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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
ALIXPARTNERS, LLP, ALIXPARTNERS HOLDINGS, LLP, ALIXPARTNERS (SHANGHAI) BUSINESS ADVISORY SERVICES LIMITED, and ALIXPARTNERS HONG KONG LIMITED
Plaintiffs,
v. ERIC THOMPSON and IVO NAUMANN,
Defendants.
) ) ) ) ) ) ) ) ) ) ) ) )
Case No. _______
VERIFIED COMPLAINT
AlixPartners, LLP, a Delaware limited liability partnership, AlixPartners
Holdings, LLP, a Delaware limited liability partnership, AlixPartners (Shanghai)
Business Advisory Services Limited (“AlixPartners Shanghai”), a Shanghai, China
wholly foreign-owned enterprise, and AlixPartners Hong Kong Limited
(“AlixPartners Hong Kong”), a Hong Kong private company limited by shares,
(collectively, “AlixPartners” or “Plaintiffs”), for their Complaint against Eric
Thompson (“Mr. Thompson”), and Ivo Naumann (“Mr. Naumann,” and together
with Mr. Thompson, “Defendants”), state as follows:
EFiled: Apr 09 2014 06:19PM EDT Transaction ID 55278563
Case No. 9523-
2
NATURE OF THE ACTION
1. This action arises from Defendants’ scheme to steal AlixPartners’
trade secrets and other highly sensitive and confidential documents for their own
benefit and the benefit of McKinsey & Company (“McKinsey”), a competitor of
AlixPartners. Beginning at least as early as September 2013, and with increasing
frequency through the dates of their departures in January 2014 and March 2014,
respectively, Defendants sent to their personal e-mail accounts, and to each other,
at least 20 documents, some more than once, containing Plaintiffs’ trade secrets
and proprietary information without permission. These misappropriated trade
secrets and proprietary information included sensitive pricing, financial, client and
referral source information as well as marketing and recruiting strategies. Through
this misconduct, Defendants violated state law and acted in utter disregard for their
contractual and fiduciary obligations to AlixPartners.
PARTIES
2. AlixPartners, LLP is a Delaware limited liability partnership with its
principal place of business at 2000 Town Center, Suite 2400, Southfield, Michigan,
48075. AlixPartners is a leading global business advisory firm that specializes in
turnaround and restructuring and provides consulting services ranging from
enterprise improvement to information management.
3
3. AlixPartners Holdings, LLP is a Delaware limited liability partnership
with its principal place of business at 2000 Town Center, Suite 2400, Southfield,
Michigan, 48075.
4. AlixPartners Shanghai is a wholly foreign-owned enterprise duly
incorporated in Shanghai, China in accordance with the Law of the People’s
Republic of China on Wholly Foreign-Owned Enterprises with its principal place
of business at Room 4805, 4806 and 4807, 48/F, Tower 2, 1266 Nanjing Road
(W), Shanghai, 200040, China. AlixPartners Shanghai is a leading global business
advisory firm that specializes in turnaround and restructuring and provides
consulting services ranging from enterprise improvement to information
management.
5. AlixPartners Hong Kong is a Hong Kong private company limited by
shares with its principal place of business at LHT Tower, Office 1802, 18/F No. 31
Queen's Road Central Hong Kong. AlixPartners Hong Kong is a leading global
business advisory firm that specializes in turnaround and restructuring and
provides consulting services ranging from enterprise improvement to information
management.
6. Eric Thompson is a former Managing Director of AlixPartners in
Hong Kong. Upon information and belief, Mr. Thompson is a Singapore resident
residing at 46 Meyer Road, Apartment 15-02, Singapore, 4347874.
4
7. Ivo Naumann is a former Managing Director of AlixPartners in
Shanghai. Upon information and belief, Mr. Naumann is a China resident residing
at Jianguo West Road, Lane 56, House 14, Shanghai, 200020, PR China.
JURISDICTION AND VENUE
8. This is an action arising under Delaware common law, contract and
the Delaware Trade Secrets Act.
9. Jurisdiction and venue are proper in this Court because Defendants, as
parties to the Amended and Restated Limited Liability Partnership Agreement of
AlixPartners Holdings, LLP (“LLP Agreement”), dated June 29, 2012, have
consented to jurisdiction and venue in this Court in any proceedings arising out of
or relating to both the LLP Agreement and the Partnership. See Exh. A § 15.9 (“In
any judicial proceeding involving any dispute, controversy or claim arising out of
or relating to this Agreement or the Partnership or its operations, each of the
Partners and the Partnership unconditionally accepts the non-exclusive jurisdiction
and venue of . . . the Court of Chancery of the State of Delaware[.]”).
10. Defendants expressly agreed that the LLP Agreement “shall be
governed by and construed in accordance with the Laws of the State of
Delaware[.]” See Exh. A § 15.8.
11. This Court has jurisdiction over this dispute pursuant to 10 Del. C. §
341.
5
BACKGROUND
12. AlixPartners was founded in 1981 by Jay Alix to focus on corporate
turnaround and restructuring. Since then, AlixPartners has built a global reputation
through work with multinational clients in businesses that range from enterprise
improvement and financial advisory services, to information management, to some
of the largest Chapter 11 reorganizations in history.
13. Mr. Thompson served as a Managing Director in the Hong Kong
office of AlixPartners from May 16, 2011 to January 31, 2014. Mr. Thompson is a
Partner in AlixPartners Holdings, LLP and, as such, is a party to the LLP
Agreement, dated June 29, 2012, attached hereto as Exhibit A.
14. Mr. Naumann served as a Managing Director in the Shanghai office of
AlixPartners from July 9, 2007 to March 14, 2014. He is a Partner in AlixPartners
Holdings, LLP and, as such, is a party to the LLP Agreement, dated June 29, 2012,
attached hereto as Exhibit A.
