claims
CLIENT: Cascade Retail Holdings Inc.
MATTER NO.: 1038-00006
OFFICE: 1301 K Street NW, Suite 1200, Washington, DC 20005
I. Purpose and Summary
This memorandum analyzes the press release issued by Verdana Commerce Group, Inc. ("Verdana" or "VCG") on February 14, 2025, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth" (the "Press Release"), and evaluates the evidentiary value of that document and its specific language for purposes of our client Cascade Retail Holdings Inc.'s ("CRH" or "Cascade") prospective claims against Verdana and, potentially, Greystone Capital Partners, LP ("Greystone").
The Press Release publicly announced the hiring of Priya Rathore and seven other former CRH merchandising employees (collectively, the "Rathore Group"). As set forth in detail below, the Press Release was issued exactly one week after all eight members of the Rathore Group simultaneously submitted their resignations from CRH on February 7, 2025. It represents a contemporaneous, self-authored statement by Verdana that bears directly on the elements of CRH's prospective claims of tortious interference with contractual relations and civil conspiracy. The Press Release also has secondary relevance to CRH's anticipated claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act ("DUTSA").
Summary Conclusion. The Press Release contains several admissions and statements that are highly favorable to CRH's position across multiple causes of action. In particular, the Press Release:
• Acknowledges the coordinated nature of the hire by announcing all eight individuals as a unified "team" acquisition in a single release, rather than as a series of independent personnel announcements;
• Demonstrates awareness of the team's CRH background by referencing their collective experience at "a leading omnichannel retailer," a thinly veiled description of Cascade;
• Articulates Verdana's intent to compete directly in CRH's core product categories by tying the hires to Verdana's previously announced $4 billion revenue growth initiative targeting private-label home goods and seasonal décor — categories in which CRH holds substantial market share;
• Contains statements that directly implicate the very categories and competencies protected by the restrictive covenant provisions in the departing employees' employment agreements, including private-label development, seasonal category management, vendor relationship optimization, and data-driven category expansion; and
• Implicates Greystone Capital Partners, LP as an active participant in the recruitment and growth strategy, rather than as a passive equity holder, potentially supporting a civil conspiracy claim.
The balance of this memorandum provides the factual and legal analysis supporting these conclusions and sets forth recommendations for the litigation team's use of the Press Release in connection with CRH's anticipated filings.
II. Background
A. The Coordinated Departure
On February 7, 2025, at 4:47 PM PST, all eight members of the Rathore Group submitted simultaneous resignation letters via email to CRH, effective immediately. The simultaneity of the resignations — each sent within seconds of the others, based on email server timestamps reviewed by CRH's IT department — was unprecedented in CRH's corporate history and immediately raised concerns about coordinated poaching by a competitor.
The group was led by Priya Rathore, CRH's former Senior Vice President of Merchandising, who had been employed at CRH since June 3, 2019. Ms. Rathore was responsible for overseeing the full breadth of CRH's merchandising operations across all product categories and retail channels, including e-commerce. She signed an Amended and Restated Employment Agreement on March 15, 2021 (the "Rathore Agreement"), which contained comprehensive restrictive covenant provisions. Ms. Rathore reported directly to CRH's Chief Commercial Officer and had regular access to the company's most sensitive strategic documents, including the proprietary Project Ridgeline five-year growth plan.
The seven other departing members of the Rathore Group, all of whom reported directly or indirectly to Ms. Rathore at CRH, are as follows:
1. Derek Linden — Vice President, Hardlines Merchandising
2. Sonia Kaczmarek — Vice President, Softlines Merchandising
3. Amara Osei — Director, Private Label Strategy
4. Brent Halvorsen — Director, Seasonal Planning & Analytics
5. Lucia Fernandez-Gill — Director, Vendor Relations, Domestic
6. Nathan Tsao — Senior Manager, eCommerce Merchandising
7. Kira Johansson — Senior Manager, Category Analytics
All eight members of the Rathore Group had signed employment agreements with CRH containing restrictive covenant provisions, including non-competition covenants, non-solicitation covenants (covering both employees and, in certain cases, vendors), and confidentiality obligations. Each of these employment agreements is governed by Delaware law pursuant to express choice-of-law provisions contained therein.
The collective departure of the Rathore Group represents the loss of substantially all of CRH's senior merchandising leadership. Ms. Rathore's team was responsible for the strategic direction, execution, and vendor management for product categories generating approximately $2.3 billion in gross merchandise value in FY2024, representing approximately one-third of CRH's total annual revenue.
B. Restrictive Covenant Terms
The restrictive covenant provisions applicable to each member of the Rathore Group are summarized below. Calderwood & Harkness has reviewed the original executed employment agreements for all eight individuals, copies of which were provided by CRH General Counsel Theresa Yun-Park on February 19, 2025.
