efiled: apr 09 2014 06:19pm edt transaction id 55278563...

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-

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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.

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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.

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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.

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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 &

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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.

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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

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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

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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

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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

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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.

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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.

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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

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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

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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.

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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

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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

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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

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– (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

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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

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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.

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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.

25

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)



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











injunction.

27

COUNT III (Misappropriation of Trade Secrets under the Delaware Trade Secrets Act, 6

Del. C. § 2001, et seq.)



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

28

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 $” and “Revenue – Asia December 2013 USD$,”

29

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.

30

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

31

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.

32

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)



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





34







injunction.

COUNT V (Conversion under Delaware Law)



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






COUNT VI (Civil Conspiracy under Delaware Law)



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.


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.

37

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.

39

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-

efiled: apr 09 2014 06:19pm edt transaction id 55278563...

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