15. On November 1, 2013 and December 12, 2013, respectively,
Defendants Thompson and Naumann provided notice of their employment
resignations from AlixPartners. To date, Defendants remain Partners of
AlixPartners Holdings, LLP.
16. Defendants planned to join six former AlixPartners senior-level
turnaround and restructuring professionals at McKinsey Restructuring &
6
Transformation Services (“McKinsey RTS”), a subsidiary of McKinsey that
focuses on the restructuring market and competes with Plaintiffs. These six other
individuals that McKinsey has lifted from AlixPartners are Mark Hojnacki, Scott
Mell, Kyle Braden, Kevin Carmody, Jared Yerian, and Will Kersh. Five of them
now serve as senior leaders of McKinsey RTS: Hojnacki as a Senior Vice
President in New York, Mell as a Senior Vice President in Detroit, Braden as a
Senior Vice President in Houston, Carmody as a Practice Leader in Chicago and
Yerian as a Practice Leader in Chicago. Kersh is a McKinsey RTS associate. Mr.
Thompson began working as an RTS Partner at McKinsey’s office in Singapore as
early as March 2014. Mr. Naumann is expected to take on a leadership role in
McKinsey RTS’s Asia practice in the near future.
17. As detailed below, Defendants began discussions with McKinsey as
early as the summer of 2013, yet continued to participate in highly sensitive
AlixPartners meetings and communications without disclosing their blatant
conflict-of-interest.
18. Moreover, as also detailed below, in preparation for their move to
McKinsey, Defendants stole AlixPartners confidential information and trade
secrets for their own benefit and the benefit of McKinsey and McKinsey RTS.
7
Specific Allegations Pertaining to Mr. Thompson
19. Mr. Thompson’s Employment Agreement with AlixPartners Hong
Kong, dated April 29, 2011, contains a Confidential Information provision, in
which he agreed that “during or at any time after the termination of his
employment with the Company[,]” Mr. Thompson shall not “cause the publication
or unauthorized disclosure of any Confidential Information or any other
confidential or business information relating to the Company or any Group
Company[.]” Exh. B, § 9.4.3.
20. Mr. Thompson’s Employment Agreement also includes a Non-
Compete clause that prohibits him being “employed or engaged by . . . a business
anywhere in the Restricted Area which is in competition with the [AlixPartners]
Business” for the period of 12 months after the termination of his employment.
Exh. B., § 11.3. “Restricted Area” is defined as “any country or territory in which
the Group carries out the Business,” which in turn means “any business carried on
by the Company or any Group Company at the date of termination of the
Employee’s employment and with which the Employee has been concerned to a
material extent in the 12 months immediately preceding such termination.” Exh.
B., § 11.1.
21. Mr. Thompson’s Employment Agreement also includes an Employee
Non-Solicit clause that prohibits him from “solicit[ing] or entic[ing] away . . . any
8
Key Employee” of AlixPartners for a period of 12 months following termination.
Exh. B, § 11.2.
22. Mr. Thompson’s Employment Agreement also imposes a Duty of
Loyalty that requires him to “exercise the highest degree of loyalty, care and
diligence when performing his duties[.]” Exh. B, § 3.2.4. Specifically, this
requires Mr. Thompson to “devote his full time, attention and best efforts to the
business and affairs of the Group[,]” Exh. B, § 3.2.2, and restricts him from
“be[ing] engaged, concerned or interested in any other business, trade or
occupation[.]” Exh. B, § 3.2.3. Further, his Employment Agreement prevents him
from “do[ing] anything or through any act, omission or failure to exercise all due
care and diligence caus[ing] anything to be done that may harm the business or the
reputation of the Company[.]” Exh. B, § 3.2.5.
23. Mr. Thompson is also a party to the LLP Agreement, which requires
all Partners, including Mr. Thompson, to “keep confidential, and [] not disclose to
any third Person or use for its own benefit, without the consent of the Board, any
non-public information with respect to the Partnership[.]” Exh. A, § 15.3. In
signing the LLP Agreement, Mr. Thompson “confirm[ed] that damages at Law
would be an inadequate remedy for a breach or threatened breach of this
Agreement[,]” and that “in the event of a breach or threatened breach of any
provision hereof, the respective rights and obligations hereunder shall be
9
enforceable by specific performance, injunction or other equitable remedy, . . . as
well as at Law or otherwise[.]” Exh. A, § 15.11.
24. McKinsey began recruiting Mr. Thompson at least as early as the
summer of 2013. In the summer of 2013, Jon Garcia, a Director at McKinsey, had
an in-person meeting with Mr. Thompson in Washington, D.C., in which Mr.
Thompson told Mr. Garcia that he and Mr. Naumann were considering leaving
AlixPartners.
25. On August 14, 2013, Mr. Thompson sent an e-mail to Mr. Garcia,
with a copy to Mr. Naumann, in which he indicated that he and Mr. Naumann were
interested in working for McKinsey RTS. McKinsey continued to recruit Mr.
Thompson throughout the late summer and fall of 2013; Mr. Garcia flew to Asia to
meet with Mr. Thompson and Dominic Barton, Worldwide Managing Director and
Chief Executive Officer of McKinsey, also called Mr. Thompson to encourage him
to join McKinsey RTS. And, while still employed by AlixPartners, Mr. Thompson
encouraged Mr. Naumann to join McKinsey RTS, as well.
26. Mr. Thompson did not disclose his discussions with McKinsey, his
recruitment of Mr. Naumann, or his intent to join McKinsey RTS to AlixPartners
at any time prior to his November 1, 2013 resignation. As a result, Mr. Thompson
continued to be included in sensitive business and marketing discussions, such as
introductions to clients, potential clients and potential referral sources—including
10
various private equity banks and law firms—to establish the presence of
AlixPartners’ turnaround and restructuring group in Asia, during the time he had
this undisclosed conflict-of-interest.