Priya Rathore (SVP, Merchandising):
• Non-competition covenant: 18 months post-termination, applicable throughout the United States
• Non-solicitation covenant: 24 months post-termination, covering both CRH employees and CRH vendors with whom Ms. Rathore had material contact during the final two years of employment
• Confidentiality covenant: perpetual, covering all proprietary information, trade secrets, competitive data, strategic plans, and other confidential information obtained during employment
Derek Linden (VP, Hardlines Merchandising):
• Non-competition covenant: 18 months post-termination, applicable throughout the United States
Sonia Kaczmarek (VP, Softlines Merchandising):
• Non-competition covenant: 18 months post-termination, applicable throughout the United States
Amara Osei (Director, Private Label Strategy), Brent Halvorsen (Director, Seasonal Planning & Analytics), Lucia Fernandez-Gill (Director, Vendor Relations, Domestic), Nathan Tsao (Senior Manager, eCommerce Merchandising), and Kira Johansson (Senior Manager, Category Analytics):
• Non-competition covenants: 12 months post-termination, applicable throughout the United States
All eight members of the Rathore Group are subject to non-solicitation periods ranging from 18 to 24 months post-termination. All eight employment agreements contain confidentiality provisions covering proprietary information, trade secrets, competitive data, vendor terms and pricing, strategic plans, customer data, and other categories of confidential business information developed or obtained during employment at CRH.
The enforceability of these restrictive covenants under Delaware law, including the reasonableness of the geographic scope, temporal duration, and scope of restricted activity, will be addressed in a separate memorandum currently being prepared by this office. For purposes of the present analysis, we proceed on the assumption that the covenants are enforceable, which we believe is well-supported under applicable Delaware precedent.
C. CRH's Engagement of Counsel and Current Posture
CRH retained Calderwood & Harkness LLP on February 18, 2025, following an initial internal assessment conducted by CRH's in-house legal department. CRH General Counsel Theresa Yun-Park confirmed the existence and enforceability scope of all eight restrictive covenants on February 12, 2025, five days after the coordinated resignations and two days after CRH Chief People Officer Roland Ashby first alerted the legal department to the departures.
Simultaneously with the General Counsel's review of the employment agreements, CRH's IT security team identified preliminary evidence of data exfiltration from CRH systems by one or more members of the Rathore Group in the weeks preceding the resignations. This preliminary finding prompted the engagement of the following third-party consultants:
• Pinnacle Forensics LLC was engaged on February 20, 2025, to conduct forensic imaging of all CRH-issued devices previously assigned to members of the Rathore Group and to analyze the scope, timing, and content of any data exfiltration. Pinnacle's preliminary findings, which are being addressed in a separate memorandum, indicate that approximately 14,327 files comprising approximately 2.8 GB of data were downloaded from CRH systems between January 10 and February 4, 2025, across multiple members of the Rathore Group.
• Aurelian Investigations Group Inc. was engaged on February 21, 2025, to investigate the circumstances surrounding the recruitment and coordinated departure of the Rathore Group. Aurelian's investigation is ongoing, but has already produced several significant findings, including evidence of a dinner meeting on January 6, 2025, among Verdana CEO Warren Dietrich, Greystone Managing Partner Elliot Westbrook, and Priya Rathore at a restaurant in New York City, as well as evidence of encrypted messaging exchanges among members of the Rathore Group between approximately January 13 and January 24, 2025, coordinating departure timing and logistics.
CRH's current litigation posture is as follows: Calderwood & Harkness is preparing a Verified Complaint and an emergency motion for temporary restraining order and preliminary injunction for filing in the Delaware Court of Chancery. Cease-and-desist letters to Verdana and Greystone were finalized and delivered on February 25, 2025. The anticipated filing date for the Verified Complaint and TRO motion is on or before March 7, 2025, subject to the completion of certain investigative steps.
D. The Verdana Press Release
The Press Release at issue was issued on February 14, 2025, exactly one week after the simultaneous resignations on February 7, 2025. It bears the title: "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth."
The Press Release was published on Verdana's corporate website (www.verdanacommerce.com/newsroom) and simultaneously distributed via Calderon Data Systems, a major commercial press release distribution service. It was also picked up by several industry trade publications, including Ridgeline Partners LLC, Strathmore Partners LLC, and Modern Retail, all of which published coverage of the hires on or about February 14–15, 2025.
It is significant that the Press Release was issued before CRH retained Calderwood & Harkness LLP (February 18, 2025) and before CRH sent its cease-and-desist letters to Verdana and Greystone (February 25, 2025). The Press Release therefore represents Verdana's unguarded public characterization of the hires, issued at a time when Verdana may not have been on notice of CRH's intent to pursue legal action and before Verdana's counsel had any reason to shape the company's public messaging in anticipation of litigation.
A full copy of the Press Release is attached hereto as Attachment A.
III. Detailed Analysis of Press Release Content
This section provides a close textual analysis of the key provisions and statements contained in the Press Release, organized by subject matter, along with an assessment of the evidentiary significance of each for CRH's prospective claims.
A. Acknowledgment of Coordinated Team Hire
Perhaps the most significant feature of the Press Release from an evidentiary standpoint is its framing of the eight hires as a unified, coordinated team acquisition. The Press Release does not announce each hire separately or characterize the additions as the result of independent recruiting processes. Instead, it announces all eight hires simultaneously in a single release, explicitly and repeatedly referring to the group as a "team."
The Press Release identifies Priya Rathore by name and announces her appointment to the role of "President, Merchandising & Strategy" — a position described in the release as "newly created," indicating that Verdana established the role specifically to accommodate Ms. Rathore. This framing is significant because it demonstrates that the hiring was not opportunistic or reactive, but rather the result of deliberate organizational planning by Verdana to create a senior leadership position tailored to Ms. Rathore's profile and responsibilities.
In addition to Ms. Rathore, the Press Release names all seven other members of the Rathore Group and identifies their respective titles at Verdana. The release characterizes the collective hire as "a strategic talent acquisition" and describes the group as bringing "complementary expertise across merchandising, private-label strategy, vendor relations, analytics, and eCommerce" — language that mirrors the organizational structure and functional divisions of CRH's own merchandising department under Ms. Rathore's leadership.
