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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

LAUREN GLASSMAN, :

:Plaintiff/ :

Counterclaim Defendant,::

vs. : Civil Action: No. 7717-VCG

CROSSFIT, INC., a Delaware :corporation, and GREG GLASSMAN, :

:Defendants/ :

Counterclaim Plaintiffs.:

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Chancery Court Chambers34 The CircleGeorgetown, DelawareTuesday, October 23, 20124:00 p.m.

- - -

BEFORE: HON. SAM GLASSCOCK, III, VICE CHANCELLOR

- - -

TELECONFERENCE-MOTION TO SET A SCHEDULE

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------------------------------------------------------

CHANCERY COURT REPORTERS410 Federal Street

Dover, Delaware 19901(302) 739-3934

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1 APPEARANCES:(By telephone):

2PHILIP J. TRAINER, JR., ESQ.

3 TONI-ANN PLATIA, ESQ.Ashby & Geddes, P.A.

4 -and-GRACE Y. PARK, ESQ.

5 of the California barBergeson, LLP

6 for Plaintiff/Counterclaim Defendant

7

8

9 RAYMOND J. DiCAMILLO, ESQ.KEVIN M. GALLAGHER, ESQ.

10 Richards, Layton & Finger, P.A.-and-

11 BLAIR G. CONNELLY, ESQ.of the New York bar

12 Latham & Watkins LLPfor Defendant/Counterclaim Plaintiff

13

14 BRIAN C. RALSTON, ESQ.J. MATTHEW BELGER, ESQ.

15 Potter, Anderson & Corroon LLP-and-

16 ANGELA L. DUNNING, ESQ.of the California bar

17 Cooley LLPfor Third Party Anthos Capital L.P.

18

19 CURTIS S. MILLER, ESQ.Morris, Nichols, Arsht & Tunnell LLP

20 -and-STEVEN A. LEVY, ESQ.

21 of the Illinois barGoldberg Kohn LTD.

22 for Non-party WTAS, LLC

23 - - -

24

CHANCERY COURT REPORTERS

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1 THE COURT: Good afternoon. This is

2 Sam Glasscock. Who do I have on the line please?

3 MR. TRAINER: Good afternoon, Your

4 Honor. For plaintiff, Lee Trainer and Toni-Ann Platia

5 at Ashby & Geddes. I also have on the line Grace Park

6 from Bergeson, LLP.

7 THE COURT: Thank you, Mr. Trainer.

8 MR. DiCAMILLO: Good afternoon, Your

9 Honor. For defendants, Ray DiCamillo. Also on the

10 line with me are Kevin Gallagher from my office and

11 Blair Connelly of Latham & Watkins.

12 THE COURT: Welcome all.

13 Do I have Mr. Ralston on the line?

14 MR. RALSTON: You do, Your Honor. I

15 was just about to introduce myself and my colleague,

16 Matt Belger from my firm on behalf of Anthos, and also

17 with me on the line is Angela Dunning from Cooley.

18 THE COURT: All right. Welcome all.

19 MS. DUNNING: Good afternoon, Your

20 Honor.

21 THE COURT: We have several motions

22 outstanding, but I think I'd like to start with

23 Anthos' request for me to hold in abeyance enforcement

24 of my order with respect to the motion to compel to


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1 consider the common interest doctrine by Anthos. I'll

2 hear from whoever is going to speak, Mr. Ralston, on

3 behalf of Anthos.

4 MR. MILLER: Your Honor, I am sorry to

5 interrupt, but just for the record, you have Curtis

6 Miller and Steve Levy on the line as well. We

7 represent WTAS.

8 THE COURT: Welcome. Glad you spoke

9 up.

10 MS. DUNNING: Your Honor, this is

11 Angela Dunning from Cooley. With your indulgence,

12 I'll be arguing for Anthos.

13 The request that we submitted to Your

14 Honor last week really has narrowed down to 13

15 documents. We were able to look at the documents

16 withheld on privileged grounds by Miss Glassman, by

17 plaintiff, where Anthos was involved in the

18 communication, and there are really only 13 documents

19 that we expect to assert privilege over in connection

20 with our own production which is ongoing.