27. On September 21, 2013, Mr. Thompson, in furtherance of his and Mr.
Naumann’s plan to steal AlixPartners trade secrets and other proprietary
information for their own benefit and the benefit of McKinsey and McKinsey RTS,
forwarded to his personal e-mail account an AlixPartners PowerPoint titled “2010
China Business Review Strategy Discussion,” which contained highly sensitive,
confidential information regarding fees and revenues for AlixPartners’ top
engagements, strategic recruiting information, and strategy for marketing and
business opportunities in Asia, and which would harm AlixPartners if known to a
competitor like McKinsey RTS.
28. On October 10, 2013, also in furtherance of Mr. Thompson’s and Mr.
Naumann’s plan to steal AlixPartners trade secrets and other proprietary
information for their own benefit and the benefit of McKinsey and McKinsey RTS,
Mr. Thompson sent Mr. Naumann a list of the extensive private equity contacts of
Lisa Donahue, the Global Leader of AlixPartners’ Turnaround and Restructuring
business. This was valuable and highly sensitive information that could benefit
Mr. Thompson, Mr. Naumann and McKinsey RTS in their effort to compete with
11
AlixPartners by providing them with the identities and contact information of
referral sources for restructuring work.
29. Mr. Thompson tendered his resignation to AlixPartners on November
1, 2013. Pursuant to the terms of his Employment Agreement, he was placed on
garden leave through January 31, 2014. He commenced employment as a Partner
at McKinsey RTS in Singapore as early as March 2014. McKinsey RTS engages
in competition with AlixPartners’ business in the Restricted Area as defined by the
Employment Agreement, as described above.
30. On November 1, 2013, the day Mr. Thompson resigned, Julie
Severson, a Director in AlixPartners’ Human Resources department, sent Mr.
Thompson a letter confirming his resignation and reminding him of his continuing
obligations to AlixPartners pursuant to his Employment Agreement and the LLP
Agreement.
31. On March 17, 2014, Ms. Severson sent Mr. Thompson a letter
reminding him again of these obligations, including his Non-Compete, Non-Solicit
and Confidentiality restrictions, and informing him that AlixPartners was aware
that he had misappropriated certain documents, and demanding that he return all
such documents. See Exh. C.
12
Specific Allegations Pertaining to Mr. Naumann
32. Mr. Naumann’s Employment Agreement with AlixPartners Shanghai,
dated October 1, 2009, contains a Confidential and Proprietary Information
provision in which he agreed that “during the Term hereof and after the
termination of this Contract for whatsoever reason, the Employee shall not utilize
the Confidential and Proprietary Information for any purpose” and that he “shall
not disclose any such Confidential and Proprietary Information to any other
company or person, organization or entity for any purpose and in any manner.”
Exh. D, § 6.2.
33. Mr. Naumann’s Employment Agreement also contains an Employee
Non-Solicit provision, in which he agreed that “[d]uring the Term of this Contract
and after the termination, . . . Employee will not . . . entice or seek to entice away
any director or other officer or any senior employee of such company from the
Company or its affiliate(s)[.]” Exh. D, § 8.1.1.
34. Mr. Naumann’s Employment Agreement also contains a Client Non-
Solicit provision, in which he agreed that “[d]uring the Term of this Contract and
after the termination, . . . Employee will not . . . solicit or seek to solicit the
business of any person, firm or company which has at any time been a customer or
client of the Company or its affiliate(s) within a period of twenty four (24) months
preceding Termination[.]” Exh. D, § 8.1.2.
13
35. Mr. Naumann acknowledged that “[a]ny violation of [his Non-Solicit]
obligations will cause immeasurable damages to the Company.” Exh. D, § 8.2.
Accordingly, Mr. Naumann explicitly agreed to “reimburse or compensate the
Company for reasonable fees and expenses (including, without limitation, attorney
fees) incurred by the Company in investigating and prosecuting the Employee’s
breach of this [section].” Id.
36. Mr. Naumann’s Employment Agreement also imposes a Duty of
Loyalty that requires him to “use his best efforts” in achieving AlixPartners’
objectives, Exh. D., § 1.3.1, and to “perform his duties . . . faithfully and diligently
for the Company[,]” Exh. D., § 1.3.2. This Duty of Loyalty also prohibits Mr.
Naumann from engaging in any activities “which may be prejudicial to the
interests of the Company[.]” Exh. D., § 1.3.3.
37. Mr. Naumann is also a party to the LLP Agreement, which requires all
Partners, including Mr. Naumann, to “keep confidential, and [] not disclose to any
third Person or use for its own benefit, without the consent of the Board, any non-
public information with respect to the Partnership[.]” Exh. A, § 15.3. In signing
the LLP Agreement, Mr. Naumann “confirm[ed] that damages at Law would be an
inadequate remedy for a breach or threatened breach of this Agreement[,]” and that
“in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
14
performance, injunction or other equitable remedy, . . . as well as at Law or
otherwise[.]” Exh. A, § 15.11.
38. Like Mr. Thompson, Mr. Naumann had been in touch with Jon Garcia
at McKinsey since at least as early as August 14, 2013 to discuss the possibility of
joining McKinsey RTS.
39. While being recruited by Jon Garcia, Mr. Naumann was also
contacted by Mr. Barton, Worldwide Managing Director and CEO of McKinsey,
who encouraged Mr. Naumann to join McKinsey RTS over the course of several
in-person meetings and phone conversations beginning in the fall of 2013. Indeed,
Mr. Barton personally approved a special arrangement for Mr. Naumann to serve
as a director of both McKinsey and McKinsey RTS.
40. On or about September 24, 2013, Mr. Naumann exchanged e-mails
with Danielle Clarkson at McKinsey to schedule interviews with the leader of
McKinsey’s practice in Asia, with Jon Garcia, and with others. These interviews
took place on or about September 26 and 27, 2013 and October 15, 2013.
41. Mr. Naumann did not disclose his discussions with McKinsey, his
recruitment by Mr. Thompson, or his intent to join McKinsey RTS to AlixPartners
at any time prior to his resignation on December 12, 2013. As a result, Mr.