Evidentiary Significance. The Press Release's characterization of the hire as a coordinated "team" acquisition supports the critical inference that Verdana engaged in a deliberate, pre-planned effort to recruit an entire functioning business unit from a direct competitor. This inference is a hallmark of tortious interference claims in the employment context. Courts have recognized that the simultaneous hiring of a complete team from a competitor is qualitatively different from the independent recruitment of individual employees, because team hiring evidences a purpose to acquire not merely the skills of individual employees, but the collective knowledge, working relationships, and institutional capabilities that the team developed at its prior employer. The Press Release, authored by Verdana itself, confirms that this is precisely what occurred.
B. Statements by Verdana CEO Warren Dietrich
The Press Release contains a direct quotation attributed to Warren Dietrich, Verdana's Chief Executive Officer. Mr. Dietrich's quoted statements are among the most significant portions of the document from an evidentiary perspective.
First, Mr. Dietrich is quoted praising the "deep expertise" and "proven track record" that the Rathore Group brings from "a leading omnichannel retailer." While the Press Release does not name Cascade by name, the reference to "a leading omnichannel retailer" is a thinly veiled description of CRH. In the context of the retail industry, and given that all eight members of the Rathore Group are publicly known to have been CRH employees (as confirmed by their Westmark Health IT profiles, industry reporting, and CRH's own public filings), there can be no genuine dispute that this language refers to CRH. The reference confirms Verdana's awareness that it was hiring employees from CRH — a direct competitor — and that it valued the team precisely because of its CRH experience.
Second, and more critically, Mr. Dietrich's quoted statements reference the team's specific capabilities in "private-label development, seasonal category management, and vendor relationship optimization." These three competency areas are of particular significance because they map precisely to the subject matter of CRH's confidential Project Ridgeline strategic plan, which was developed by Ms. Rathore and her team during 2023–2024 and which constitutes some of CRH's most closely guarded proprietary information. Project Ridgeline sets forth CRH's five-year strategy for expanding its private-label product portfolio, optimizing seasonal category management using proprietary algorithms, and restructuring its domestic vendor relationships to achieve margin improvements. Mr. Dietrich's specific enumeration of these three areas in the Press Release is therefore not merely coincidental — it directly implicates the categories and competencies in which the departing employees had access to CRH's most sensitive confidential information and trade secrets.
Third, Mr. Dietrich's statements in the Press Release tie the Rathore Group hires to Verdana's previously announced "transformational growth initiative" targeting $4 billion in annual revenue by 2028. That growth initiative, which Verdana announced publicly in November 2024, specifically cited expansion into CRH's strongest product categories — private-label home goods and seasonal décor — as primary growth vectors. By linking the Rathore Group hires to this initiative, Mr. Dietrich effectively admits that Verdana hired the CRH team as a means of executing a strategy designed to compete directly in CRH's most profitable business segments.
Evidentiary Significance. Mr. Dietrich's statements in the Press Release establish Verdana's motive with unusual clarity. They demonstrate that Verdana's purpose in hiring the Rathore Group was to acquire CRH's competitive advantages in specific product categories by recruiting the very team that developed and executed CRH's strategies in those categories. This is direct evidence of knowledge and intent — two elements essential to a tortious interference claim. Moreover, because Mr. Dietrich made these statements in his capacity as Verdana's CEO, they constitute authorized statements by a party-opponent and carry significant weight as admissions.
C. Statements Attributed to Priya Rathore
The Press Release also contains a direct quotation attributed to Priya Rathore in her new capacity as Verdana's President, Merchandising & Strategy. While Ms. Rathore's statements are somewhat more guarded than Mr. Dietrich's, they nonetheless contain language of evidentiary value.
Ms. Rathore is quoted expressing enthusiasm about "building on" her prior experience and "bringing transformative merchandising strategies to a new platform." The phrase "building on" her prior experience is particularly noteworthy. While this language could be characterized as a generic career aspiration — the type of forward-looking statement commonly included in corporate press releases — it arguably signals an intent to leverage the knowledge, strategies, and methodologies that Ms. Rathore developed during her nearly six-year tenure at CRH. In context, the phrase suggests continuity rather than a fresh start: Ms. Rathore intends to use what she learned at CRH as a foundation for her work at Verdana.
Additionally, Ms. Rathore's quoted statements reference "data-driven category expansion" and "vendor ecosystem optimization." This language is notable for two reasons. First, it mirrors the terminology and scope of Project Ridgeline, which Ms. Rathore personally led at CRH and which centered on data-driven expansion of CRH's category portfolio and optimization of CRH's vendor ecosystem. Second, the reference to "data-driven" methodologies is significant in light of the data exfiltration evidence being developed by Pinnacle Forensics, which indicates that among the files downloaded from CRH systems in the weeks preceding the resignations were CRH's proprietary seasonal buying algorithms, customer segmentation data, and vendor negotiation playbooks — all of which would be essential inputs to a "data-driven category expansion" strategy.
Evidentiary Significance. While Ms. Rathore's statements are more circumspect than Mr. Dietrich's, the specificity of the referenced competencies maps directly to CRH's confidential information and trade secrets. The statements support the inference that Verdana hired the Rathore Group precisely for their access to CRH's proprietary methodologies and strategic plans, and that Ms. Rathore intends to deploy that knowledge at Verdana. At the very least, the statements undermine any future argument by Verdana or Ms. Rathore that the hire was motivated solely by general industry expertise rather than by the team's specific knowledge of CRH's proprietary strategies.