21 Those 13 documents I think, and

22 withholding of those 13 documents, is fully consistent

23 with the very helpful order that the Court entered

24 with respect to the motion to compel against plaintiff


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1 insofar as we have restricted that request to only

2 those documents that specifically entail discussion of

3 common legal strategy with respect to the claims that

4 defendants have filed both against plaintiffs in

5 Delaware and against Anthos in California.

6 As I think the Court knows, the breach

7 of fiduciary duty claims against Miss Glassman are

8 filed in Delaware. Aiding and abetting, those claims,

9 and a variety of other claims based on the provision

10 of documents to Anthos, are what informs the claims in

11 California. So they are really the flip side of

12 precisely the same claim.

13 And there have been limited

14 communications between counsel for Anthos and

15 plaintiff with respect to how to defend against those

16 claims in a way that preserves the common interest of

17 both parties. And then there have been some

18 discussions of the parties' potential claims against

19 defendants arising out of that litigation.

20 Those kinds of issues are precisely

21 what's referenced in the Court's decision when it said

22 that even defendants concede that those sorts of

23 documents are subject to the common interest doctrine.

24 So it's really 13 documents, Your Honor.


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1 THE COURT: When will that issue, from

2 Anthos' point of view, be presented to the Court for

3 decision?

4 MS. DUNNING: Well, Your Honor, Anthos

5 filed its opposition to the motion to compel

6 yesterday, so its briefing on this has been submitted.

7 I don't know when defendants are planning to submit

8 their reply, but I expect that will be this week, at

9 which point it will be ready for decision by Your

10 Honor.

11 At the same time, Anthos is moving as

12 quickly and diligently as possible to complete its own

13 document review and to provide a privilege log to

14 defendants, and we are hopeful and anticipate that

15 that will be done within the next week, or by the end

16 of the month. But it's a significant undertaking, and

17 we're doing the best we can on that.

18 THE COURT: Let me ask you this. The

19 purchase agreement with Miss Glassman expires at the

20 end of the year, correct, December 31st?

21 MS. DUNNING: Yes, Your Honor.

22 THE COURT: Is that a hard deadline,

23 or is that a deadline that could be amended?

24 MS. DUNNING: At this point, Your


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1 Honor, it's a hard deadline. The parties have that

2 deadline written into their agreement, and I certainly

3 have no authority to suggest that it is subject to

4 modification.

5 I think everybody in the case, as I

6 understand it, is working very hard to get these

7 matters fully briefed and presented to the Court so it

8 will be able to reach a decision before the end of the

9 year.

10 THE COURT: All right. Fair enough.

11 Thank you.

12 Mr. DiCamillo, who is going to argue

13 on behalf of Greg Glassman and the company?

14 MR. DiCAMILLO: Your Honor, I will.

15 Mr. Connelly may need to jump in to the extent

16 necessary, but I'm going to take the lead.

17 THE COURT: All right.

18 MR. DiCAMILLO: With respect to

19 Anthos' request that Your Honor's recent memorandum

20 opinion be held in abeyance, we think that request

21 should be denied.

22 As Your Honor is well aware, we filed

23 our motion to compel against plaintiff on August 31st.

24 It is now October 23rd, and we still have not received


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1 all the documents that we are entitled to.

2 During the briefing on our motion to

3 compel against plaintiff, Your Honor indicated that

4 you wanted to hear argument on the motion to compel

5 against Anthos at the same time. We asked Your Honor

6 not to do that, not to wait, and to consider our

7 motion to compel against Miss Glassman first since the

8 issue had been outstanding for so long and had been

9 the subject of about five briefs and two arguments.

10 Your Honor granted that request.

11 Plaintiff did not oppose that request, and Anthos did

12 not oppose that request. Anthos is no stranger to

13 this proceeding or any of the activities that are

14 going on.

15 During the discussions about the

16 briefing, Anthos was well aware of the briefing

17 schedule. Anthos was well aware of our requests and

18 our motion against Miss Glassman and it was considered

19 first, and we attached some emails to my letter from

20 last week indicating that they thought it was a good

21 idea to wait and have Miss Glassman's motion heard

22 first because that might be helpful in narrowing the

23 issues with respect to the motion to compel against

24 Anthos.


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1 Plaintiff never asked that anything be

2 held in abeyance. Your Honor ruled last week that we

3 were entitled to all of the documents that we had

4 requested. There was no exception to that. There was

5 no carveout. There is no saying, "Well, if you only

6 withhold 13, you don't have to produce all of them."

7 Your Honor ordered Miss Glassman to

8 produce all of the documents that were at issue. She

9 has not done that.