Naumann continued to be included in sensitive business and marketing
discussions, such as Asian and firm-wide Managing Director strategy calls as well
15
as introductions to valuable prospective clients, during the time he had this
undisclosed conflict-of-interest. Pursuant to the notice provision in his
Employment Agreement, Mr. Naumann remained employed for several months
after Mr. Thompson had left AlixPartners, purportedly to loyally complete his
services for the company, but actually affording him the opportunity to
misappropriate additional documents as detailed below.
42. Mr. Naumann’s scheme to misappropriate AlixPartners’ trade secrets
and other proprietary information began even before he resigned to join McKinsey
RTS. On September 27, 2013, Mr. Naumann sent two PowerPoint presentations to
the personal e-mail address of his brother and sister-in-law, Lorenz and Veronika
Naumann. These documents, titled “AlixPartners 2013 Asia Marketing Overview”
and “AlixPartners 2013 AFM Asia Marketing Presentation,” contain highly
confidential information regarding AlixPartners’ marketing efforts and strategy as
well as current engagements in Asia that would, like the other information
Naumann misappropriated, be useful to McKinsey RTS and harmful to
AlixPartners if disclosed to such a competitor.
43. Mr. Naumann tendered his resignation from AlixPartners on
December 12, 2013. His last day at AlixPartners was March 14, 2014. He is
expected to commence employment with McKinsey RTS as a senior leader of its
Asia practice on or about April 14, 2014.
16
44. After Mr. Naumann resigned, but while he was still working for
AlixPartners, he took advantage of his undisclosed conflict-of-interest and
continued to misappropriate confidential AlixPartners information, particularly in
the days leading up to his departure, by sending numerous highly sensitive
documents to his personal Yahoo e-mail address without Plaintiffs’ permission.
For example:
a. On December 24, 2013, Mr. Naumann forwarded to his personal
Yahoo e-mail account documents that he had sent to a client several
months earlier titled “Chief Restructuring Officer white paper_Asia”
and “CRO Role.” These documents describe the role of a CRO in a
distressed company.
b. On January 9, 2014, Mr. Naumann sent to his personal Yahoo account
an e-mail chain regarding draft proposals for AlixPartners’ highly
confidential and valuable pitch to a large prospective client. This e-
mail included an attached PowerPoint presentation. Mr. Naumann
forwarded this document to himself despite his having informed
AlixPartners’ management that, in light of his impending departure,
he would no longer be involved in pursuing this prospective client.
c. On January 12, 2014, Mr. Naumann forwarded to his personal Yahoo
e-mail account an Excel spreadsheet titled “Asia Contribution Reports
17
by Country-YTD Oct. & Full Year 9+3,” which Fred Crawford, the
Chief Executive Officer of AlixPartners, had sent to Mr. Naumann
with a note indicating that this document was confidential and not to
be shared. This document includes various AlixPartners revenue
parameters for multiple countries in Asia.
d. On that same day, Mr. Naumann sent himself a PowerPoint
presentation titled “2014 Budget Presentation – Turn 6 Asia MDA,”
which Mr. Crawford had sent to him on December 2, 2013, again with
a note that the document was confidential. This document
summarizes and reviews AlixPartners’ finances in Asia.
e. On January 13, 2014, Mr. Naumann sent to his Yahoo account an
Excel spreadsheet of revenue in Asia broken down by client, titled
“Revenue – Asia December 2013 USD$.”
f. On January 14, 2014, Mr. Naumann sent a PDF titled “AlixPartners –
Public Lenders Presentation – MD Share confidential January 2014,”
which contained AlixPartners’ confidential financial information to
his personal Yahoo account.
g. On January 19, 2014, Mr. Naumann forwarded to his Yahoo account
an e-mail from Mr. Crawford about AlixPartners’ performance in Asia
in 2013. The e-mail informs all AlixPartners Asia personnel of
18
updates on activities related to the Asia Business Unit, including Mr.
Naumann’s upcoming departure. It also includes AlixPartners’
strategy for 2014 in light of certain employee departures.
h. On January 20, 2014, Mr. Naumann forwarded to his personal Yahoo
account an e-mail from August 17, 2009 with third-party reports that
assess both his and AlixPartners’ entire Asia Operating Committee’s
professional skills.
i. On January 21, 2014, Mr. Naumann forwarded to his personal Yahoo
account two Excel spreadsheets sent to him by Gigi Chow at
AlixPartners on November 26, 2013. These were confidential copies
of the salary file for another AlixPartners’ employee, titled “SH
AdminASIA 2013,” and the salary and bonus file for AlixPartners’
consultants, titled “Ivo 26 Nov DRAFT Asia BU Compensation.”
j. On January 24, 2014, Mr. Naumann then sent to his Yahoo account an
e-mail from Florence Huang, the AlixPartners Marketing Director in
Asia, with a PDF titled “Asia Roundup Q4 2013,” which summarizes
all of AlixPartners’ engagements in Asia in the fourth quarter.
k. On February 4, 2014, Mr. Naumann sent to his Yahoo e-mail account
two additional sensitive AlixPartners documents. The first document
was a PowerPoint presentation titled “APLLP Top 10 Industry Profile
19
– (2011-2013)” that reviews and summarizes AlixPartners’ business
and revenue by industry. The second document was a PowerPoint
presentation titled “EI Strategy Plan v9,” which summarizes
AlixPartners’ Enterprise Improvement business and the strategy for
growing that business over the next several years.
l. On February 7, 2014, Mr. Naumann forwarded to his Yahoo e-mail
account a PDF document titled “China’s Changing Economy –
AlixPartners – Jan 2013.” This confidential document was prepared
internally at AlixPartners and Mr. Naumann did not have authority to
send it to anyone outside of AlixPartners.
m. On February 11, 2014, Mr. Naumann e-mailed to his personal Yahoo
account a PowerPoint presentation titled “2013 May AP Board
meeting Asia update v13 – June update” that Mr. Thompson had sent
to him in June 2013. This presentation contains detailed information
about revenues and other financials related to AlixPartners’ business
in Asia. This presentation also profiles each of AlixPartners’ offices
in Asia.
n. In a last minute and frantic effort to take documents during his final
days at AlixPartners, on March 13 and 14, 2014, Mr. Naumann again
forwarded to his personal Yahoo account several documents that he
20
had sent himself in previous months, including documents described
in paragraphs 44(d) and 44(f)-(g).