D. Reference to Greystone Capital Partners, LP
The Press Release contains a reference to Greystone Capital Partners, LP as Verdana's majority equity holder and notes Greystone's "strategic support" for the growth initiative to which the Rathore Group hires are linked. Greystone Capital Fund VII, LP acquired a majority equity stake in Verdana in Q3 2023 in a transaction valuing the company at approximately $2.4 billion enterprise value. Greystone Capital Fund VII, LP has approximately $8.5 billion in committed capital and is one of the more prominent middle-market and upper-middle-market private equity sponsors active in the retail and consumer sectors.
The Press Release references or quotes Elliot Westbrook, Managing Partner of Greystone, endorsing the talent acquisition as "consistent with Greystone's investment thesis" for Verdana. By including Mr. Westbrook's endorsement, the Press Release creates a direct link between the private equity sponsor and the decision to recruit the Rathore Group. Notably, this is not a passing reference — Greystone's involvement is positioned as a core element of the narrative, suggesting that the PE sponsor played an active role in shaping and approving the recruitment strategy.
Evidentiary Significance. The reference to Greystone in the Press Release implicates the PE sponsor in the coordinated recruitment scheme and potentially supports a civil conspiracy claim against Greystone. Under Delaware law, liability for civil conspiracy requires evidence of a confederation or combination of two or more persons to accomplish an unlawful purpose. The Press Release's characterization of Greystone's "strategic support" for the growth initiative — an initiative that Verdana's own CEO has linked directly to the hiring of the Rathore Group — suggests that Greystone was not merely a passive equity holder but an active participant in the decision to recruit CRH's merchandising leadership.
This inference is substantially corroborated by evidence being developed independently of the Press Release. Specifically, Aurelian Investigations has identified a dinner meeting on January 6, 2025, at a private dining room in a restaurant in Midtown Manhattan, among Warren Dietrich (Verdana CEO), Elliot Westbrook (Greystone Managing Partner), and Priya Rathore. This meeting occurred approximately one month before the coordinated resignations and two months before the Press Release. The fact that Greystone's Managing Partner participated personally in what appears to have been an early-stage recruitment meeting, and that the Press Release subsequently acknowledged Greystone's strategic involvement, creates a strong evidentiary foundation for the argument that Greystone was a co-conspirator in the tortious interference scheme.
Additionally, preliminary information from Aurelian Investigations and publicly available filings suggests that the aggregate sign-on bonuses offered to the Rathore Group totaled approximately $6.2 million — $1.5 million to Ms. Rathore and approximately $4.7 million in the aggregate to the other seven members — funded through Verdana's financial resources backed by Greystone's equity commitment. The magnitude of these bonuses, which far exceed market norms for comparable positions, further suggests that Greystone provided the financial wherewithal to induce the Rathore Group's departure from CRH.
E. Competitive Overlap Language
The Press Release describes Verdana's growth targets in categories including "home goods, apparel, and seasonal décor." These are core CRH product categories. Based on CRH's internal category taxonomy and Verdana's publicly reported product segmentation, there are at least 28 overlapping product categories in which CRH and Verdana compete directly.
CRH's merchandising division, which the Rathore Group led and managed, accounted for approximately $2.3 billion in gross merchandise value in FY2024. CRH's total FY2024 revenue was approximately $6.82 billion, meaning the merchandising categories overseen by the Rathore Group represent approximately 34% of CRH's total revenue. These are not marginal business lines — they are among CRH's highest-margin and most strategically important segments.
By contrast, Verdana's FY2024 estimated revenue was approximately $1.9 billion. The $4 billion revenue target by 2028 articulated in the Press Release and in Verdana's earlier November 2024 growth initiative announcement would require Verdana to more than double its revenue over a four-year period. Based on publicly available information regarding Verdana's growth in its existing product categories, it appears that the bulk of the incremental revenue required to reach the $4 billion target must come from expansion into new categories — categories in which CRH is currently dominant and in which the Rathore Group has deep, CRH-specific expertise.
Evidentiary Significance. The competitive overlap language in the Press Release demonstrates that Verdana knowingly hired the Rathore Group to compete directly in CRH's strongest market segments. This makes the harm to CRH not only foreseeable but intended. The Press Release effectively admits that the purpose of the hires was to accelerate Verdana's entry into and growth within categories where CRH has built its competitive position over many years — categories that the Rathore Group helped develop and manage at CRH. This evidence bears directly on both the intent and damages elements of CRH's tortious interference claim.
F. Timing of the Press Release
The timing of the Press Release warrants separate analysis. The Press Release was issued on February 14, 2025, exactly seven days after the coordinated resignations on February 7, 2025. The speed with which Verdana was able to issue a polished, detailed press release announcing the hires is itself evidentiary.
Corporate press releases of the nature and complexity of the Verdana Press Release — announcing multiple senior hires, including extensive quotations from the CEO and incoming executives, and linking the hires to a broader strategic initiative — typically require significant lead time to prepare. The drafting process alone involves input from communications, legal, and executive stakeholders. Legal review is particularly time-consuming when, as here, the press release discusses the recruitment of employees from a direct competitor — review for competitive sensitivity, defamation risk, and regulatory compliance is standard practice. Executive approval by the CEO (and, in this case, apparently by Greystone's managing partner) adds additional time to the process.