10 As Your Honor knows, we filed a motion

11 for contempt, and that is not fully briefed yet, and I

12 won't argue it, but the reality is they have not

13 provided the documents that Your Honor required them

14 to produce, and there is no reason that Your Honor's

15 order should be held in abeyance. They are simply

16 looking for another chance.

17 Miss Glassman had plenty of

18 opportunity to make any arguments that she wanted to

19 in opposition to the motion to compel. She did,

20 filing several briefs, making several arguments.

21 Miss Glassman is now not happy with Your Honor's

22 order, and Miss Glassman and Anthos are taking the

23 opportunity to try to reargue the motion even though

24 they say they are not going to.


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1 The same with respect to Anthos.

2 Anthos could have intervened at any time. Anthos

3 could have said, "No, I want to file my brief quickly,

4 I want this heard all at the same time so that nobody

5 is prejudiced." They didn't do that. They acquiesced

6 in our position that Miss Glassman's motion should be

7 heard first. They all should have to live with the

8 consequences of that.

9 As Your Honor is aware, there's also

10 issues about -- we filed a motion to push this trial

11 back essentially just a week which we think is really

12 necessary. But we've got to get started on this case,

13 whether it's going to be tried on November 26th or

14 December 3rd as we requested, and we're still waiting

15 for documents from Miss Glassman.

16 Anthos says they're working hard to

17 get those documents, and I don't doubt that they are

18 working hard, but they're saying that we're not going

19 to get documents until the end of October. We don't

20 have a privilege log yet. The motion against Anthos

21 is not fully brief.

22 They filed their opposition yesterday.

23 We intend to file a reply tomorrow. I don't know when

24 Your Honor would be available to hear it, but we still


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1 don't have a log from them. So I don't know that Your

2 Honor is going to be able to even consider that fully

3 until we have that.

4 So, for all those reasons, we think

5 it's inappropriate that the order be held in abeyance,

6 and we think Your Honor should deny that request and

7 order Miss Glassman to produce the 13 documents that

8 she's withholding.

9 THE COURT: When will the rest of the

10 third-party briefing be finished, Mr. DiCamillo?

11 MR. DiCAMILLO: I believe we can get

12 it all finished -- we're going to try to file as much

13 as we can tomorrow. As Your Honor is aware, there's a

14 number of things outstanding, but I don't see any

15 reason why everything can't be fully briefed this

16 week. I'd ask Mr. Connelly to correct me if I'm wrong

17 about that.

18 MR. CONNELLY: That is correct.


20 Mr. Miller, is that your understanding

21 as well, that -- you'll have to fill me in on whether

22 your response has been filed because I can't remember.

23 MR. MILLER: I'm sorry. I didn't hear

24 you, Your Honor.


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1 Yes. For the record, Curtis Miller

2 from Morris Nichols on behalf of WTAS.

3 We did file our response to the motion

4 to compel on the 18th, last Thursday. I think I

5 understood and heard Mr. DiCamillo say that they

6 believe they're going to be filing a reply tomorrow,

7 and at that point, I think it would be fully briefed,

8 Your Honor. I can provide you with more background if

9 you'd like, but that's what I believe the schedule is.

10 THE COURT: I think that's sufficient.

11 I'm looking for a date now, counsel,

12 to set argument on those outstanding motions. I'm

13 assuming we're talking about the week of the 29th of

14 October, is that correct?

15 MR. DiCAMILLO: I think that makes

16 sense, Your Honor.

17 MS. DUNNING: Your Honor, that's fine

18 from Anthos' perspective. I do have a couple of

19 points I'd like to clarify if it would be helpful to

20 Your Honor in terms of what Mr. DiCamillo said, but

21 I'll wait until you're ready for that.

22 THE COURT: I'm happy to listen to

23 you, but let's get this scheduled. How about Tuesday

24 the 30th at 10:00.


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1 MR. TRAINER: That's fine for

2 plaintiff, Your Honor.

3 MR. DiCAMILLO: Fine for defendants,

4 Your Honor.

5 MR. MILLER: That works for WTAS as

6 well, Your Honor.

7 MS. DUNNING: And for Anthos.


9 Now, you can go ahead and make

10 whatever points you wish.