45. Each of the above documents was taken by Mr. Naumann without
permission, contains confidential or proprietary AlixPartners information, and
would cause competitive harm if released to or used by Mr. Naumann, McKinsey
or McKinsey RTS in competition with AlixPartners.
46. The circumstances surrounding Mr. Naumann’s misappropriation of
AlixPartners confidential information are highly suspicious and suggest that Mr.
Naumann stole the documents mentioned above with the intention of using them
for his own benefit and/or the benefit of McKinsey and McKinsey RTS. After Mr.
Naumann announced his resignation, Mr. Naumann sent to his personal Yahoo
account 15 separate e-mails that contained confidential AlixPartners documents:
one in December 2013, eight in January 2014, three in February 2014 and three in
March 2014. Indeed, Mr. Naumann appeared to be making a frantic effort to steal
whatever documents he could before he left AlixPartners; in March, he sent
himself three e-mails containing AlixPartners confidential information that he had
previously sent himself since announcing his resignation. And, given the highly
confidential nature of these documents, including documents containing revenue
and financial information that could specifically be used to compete with
AlixPartners, this evidence strongly supports the conclusion that Mr. Naumann
21
took these documents for the improper purpose of using them to benefit McKinsey
and McKinsey RTS.
47. Mr. Naumann can offer no justifiable explanation for the highly
suspicious frequency and timing with which he sent himself such a high volume of
sensitive and confidential AlixPartners documents. To the extent that Mr.
Naumann sought to access these documents for a legitimate purpose while working
remotely, AlixPartners provided every employee with a laptop and access to the
company’s Virtual Private Network (“VPN”) so that Mr. Naumann had no need to
e-mail documents to his personal account. Even if there were a need to e-mail
documents to himself—and there is not—the fact that AlixPartners provided Mr.
Naumann with a laptop eliminated any need to e-mail such documents outside of
the AlixPartners system because he could either access his web-based AlixPartners
e-mail account or save the documents to his hard drive. Moreover, many, if not all,
of these documents would not have been relevant or necessary for the work that
Mr. Naumann was performing for AlixPartners after he announced his resignation.
48. On March 17, 2014, Julie Severson sent Mr. Naumann a letter
reminding him of his continuing obligations to AlixPartners under his Employment
Agreement and the LLP Agreement, notifying him that AlixPartners knew he had
misappropriated documents and demanding that Mr. Naumann return all
misappropriated documents. See Exh. E.
22
Defendants Repeatedly Deny Wrongdoing yet Refuse to Cooperate; McKinsey Denies Knowledge
49. On March 25, 2014, Counsel for Mr. Thompson, Mr. Naumann and
McKinsey responded to Ms. Severson’s letters to Defendants acknowledging that
both Mr. Thompson and Mr. Naumann are in possession of AlixPartners
information, eventually offering the excuse that Mr. Thompson and Mr. Naumann
are “mobile senior executives,” as if this permits them to take and retain
confidential information without permission.
50. Given the volume of highly-sensitive documents taken by the
Defendants just prior to their departures, and their failure to provide a satisfactory
explanation for this highly suspicious conduct, AlixPartners asked that Defendants
immediately provide an inventory of all AlixPartners information they took,
explain what they did with the documents and information, and make their e-mail
accounts and electronic devices available for a narrowly-focused forensic
examination by a professional third party firm. AlixPartners also asked
Defendants to allow the third party forensic firm to supervise the deletion of
AlixPartners’ information from their accounts and devices after forensically correct
copies were made by the third party firm. Defendants continue to refuse to comply
with these reasonable requests.
51. AlixPartners also asked McKinsey to take appropriate steps to address
this situation. In response, McKinsey’s CEO, Mr. Barton, claimed that, while he
23
“expect[s] [Defendants] to honour their commitments,” he did “not know the
details of Eric’s and Ivo’s circumstances,” notwithstanding his personal
involvement in their recruitment as detailed above.
COUNT I (Breach of Employment Agreements)
52. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
53. Defendants’ Employment Agreements are valid and enforceable
contracts. Mr. Thompson’s Agreement is signed by Mr. Thompson and
AlixPartners Hong Kong. Mr. Naumann’s Agreement is signed by Mr. Naumann
and AlixPartners Shanghai.
54. Both during and after their employment with AlixPartners,
Defendants owed AlixPartners various contractual obligations pursuant to their
Employment Agreements.
55. Among other things, Mr. Thompson’s Employment Agreement
contains a Confidential Information provision, a Non-Compete clause, an
Employee Non-Solicit clause, and a Duty of Loyalty provision, as described above
in paragraphs 19-22. See Exh. B, §§ 3.2, 9.4, 11.2, 11.3.
56. Among other things, Mr. Naumann’s Employment Agreement
contains a Confidential and Proprietary Information provision, an Employee Non-
24
Solicit clause, a Client Non-Solicit clause and a Duty of Loyalty provision, as
described in paragraphs 32-36. See Exh. D, §§ 1.3, 6.2, 8.1.
57. Defendants breached the confidentiality provisions in their
Employment Agreements, see Exh. B. § 9.4 and Exh. D § 6.2, by misappropriating
confidential and proprietary information (as described in paragraphs 27, 28, 42 and
44) in order to use it for their benefit and for the benefit of McKinsey and
McKinsey RTS, a direct competitor of AlixPartners, without AlixPartners’
consent.