The fact that Verdana was able to issue this Press Release within seven calendar days — including a weekend — of the resignations creates a strong inference that the Press Release was substantially drafted before the resignations occurred, or at the very least that Verdana had been planning the announcement for some time in advance of the public departure date. This inference is consistent with a pre-arranged coordination between Verdana and the Rathore Group regarding the timing of the departures and the public announcement of the hires.
It is further significant that CRH Chief People Officer Roland Ashby did not alert CRH General Counsel Theresa Yun-Park to the mass departure until February 10, 2025 — three days after the resignations. CRH's legal team had therefore not even begun its assessment of the restrictive covenant implications when Verdana published the Press Release on February 14. Verdana thus went public with the hires at a time when CRH was still in the initial stages of understanding the scope of the departures, and well before CRH had retained outside counsel or taken any legal action. The timing suggests that Verdana sought to establish the hires as a fait accompli in the public domain before CRH could respond.
Evidentiary Significance. The rapid issuance of the Press Release is circumstantial evidence of pre-arranged coordination between Verdana and the Rathore Group. It suggests that the resignations and the public announcement were part of a single, pre-planned sequence of events, further supporting CRH's claims of tortious interference and civil conspiracy.
IV. Evidentiary Implications for Specific Claims
This section maps the Press Release evidence to the specific elements of each cause of action that CRH is preparing to assert.
A. Tortious Interference with Contractual Relations (Against Verdana)
Under Delaware law, a claim for tortious interference with contractual relations requires proof of the following elements: (1) the existence of a valid contract; (2) the defendant's knowledge of the contract; (3) the defendant's intentional interference causing a breach of the contract; and (4) resulting damages to the plaintiff. See Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983 (Del. Ch. 1987); Restatement (Second) of Torts § 766 (1979). The Press Release bears on each of these elements, as follows:
Element 1 — Existence of a Contract. The employment agreements containing restrictive covenant provisions are the relevant contracts for purposes of this claim. As described above in Section II.B, all eight members of the Rathore Group signed employment agreements with CRH that contain non-competition, non-solicitation, and confidentiality covenants. Each agreement is governed by Delaware law. The existence and enforceability of these contracts will be established through the agreements themselves and the testimony of CRH General Counsel Theresa Yun-Park. While the Press Release does not directly reference the employment agreements, it is relevant to this element insofar as it confirms the employment relationship between the Rathore Group and CRH.
Element 2 — Knowledge. The Press Release is highly probative on the element of knowledge. By acknowledging the team's CRH background and characterizing them as coming from "a leading omnichannel retailer," the Press Release creates a strong inference that Verdana was aware that the employees had contractual obligations to CRH. Under Delaware law, knowledge for purposes of tortious interference can be either actual or constructive. See WaveDivision Holdings, LLC v. Millennium Digital Media Sys., LLC, 2010 WL 3706624 (Del. Ch. Sept. 17, 2010). Even if Verdana were to argue that it lacked actual knowledge of the specific restrictive covenant terms, Verdana's sophistication as a PE-backed competitor with its own in-house legal counsel — Helen Tsoi serves as Verdana's General Counsel — makes a constructive knowledge argument particularly compelling. Any reasonable sophisticated competitor in the retail industry would understand that senior merchandising executives departing a major publicly traded retailer are likely subject to restrictive covenants. Moreover, industry custom and practice in the retail sector is that senior executives and management-level employees are routinely subject to non-competition and non-solicitation agreements. Verdana's in-house counsel, who would have been involved in the legal review of the Press Release and the hiring process, would have been expected to conduct a review of the departing employees' contractual obligations as a matter of standard due diligence.
Element 3 — Intentional Interference. The Press Release establishes Verdana's affirmative intent to hire the entire Rathore Group as a team for the express purpose of competing in CRH's core product categories. The specificity of Mr. Dietrich's references to "private-label development, seasonal category management, and vendor relationship optimization" directly implicates the subject matter areas covered by the restrictive covenants. The coordinated nature of the hire — announced as a single team acquisition rather than as a series of independent hires — goes well beyond the passive acceptance of unsolicited applications. The Press Release portrays the recruitment as a proactive strategic initiative undertaken by Verdana and endorsed by its PE sponsor, not as a response to inbound employee interest. This framing supports the inference of intentional interference — that Verdana actively induced the employees to breach their contractual obligations by leaving CRH and joining a direct competitor.
Element 4 — Damages. The Press Release's own articulation of Verdana's growth targets provides a useful framework for quantifying the competitive harm to CRH. The $4 billion revenue target by 2028, pursued by competing directly in CRH's strongest categories using the knowledge and expertise of CRH's former merchandising leadership, provides an external benchmark for the scope of competitive diversion that CRH can expect to suffer. Dr. Franklin Oberg of Veltrano Consulting Group LLC, whom we expect to engage on or about March 3, 2025, as CRH's damages expert, can use Verdana's own publicly stated growth targets as a foundation for damages modeling. The Press Release thus not only provides evidence of liability but also supplies an input for the quantification of CRH's losses.
Overall Assessment. The Press Release is a powerful evidentiary exhibit for the tortious interference claim. It constitutes a party admission by Verdana that should be admissible without hearsay limitations, as discussed further in Section V below. It is the rare case in which a defendant's own public statements so directly address the elements of the plaintiff's claim. We recommend that the Press Release be featured prominently in both the Verified Complaint and the TRO/PI motion.
