EFiled: Jan 29 2010 2:30P Transaction ID

IN THE COURT OF CHANCERY OF THE

EFiled: Jan 29 2010 2:30P

Transaction ID 29296568Case No. 3718-VCP

STATE OF DELAWARE

GREAT AMERICAN OPPORTUNITIES, INC., )

Plaintiff,

v.



ivil Action No. 3718-VCP

CHERRYDALE FUNDRAISING, LLC, n/k/aELADYRREHC, L.L.C. and DREWMCMANIGLE, IN HIS SOLE AND LIMITEDCAPACITY AS THE ASSIGNEE FOR THEBENEFIT OF ELADYRREHC, L.L.C.,

Defendants.

MEMORANDUM OPINION

Submitted: September 11, 2009



Decided: January 29, 2010

Sean J. Bellew, Esquire, David A. Felice, Esquire, BALLARD SPAHR LLP,

Wilmington, Delaware;

Attorneys for Plaintiff Great American Opportunities, Inc.

Raymond J. DiCamillo, Esquire, Margot F. Alicks, Esquire, RICHARDS, LAYTON &

FINGER, P.A., Wilmington, Delaware;

Attorneys for Defendant Drew McManigle as

Assignee of Eladyrrehc, LLC f/k/a Cherrydale Fundraising, LLC

PARSONS, Vice Chancellor.

This action focuses on events that occurred in the months before and after the

acquisition of substantially all assets of Kathryn Beich, Inc. ("KB") by Great American

Opportunities, Inc. ("Great American"). The case involves two claims made by Great

American against a third company, Cherrydale Fundraising, LLC ("Cherrydale"): First,that Cherrydale tortiously interfered with Great American's contractual and prospective

business relationships with certain of its employees and customers; and second, that

Cherrydale willfully and maliciously misappropriated Great American's trade secrets.

On May 16, 2008, I entered a Preliminary Injunction prohibiting Cherrydale from

engaging in much of the activity challenged in the Complaint. That Preliminary

Injunction remains in effect.

The case has now been tried on the merits and is before me based on the parties'

post-trial briefs and oral argument. For the reasons stated in this Opinion, I find that anumber of poor decisions were made and wrongful actions were performed by people

working as Cherrydale's agents and are attributable to Cherrydale. Thus, I hold that

Cherrydale tortiously interfered with Great American's contractual relationships as to

three former KB employees by enticing or encouraging them to breach several provisions

in their employment contracts. Additionally, I hold that Cherrydale willfully and

maliciously misappropriated certain of KB's trade secrets.Despite Cherrydale's proven wrongdoing, however, Great American largely failed

to meet its burden of proof as to damages. Although Great American sought

compensation damages for its actual losses in excess of $1 million, it failed to prove that

aspect of its claim. Rather, the only compensatory damages the record supports are based

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on the degree of Cherrydale's unjust enrichment. Those damages total $61,538. In

addition, because Cherrydale willfully and maliciously misappropriated Great

American's trade secrets, I award Great American an additional $61,538 in exemplarydamages and one half of its reasonable attorneys' fees incurred in connection with this

litigation.

Finally, in regard to Great American's motion to hold Cherrydale in contempt of

the Preliminary Injunction based on actions its agents took in May 2008, I find

Cherrydale liable for contempt and, as a result, award Great American all of its attorneys'fees and expenses it incurred in prosecuting its motion for contempt.

I

ACTUAL BACKGROUND

A.



he Parties

Plaintiff, Great American, is a Tennessee corporation with its principal place of

business in Nashville, Tennessee. Defendant, Cherrydale, is a Delaware limited liabilitycompany with its principal place of business in Allentown, Pennsylvania. This case also

relates to KB, a now defunct, nonparty Delaware corporation which had its principal

place of business in Illinois.

At the time of the events giving rise to this case, Great American, Cherrydale, and

KB competed with one another in the product and service-based fundraising industry.

Generally, participants in the fundraising industry market and distribute products and

services to nonprofit organizations including schools, student clubs, Parent Teacher

Associations (PTAs), church groups, and civic organizations. These groups, in turn,

resell the products to raise money for events and activities. Great American, Cherrydale,

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