58. Defendant Thompson also breached his Employment Agreement by
encouraging Mr. Naumann to join McKinsey while still employed by AlixPartners,
in violation of his Duty of Loyalty and Employee Non-Solicit provisions. See Exh.
B §§ 3.2, 11.2.
59. Additionally, Defendant Thompson breached the Non-Compete
provision in his Employment Agreement, see Exh. B § 11.3, by undertaking
employment at McKinsey RTS, a direct competitor of AlixPartners in the
Restricted Area, while still prohibited from doing so under the terms of his
Agreement with AlixPartners. This breach was especially egregious in light of
Defendant Thompson’s misappropriation of confidential information, described
above.
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60. As a direct and proximate result of Defendants’ unlawful conduct,
AlixPartners has suffered and will continue to suffer irreparable harm, including,
but not limited to, financial injury, lost business opportunities, misuse of
confidential and proprietary information, loss of competitive business advantage
and loss of good will.
61. AlixPartners has no adequate remedy at law and is entitled to an
injunction.
COUNT II (Breach of LLP Agreement)
62. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
63. The LLP Agreement is a valid and enforceable contract signed by
both AlixPartners Holdings, LLP and Mr. Thompson and Mr. Naumann,
respectively.
64. In addition to their Employment Agreements, Defendants are also
parties to the LLP Agreement, which requires all Partners, including Mr.
Thompson and Mr. Naumann, to “keep confidential, and [] not disclose to any
third Person for use or its own benefit, without the consent of the Board, any non-
public information with respect to the Partnership[.]” Exh. A, § 15.3.
65. Defendants breached their obligations to AlixPartners pursuant to the
LLP Agreement by misappropriating confidential and proprietary information (for
26
instance, by forwarding confidential documents to their personal e-mail accounts
after they had begun serious discussions with McKinsey to join McKinsey RTS
and/or after they had notified AlixPartners of their resignations, as described in
paragraphs 27, 28, 42 and 44) with respect to the Partnership in order to use it for
their benefit and for the benefit of McKinsey and McKinsey RTS, a direct
competitor of AlixPartners, without Plaintiffs’ consent.
66. In signing the LLP Agreement, Defendants “confirm[ed] that damages
at Law would be an inadequate remedy for a breach or threatened breach of this
Agreement[,]” and that “in the event of a breach or threatened breach of any
provision hereof, the respective rights and obligations hereunder shall be
enforceable by specific performance, injunction or other equitable remedy, . . . as
well as at Law or otherwise[.]” Exh. A, § 15.11.
67. As a direct and proximate result of Defendants’ unlawful conduct,
AlixPartners has suffered and will continue to suffer irreparable harm, including,
but not limited to, financial injury, lost business opportunities, misuse of
confidential and proprietary information, loss of competitive business advantage
and loss of good will.
68. AlixPartners has no adequate remedy at law and is entitled to an
injunction.
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COUNT III (Misappropriation of Trade Secrets under the Delaware Trade Secrets Act, 6
Del. C. § 2001, et seq.)
69. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
70. AlixPartners has developed numerous methods, techniques, and
processes for conducting and marketing its consulting business that derive
independent economic value from not being generally known to others that might
use or disclose them for economic gain.
71. As evidenced in the PowerPoint presentations titled “AlixPartners
2013 Asia Marketing Overview” and “AlixPartners 2013 AFM Asia Marketing,”
AlixPartners has developed a specific marketing campaign strategy in Asia that
focuses on content, brand awareness, corporate targets and increased touch points.
72. As evidenced in the PowerPoint presentation titled “2010 China
Business Review Strategy Discussion,” AlixPartners has also developed unique
marketing strategies that combine general media outreach, case studies, public
speeches, client events and book launches.
73. As evidenced by the list of the extensive private equity contacts of
Lisa Donahue, AlixPartners has developed a trade secret in the compilation of this
valuable information regarding contacts and other lead sources in the restructuring
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market that is used in the continuous operation of AlixPartners’ turnaround and
restructuring business. This information gives AlixPartners the opportunity to gain
an advantage over competitors who do not know or have access to these same
contacts.
74. As evidenced by the PowerPoint presentation provided to a large
prospective client on January 9, 2014, AlixPartners has developed a trade secret in
the “Quickstrike” approach to review the current situation of the distressed
company and assess turnaround options.
75. As evidenced by the PowerPoint presentation titled “EI Strategy Plan
v9,” AlixPartners has developed a strategy of developing the Enterprise
Improvement business, including a greater focus on deliberate client development
and large and emerging high-potential industry groups, and changing the leverage
ratio at AlixPartners.
76. As evidenced by the PowerPoint Presentation titled “2013 May AP
Board meeting Asia update v13 – June update,” AlixPartners has also developed a
unique proprietary strategy for improving its business and increasing its revenues
in Asia, including strategic recruiting efforts and a specific focus on brand
awareness and expanded local client relationships.
77. As evidenced by the Excel spreadsheets titled “Revenue – Asia
November YTD 2012 $” and “Revenue – Asia December 2013 USD$,”
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AlixPartners has trade secrets in the compilation of confidential revenue analyses
of AlixPartners’ business in Asia, which informs AlixPartners’ business strategy
and which would be harmful if known outside of the company.
78. As evidenced by the Excel spreadsheet titled “12182012 Risk
Report,” AlixPartners also has a trade secret in sensitive financial reports regarding
receivables due from AlixPartners’ clients. This information is kept confidential
and remains unknown to competitors, who would have an advantage over
AlixPartners if they were to discover the information.
79. As evidenced by the Excel spreadsheet titled “Asia Contribution
Reports by Country-YTD Oct. & Full Year 9+3,” AlixPartners owns a trade secret
in the compilation of financial information and revenue parameters for its business
in multiples countries throughout Asia. Competitors are not privy to this
information and AlixPartners expends valuable time and effort in developing this
information and maintaining its secrecy.