B. Civil Conspiracy (Against Verdana, Greystone, and the Individual Defendants)
Under Delaware law, a claim for civil conspiracy requires proof of: (1) a confederation or combination of two or more persons; (2) an unlawful act done in furtherance of the conspiracy; and (3) actual damages resulting from the unlawful act. See Nicolet, Inc. v. Nutt, 525 A.2d 146 (Del. 1987). Civil conspiracy is not an independent cause of action but rather a means of imposing joint and several liability for the underlying tortious conduct upon all members of the conspiracy.
Element 1 — Confederation. The Press Release's description of the hire as a single, coordinated team acquisition is powerful evidence of a confederation or combination. When read in conjunction with the simultaneous resignation timing — all eight members of the Rathore Group submitting resignation emails at 4:47 PM PST on February 7, 2025 — the Press Release supports the inference of a pre-arranged agreement among multiple parties: Ms. Rathore, the other seven departing employees, Verdana (acting through Mr. Dietrich and other executives), and Greystone (acting through Mr. Westbrook).
The press release's specific reference to Greystone's strategic involvement is essential to establishing the confederation element as to Greystone. Without this reference, CRH would need to rely solely on extrinsic evidence (such as the January 6 dinner meeting) to connect Greystone to the scheme. The Press Release, by its own terms, confirms that Greystone was an active strategic partner in the growth initiative that motivated the hires.
Element 2 — Unlawful Act. The underlying tortious interference with contractual relations and inducement of breach of the restrictive covenant obligations constitute the predicate unlawful acts done in furtherance of the conspiracy. As established in Section IV.A above, the Press Release provides evidence that Verdana intentionally hired the Rathore Group with knowledge (actual or constructive) of their contractual obligations to CRH and for the purpose of competing directly in CRH's core product categories.
Element 3 — Actual Damages. The damages flowing from the conspiracy are co-extensive with the damages from the tortious interference claim — the competitive harm to CRH resulting from the loss of its senior merchandising team and the deployment of that team's CRH-specific knowledge at a direct competitor. As noted above, the Press Release's own articulation of Verdana's growth targets provides a framework for quantifying these damages.
Greystone's Role. The Press Release's reference to Greystone's "strategic support," combined with external evidence including the aggregate $6.2 million in sign-on bonuses funded through Verdana's Greystone-backed financial resources ($1,500,000 to Rathore and $4,700,000 in the aggregate to the other seven members of the group), supports the argument that Greystone was a co-conspirator that provided the financial means and strategic impetus for the tortious conduct. Greystone's managing partner, Elliot Westbrook, personally participated in the January 6, 2025 recruitment dinner with Rathore and Dietrich. The Press Release's acknowledgment of Greystone's role corroborates the inference that Greystone was not merely a passive investor but an active driver of the recruitment strategy.
Rathore's Role. The Press Release positions Ms. Rathore in the newly created title of President, Merchandising & Strategy at Verdana, suggesting that she was the linchpin organizer of the coordinated departure. This is consistent with the evidence being developed by Aurelian Investigations, which has identified encrypted messaging exchanges among members of the Rathore Group between approximately January 13 and January 24, 2025, in which departure timing and logistics appear to have been coordinated. The creation of a senior executive role specifically for Ms. Rathore, as announced in the Press Release, confirms that Verdana and Greystone regarded Ms. Rathore as the central figure in the talent acquisition — the person who could deliver an entire functioning merchandising team.
C. Misappropriation of Trade Secrets (DUTSA)
CRH's anticipated claim for misappropriation of trade secrets under the Delaware Uniform Trade Secrets Act, 6 Del. C. §§ 2001–2009, is primarily supported by the data exfiltration evidence being developed by Pinnacle Forensics. The Press Release does not directly evidence data exfiltration and is therefore of secondary relevance to this claim. However, it provides useful circumstantial evidence in several respects.
The Press Release's specific references to competency areas that map directly to CRH's trade secrets — including private-label development, seasonal category management, vendor relationship optimization, and data-driven category expansion — create circumstantial evidence that Verdana hired the Rathore Group with the intent to exploit CRH's proprietary information. These competency areas correspond to the following categories of CRH trade secrets:
• Project Ridgeline: CRH's comprehensive five-year strategic plan for category expansion and margin improvement, developed by the Rathore Group during 2023–2024;
• Vendor Negotiation Playbooks: Proprietary frameworks and templates for negotiating terms with CRH's domestic and international vendor base;
• Seasonal Buying Algorithms: Proprietary quantitative models used to optimize CRH's seasonal inventory purchasing and allocation decisions;
• Private-Label Sourcing Strategies: Confidential strategies and supplier relationships for CRH's private-label product lines; and
• Five-Year Category Expansion Roadmap: A detailed internal plan identifying target categories for growth and the investment required to capture market share.
The Press Release's language about "data-driven category expansion" is particularly notable in light of the data exfiltration evidence. Among the files that Pinnacle Forensics has identified as having been downloaded from CRH systems between January 10 and February 4, 2025, are files containing CRH's proprietary seasonal buying algorithms and customer segmentation data. These are precisely the types of "data-driven" tools and resources that Ms. Rathore's Press Release quotes reference and that Verdana's growth strategy apparently contemplates deploying.
While the Press Release alone is insufficient to establish misappropriation, it provides important contextual evidence linking Verdana's stated strategic intent to the specific categories of trade secrets at issue, and it supports the inference that the data exfiltration was not incidental but was undertaken in furtherance of a coordinated plan to transfer CRH's proprietary methodologies to Verdana.
V. Evidentiary Considerations and Admissibility
A. Admissibility. The Press Release should be admissible in the anticipated litigation proceedings without hearsay limitations, for the following reasons:
First, the Press Release is a statement by a party-opponent. Verdana is a named defendant in CRH's anticipated action, and the Press Release is a public statement issued by Verdana in the ordinary course of its business communications. Under Delaware Rule of Evidence 801(d)(2)(A), a statement is not hearsay if it is offered against an opposing party and was made by the party in an individual capacity or, under Rule 801(d)(2)(B), is one the party manifested that it adopted or believed to be true. The Press Release is self-evidently a statement that Verdana adopted and authorized for public distribution. It is therefore admissible as a non-hearsay party admission.
Second, the statements attributed to Warren Dietrich, Verdana's CEO, are authorized statements by an agent of Verdana. Under Rule 801(d)(2)(C) and (D), a statement is not hearsay if it was made by a person authorized by the party to make a statement on the subject, or by the party's agent or employee on a matter within the scope of that relationship and while it existed. As CEO, Mr. Dietrich is authorized to speak on Verdana's behalf on matters of corporate strategy and personnel, and his statements in the Press Release fall squarely within this authorization.
Third, the statements attributed to Priya Rathore may be admissible against Verdana as statements by an agent. Although Ms. Rathore was newly hired at the time the Press Release was issued, she is identified as Verdana's "President, Merchandising & Strategy," and her quoted statements were included in and authorized by Verdana's official corporate communication. To the extent Ms. Rathore is named as an individual defendant, her statements are also admissible as party admissions in their own right.
Fourth, any reference to Greystone's involvement in the Press Release may also be admissible against Greystone as a co-conspirator statement under Rule 801(d)(2)(E), provided the foundation for the conspiracy can be established through independent evidence. Under this rule, a statement made by a co-conspirator during the course of and in furtherance of the conspiracy is admissible against all members of the conspiracy. Given the evidence of the January 6, 2025 dinner meeting involving Greystone's managing partner and the financial backing that Greystone provided for the sign-on bonuses, there is a strong basis for establishing the foundational requirements for co-conspirator admissibility.
B. Preservation. The Press Release should be preserved in its original form, including all associated metadata, web archive snapshots, and any wire service distribution records. Given the likelihood that Verdana may alter or remove the Press Release from its corporate website after receiving CRH's cease-and-desist letters (delivered February 25, 2025) or upon learning of CRH's intent to file suit, preservation should be treated as a matter of urgency.
Specifically, we recommend the following preservation steps:
1. Capture a certified web archive of the Press Release as it currently appears on Verdana's corporate website, using both (a) the Internet Archive's Wayback Machine (to establish a third-party timestamp) and (b) a forensic web capture by Pinnacle Forensics LLC (to ensure chain-of-custody documentation suitable for evidentiary use);
2. Obtain a copy of the Calderon Data Systems distribution record for the Press Release, which will establish the precise date, time, and distribution scope of the release;
3. Preserve any third-party media coverage that republished or quoted from the Press Release, including the articles published by Ridgeline Partners LLC, Strathmore Partners LLC, and Modern Retail; and
4. Catalogue the Press Release as a key exhibit in the anticipated TRO/PI motion filing and assign it an exhibit number in the master exhibit list being maintained for this matter.
We have communicated this preservation request to Pinnacle Forensics and are awaiting confirmation that the web capture has been completed.
C. Potential Counterarguments
We anticipate that Verdana, Greystone, and the individual defendants may raise several counterarguments regarding the evidentiary significance of the Press Release:
Counterargument 1: The Press Release is generic corporate communications. Defendants may argue that the Press Release contains standard corporate boilerplate and does not demonstrate actual knowledge of the specific restrictive covenant provisions contained in the departing employees' CRH employment agreements. They may contend that acknowledging a new hire's prior employer is routine and does not constitute an admission of knowledge of that employer's contractual rights.
Response. While it is true that corporate press releases often reference new hires' professional backgrounds, the Press Release here goes well beyond generic biographical information. The level of specificity in Mr. Dietrich's references to competency areas that map precisely to CRH's proprietary strategies, the characterization of the hire as a coordinated "team" acquisition, and the explicit linkage of the hires to Verdana's growth initiative targeting CRH's core categories collectively distinguish this Press Release from routine corporate communications. Moreover, under Delaware law, constructive knowledge is sufficient — and a sophisticated PE-backed competitor cannot credibly claim ignorance of the likelihood that eight senior employees departing a major retailer simultaneously were subject to restrictive covenants.
Counterargument 2: Hiring a "team" is not per se evidence of tortious interference. Defendants may argue that companies routinely hire multiple employees from a single competitor and that the use of the word "team" in a press release does not establish tortious intent.
Response. This argument mischaracterizes CRH's claim. CRH does not contend that hiring multiple employees from a competitor is per se tortious. Rather, CRH contends that the coordinated recruitment of an intact business unit — eight members of a single department, led by their senior vice president, all departing simultaneously and all subject to restrictive covenants — constitutes deliberate interference with CRH's contractual rights when undertaken with knowledge of those rights and with the intent to acquire the team's CRH-specific knowledge and competitive capabilities. The totality of the circumstances, including the evidence being developed by Aurelian Investigations (the January 6, 2025 dinner meeting, the encrypted pre-departure communications) and Pinnacle Forensics (the data exfiltration), will provide substantial additional corroboration that this was not an innocent hiring process but a coordinated scheme to strip CRH of its merchandising leadership and proprietary knowledge.