80. As evidenced by the PowerPoint presentation titled “2013 Budget
Presentation – Turn 6 Asia MDA,” AlixPartners also owns a trade secret in the
compilation summary of the company’s financials in Asia as well as its strategy for
prioritizing business in the region. This information is valuable to the future of
AlixPartners endeavors and would harm AlixPartners if the information were
known to competitors.
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81. As evidenced by the document titled “AlixPartners – Public Lenders
Presentation – MD Share confidential January 2013,” AlixPartners also has a trade
secret in the compilation of financial and loan information organized for the
purpose of sharing exclusively with public lenders. This information is not easily
ascertainable and adds significant value to AlixPartners by allowing its executives
to properly manage and project company finances.
82. As evidenced by the Excel spreadsheets titled “SH AdminASIA
2013” and “Ivo 26 Nov DRAFT Asia BU Compensation,” AlixPartners has a trade
secret in the information related to its employees’ compensation, which is not
generally known to the public or its own employees, and is valuable to
AlixPartners and its recruiting, retention and planning efforts.
83. As evidenced by the PowerPoint presentation titled “APLLP Top 10
Industry Profile – (2011-2013),” AlixPartners owns a trade secret in the
compilation of information regarding industry segment breakdowns and industry
segment gross fees revenue analysis as it relates to AlixPartners’ business. This
information is highly valuable to AlixPartners as it informs the company’s business
strategy in various industries moving forward.
84. AlixPartners has taken reasonable measures to protect the secrecy of
all of its trade secret methods, techniques, processes and compilations, including
the documents detailed above. AlixPartners provides only minimum necessary
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rights and access only to employees with a need to know, protects its electronic
systems with passwords and requires its employees and partners to maintain
confidentiality of this information pursuant to AlixPartners policies, their
Employment Agreements and the LLP Agreement.
85. Defendants had specific and unique knowledge of many of
AlixPartners’ most valuable trade secrets for business strategies as well as of other
confidential and proprietary information, including those reflected in the
documents identified in paragraphs 27, 28, 42 and 44 above, which they
misappropriated. Both Mr. Thompson and Mr. Naumann were also aware that they
had obtained these valuable trade secrets in violation of the confidentiality
provisions in their Employment Agreements and the LLP Agreement.
86. Defendants willfully and maliciously misappropriated the trade
secrets described above given their knowledge of the sensitivity of the documents,
their duties to AlixPartners, and their intent to use them for the benefit of a
competitor.
87. Defendants have been unjustly enriched through the misappropriation
of AlixPartners’ trade secrets, including, but not limited to, confidential
information about AlixPartners’ marketing strategy and business leads in Asia that
they obtained in breach of their Employment Agreements, the LLP Agreement and
their fiduciary relationships.
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88. As a direct and proximate result of Defendants’ misappropriation of
its trade secrets, AlixPartners has suffered and will continue to suffer irreparable
harm, including, but not limited to, financial injury, lost business opportunities,
misuse of confidential and proprietary information, loss of competitive business
advantage and loss of good will.
89. AlixPartners has no adequate remedy at law. Accordingly,
AlixPartners is entitled to an injunction and other relief pursuant to 6 Del. C. §
2002.
COUNT IV (Breach of Fiduciary Duty under Delaware Law)
90. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
91. As Partners, both Mr. Thompson and Mr. Naumann owe AlixPartners
fiduciary obligations under Delaware common law, their Employment Agreements
and the LLP Agreement, including duties of loyalty; in their senior-level Managing
Director positions, Defendants regularly interacted with AlixPartners’ clients and
were entrusted with AlixPartners’ confidential and proprietary information as well
as trade secrets. Exh. A, § 15.3; Exh. B, §§ 3.2.2, 3.2.3, 3.2.4, 3.2.5, 9.4; Exh. D,
§§ 1.3.1, 1.3.2, 1.3.3, 6.2. They are also under continuing contractual obligations,
including post-employment restrictive covenants, to AlixPartners Hong Kong (Mr.
33
Thompson) and AlixPartners Shanghai (Mr. Naumann) pursuant to their
Employment Agreements. Exh. B, §§ 11.2, 11.3; Exh. D, § 8.1.
92. Additionally, because both Mr. Thompson and Mr. Naumann are
partners of AlixPartners Holdings, LLP, they are subject to continuing contractual
obligations pursuant to the LLP Agreement. Exh. A. § 15.3
93. Mr. Thompson breached his fiduciary Duty of Loyalty owed to
AlixPartners by encouraging Mr. Naumann to join McKinsey RTS while still
employed by AlixPartners.
94. Mr. Thompson and Mr. Naumann also breached their Duties of
Loyalty owed to AlixPartners by misappropriating the confidential and proprietary
information identified in paragraphs 27, 28, 42 and 44, above in order to use it for
their own benefit and the benefit of McKinsey and McKinsey RTS, a direct
competitor of AlixPartners.
95. In signing the LLP Agreement, Defendants “confirm[ed] that damages
at Law would be an inadequate remedy for a breach or threatened breach of this
Agreement[,]” and that “in the event of a breach or threatened breach of any
provision hereof, the respective rights and obligations hereunder shall be
enforceable by specific performance, injunction or other equitable remedy, . . . as
well as at Law or otherwise[.]” Exh. A, § 15.11.
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96. As a direct and proximate result of Defendants’ unlawful conduct,
AlixPartners has suffered and will continue to suffer irreparable harm, including,
but not limited to, financial injury, lost business opportunities, misuse of
confidential and proprietary information, loss of competitive business advantage
and loss of good will.
97. AlixPartners has no adequate remedy at law and is entitled to an
injunction.
COUNT V (Conversion under Delaware Law)
98. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
99. AlixPartners owns confidential and proprietary information (to the
extent any of the documents identified in paragraphs 27, 28, 42 and 44 above do
not rise to the level of a trade secret), and is legally entitled to possession of that
information and to the exclusive enjoyment of the benefits derived from its use.
100. Defendants took possession of AlixPartners’ confidential and
proprietary information, both before and after announcing their resignations, and
failed to return it to AlixPartners upon leaving the company and joining McKinsey
RTS. Defendants converted this confidential and proprietary information for their
own use and by positioning themselves to use this information for the benefit of
McKinsey RTS, one of AlixPartners’ significant competitors.
35
101. As a direct and proximate result of Defendants’ unlawful conduct,
AlixPartners has suffered and will continue to suffer irreparable harm, including,
but not limited to, financial injury, lost business opportunities, misuse of
confidential and proprietary information, loss of competitive business advantage
and loss of good will.
COUNT VI (Civil Conspiracy under Delaware Law)
102. AlixPartners repeats, realleges, and incorporates by reference each
and every allegation in the foregoing paragraphs as though fully set forth herein.
103. Defendants conspired with each other to breach the various duties and
obligations detailed above, to violate the Delaware Trade Secrets Act as set forth in
Count IV and to convert AlixPartners confidential and proprietary information as
set forth in Count V.
104. After meeting with Jon Garcia at McKinsey in anticipation of his own
future employment at McKinsey RTS, Mr. Thompson sent an e-mail to Mr. Garcia
on August 14, 2013, with a copy to Mr. Naumann, in which he indicated that Mr.
Naumann was also interested in joining McKinsey.
105. Mr. Thompson actively encouraged Mr. Naumann to leave
AlixPartners and to join McKinsey RTS.
106. Both Mr. Thompson and Mr. Naumann also assisted each other in
misappropriating AlixPartners’ confidential information and trade secrets. For
36
example, on October 10, 2013, in furtherance of Defendants’ plan to steal
AlixPartners’ trade secrets and other proprietary information for their own benefit
and the benefit of McKinsey RTS, Mr. Thompson sent Mr. Naumann a list of the
extensive private equity contacts of Lisa Donahue, the Global Leader of
AlixPartners’ Turnaround and Restructuring business. This document would aid
Mr. Thompson and Mr. Naumann in their joint effort to steal referral sources for
restructuring work on behalf of McKinsey RTS to the detriment of AlixPartners.
107. Despite their fiduciary duties under common law and statutory
obligations owed to Plaintiffs, their Employment Agreements and as Partners
under the LLP Agreements, Defendants thus conspired to encourage and assist one
another in breaching their fiduciary duties owed to AlixPartners.
108. As a direct and proximate result of Defendants’ unlawful conduct,
AlixPartners has been and continues to be irreparably and otherwise damaged.
PRAYER FOR RELIEF
WHEREFORE, based upon the foregoing, AlixPartners hereby respectfully
requests that the Court:
1. Declare that Defendants’ unauthorized conduct violates AlixPartners’
rights under Delaware common law, their Employment Agreements and the LLP
Agreement.
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2. Immediately and permanently enjoin Defendants and all others acting
in concert or participation with them from:
• using and/or disclosing AlixPartners’ trade secrets;
• using and/or disclosing AlixPartners’ confidential and proprietary information; and
• soliciting other AlixPartners’ employees in violation of existing restrictive covenants in their Employment Agreements for a period of 12 months after the date of this Order.
3. Immediately and permanently enjoin Defendant Thompson from
being employed or engaged by or otherwise assisting in or being interested in any
capacity in a business anywhere in the Restricted Area, as defined above, which is
in competition with the Business of AlixPartners, as defined above, including
McKinsey and McKinsey RTS, for a period of 12 months after the date of this
Order.
4. Order that Defendants provide an accounting to AlixPartners of any
and all AlixPartners trade secrets and other confidential and proprietary
information that has been used or disclosed to any person or entity;
5. Order that Defendants return all hard copies of AlixPartners trade
secrets and other confidential and proprietary information in their possession,
custody or control and make available all web-based e-mail accounts and personal
electronic devices on which such information resides to a third party firm to
perform a forensic examination of such e-mail accounts and devices, as well as to
38
supervise the deletion of any AlixPartners trade secrets and other confidential and
proprietary information found on such e-mail accounts and devices.
6. Order that Defendants account to AlixPartners for all gains, profits,
savings, and advantages unjustly obtained by Defendants as a result of their
wrongful actions;
7. Order that Defendants account to AlixPartners for a reasonable
royalty for their misappropriation of trade secrets;
8. Order that Defendants pay to AlixPartners all damages sustained by
AlixPartners arising from the foregoing acts of breach of Employment Agreement,
breach of LLP Agreement, misappropriation of trade secrets, breach of fiduciary
duty, civil conspiracy and conversion, plus interest as appropriate;
9. Award exemplary damages as authorized by the Delaware Trade
Secrets Act for the willful and malicious misappropriation of AlixPartners trade
secrets.
10. Award attorney’s fees pursuant to the Delaware Trade Secrets Act and
Defendant Naumann’s Employment Agreement. See Exh. D., § 8.2.
11. Award such other relief as the Court deems fair and equitable.
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Respectfully submitted, AlixPartners
OF COUNSEL: Jason C. Schwartz Greta B. Williams Amy Wolf Gibson, Dunn & Crutcher LLP 1050 Connecticut Avenue, N.W. Washington, DC 20036-5306 (202) 955-8242 Dated: April 9, 2014
/s/ Jennifer C. Jauffret Gregory P. Williams (#2168) Jennifer C. Jauffret (#3689) Lori A. Brewington (#4522) Richards Layton & Finger, P.A. 920 N. King Street Wilmington, Delaware 19801 (302) 651-7700 Attorneys for Plaintiffs AlixPartners, LLP, AlixPartners Holdings, LLP, AlixPartners (Shanghai) Business Advisory Services Limited and AlixPartners Hong Kong Limited
EFiled: Apr 09 2014 06:19PM EDT Transaction ID 55278563
Case No. 9523-