Counterargument 3: The Press Release was issued by Verdana's communications department and does not reflect the company's legal analysis or awareness of contractual issues. Defendants may attempt to characterize the Press Release as the work of the marketing or public relations function rather than as a statement reflecting the company's legal knowledge.
Response. This argument is irrelevant for purposes of admissibility, as statements by a party-opponent are admissible regardless of which department within the organization authored them. For purposes of substantive weight, the argument fails because (a) press releases of this nature necessarily undergo legal review before publication, and (b) the statements attributed to the CEO represent the highest level of corporate authority. Even if the Press Release were drafted by a junior communications staffer, its publication with the CEO's authorized quotation makes it an official corporate statement for all purposes.
VI. Recommendations
Based on the foregoing analysis, I respectfully recommend the following actions:
1. Include the Press Release as a Key Exhibit. The Press Release should be designated as a primary exhibit and attached to both the Verified Complaint and the emergency TRO/PI motion being prepared for filing in the Delaware Court of Chancery. It should be cited prominently in the factual background section and in the argument sections addressing the likelihood of success on the merits of CRH's tortious interference and civil conspiracy claims.
2. Preserve the Press Release in Its Current Online Form. As described in Section V.B above, the Press Release should be forensically preserved through both third-party web archive services and a certified forensic capture by Pinnacle Forensics LLC. I recommend that Pinnacle Forensics be instructed to add this preservation task to their current scope of engagement immediately, given the risk that Verdana may alter or remove the Press Release from its website upon receiving the cease-and-desist letters or learning of CRH's litigation plans.
3. Cross-Reference with Aurelian Investigations' Findings. The Press Release should be cross-referenced with Aurelian Investigations Group Inc.'s findings regarding the January 6, 2025 dinner meeting involving Dietrich, Westbrook, and Rathore, as well as the pre-resignation encrypted communications among the Rathore Group (January 13–24, 2025). These independent data points corroborate the inferences drawn from the Press Release and will enable us to construct a comprehensive, multi-source timeline of the conspiracy from inception through execution and public announcement.
4. Use the Press Release Language in the Cease-and-Desist Letters. To the extent the cease-and-desist letters to Verdana and Greystone are being finalized for delivery, I recommend incorporating specific quotations from the Press Release to demonstrate CRH's awareness of the coordinated nature of the recruitment scheme and to put Verdana and Greystone on notice that their own public statements will be used against them.
5. Brief Bernard Crawford on These Findings. Senior Partner Bernard Crawford, who is overseeing the overall litigation strategy for this matter, should be briefed on the evidentiary significance of the Press Release for incorporation into the comprehensive strengths/weaknesses assessment being prepared. The Press Release materially strengthens CRH's position on the knowledge and intent elements of the tortious interference claim and provides an additional basis for connecting Greystone to the conspiracy.
6. Flag for Veltrano Consulting Group. Once Dr. Franklin Oberg of Veltrano Consulting Group LLC is formally engaged as CRH's damages expert (anticipated on or about March 3, 2025), his team should be provided with the Press Release as a foundational document for damages modeling. Verdana's own publicly articulated growth targets ($4 billion in revenue by 2028, pursued through expansion into CRH's core categories) may serve as a useful — and, from CRH's perspective, highly favorable — input for quantifying the competitive harm that CRH will suffer as a result of the tortious conduct.
VII. Conclusion
The February 14, 2025 Verdana Press Release is a significant evidentiary asset for CRH's claims. It constitutes a contemporaneous, self-authored party admission by Verdana that was issued before the commencement of litigation and before Verdana had any reason to temper its public messaging in anticipation of legal proceedings. The Press Release establishes, in Verdana's own words:
• The coordinated nature of the Rathore Group hire, characterized by Verdana itself as a "team" acquisition;
• Verdana's awareness that the employees came from CRH, a direct competitor, and that the team possessed deep expertise in specific competency areas;
• Verdana's intent to deploy the Rathore Group's CRH-developed expertise to compete directly in CRH's core product categories — private-label home goods, seasonal décor, vendor relations, and data-driven category management;
• Greystone Capital Partners' involvement in the strategic growth initiative that motivated the recruitment; and
• The pre-planned nature of the recruitment, as evidenced by the rapid issuance of a polished, detailed press release within seven days of the coordinated resignations.
These admissions bear directly on the elements of CRH's claims for tortious interference with contractual relations, civil conspiracy, and, in a supporting capacity, misappropriation of trade secrets. I recommend treating the Press Release as a cornerstone exhibit in CRH's upcoming litigation filings and ensuring that it is preserved, catalogued, and cross-referenced with the full body of evidence being assembled by the litigation team and our investigative and forensic consultants.
I am available to discuss this analysis at your convenience and to incorporate your feedback as we continue to develop the factual record and prepare the Verified Complaint and TRO/PI motion for filing.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Devon Archer Associate 1301 K Street NW, Suite 1200 Washington, DC 20005 Direct: (202) 555-4871
Email: d.archer@calderwoodharkness.com
VIII. Attachment
Attachment A: Full text of Verdana Commerce Group, Inc. press release dated February 14, 2025, titled "Verdana Commerce Welcomes Industry-Leading Merchandising Team to Accelerate Growth" (printed copy and web archive link).
Printed copy and web archive link maintained in Matter No. 1038-00006 document management system. Forensic web capture pending confirmation from Pinnacle Forensics LLC.

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