11 MS. DUNNING: Thank you, Your Honor.

12 I guess I just want to respond to a

13 few points very briefly. The first is the defendants

14 have stated absolutely zero harm that they would

15 suffer by allowing plaintiff to withhold the 13

16 documents for a very limited additional period of

17 time. These are documents, again, that they have

18 already conceded fall within the common interest

19 privilege.

20 On the flip side of that, you have

21 Anthos' truly substantial rights and privileged

22 communications over which its right to withhold is

23 currently pending before the Court.

24 I guess the only other point I wanted


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1 to add, Your Honor, is Anthos did not acquiesce to the

2 order. We were first alerted by defendants to their

3 motion to compel against Anthos on the 8th of October,

4 after Your Honor had already heard the motion to

5 compel as to Miss Glassman.

6 The motion as to Anthos was filed in

7 September, but we were never served with it until the

8 10th, and by that point, Your Honor had already held

9 the final hearing and the decision was due only two

10 days later. So there was no opportunity at that point

11 to intervene. Nor had we had a chance to see the

12 documents that were at issue in order to express our

13 views on that.

14 So we moved quickly once we were

15 alerted that all of these matters were proceeding, and

16 I guess I just again want to reiterate we're talking

17 about 13 documents over which Anthos expects to assert

18 privilege.

19 Those are the same documents in

20 Anthos' possession, and in light of the last paragraph

21 of Your Honor's decision in which, in our view, it was

22 made very clear that the motion was not intended --

23 that the decision was not intended to prejudice

24 Anthos' argument in the motion to compel which


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1 defendants asked to be briefed separately, that

2 withholding those 13 documents is a really reasonable

3 solution to allow all parties to have their fair day

4 in court.

5 THE COURT: All right. Is there any

6 objection on your part or on your client's part to

7 moving this trial until the 5th and 6th of December?

8 MS. DUNNING: Your Honor, for Anthos,

9 we'll make ourselves available whenever the parties

10 and the Court decides that trial is appropriate.


12 Mr. DiCamillo, does that suit you?

13 MR. DiCAMILLO: It suits defendants,

14 Your Honor.

15 THE COURT: We're going to move trial

16 to Georgetown the 5th and 6th of December.

17 Let me turn to the 13 documents. I

18 tried to make it clear in my opinion that I was not

19 making a decision on those documents to which

20 privilege might be asserted by Anthos.

21 I don't think Miss Glassman has any

22 basis to withhold the documents for her own purposes.

23 However, I think it was appropriate that they be

24 withheld. I tried to get counsel on the phone on the


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1 Friday that the request was filed to tell you to

2 withhold them and that I would consider them in due

3 course. I was unable to do that. But I think it's

4 appropriate that those documents be withheld.

5 I expect that Anthos should be in a

6 position to make whatever arguments it's going to make

7 on those when we get together next week to argue on

8 the broader motions to compel. Is that right?

9 MS. DUNNING: Yes, Your Honor.

10 THE COURT: So that takes care of that

11 issue. I'm going to allow those 13 documents to be

12 withheld.

13 I don't need any more briefing on the

14 contempt motion because I don't find that the actions

15 of Miss Glassman amounted to contempt. I have read

16 the opening papers, and I am convinced that whatever

17 the failings of the motion practice and discovery

18 practice in this case, they don't rise to sanctionable

19 contempt.

20 Is there anything else we can do here

21 this afternoon?

22 MR. DiCAMILLO: Your Honor, can I just

23 ask two questions please?

24 THE COURT: Sure.


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1 MR. DiCAMILLO: Number one, the

2 argument next Tuesday, is that going to be on the

3 phone or in person?

4 THE COURT: On the phone.

5 MR. DiCAMILLO: And the second,

6 following up on your colloquy with Miss Dunning, are

7 they going to be presenting all their arguments? Do I

8 take that to mean that we need to get a privilege log

9 before then?

10 THE COURT: Well, I would hope there

11 would be a privilege log created.

12 Miss Dunning, are you going to be in a

13 position to have a privilege log?

14 MS. DUNNING: Your Honor, that is my

15 hope; that we would be able to get it in. I had said

16 the 31st, but we will do everything we can in our

17 power to get it in by the 30th.

18 My understanding, based on

19 communications between the parties and what I have

20 seen in terms of numbers, is that the number of

21 documents Anthos, the third party has been looking at,

22 substantially eclipses anything the parties have

23 actually exchanged.

24 So we're doing our best, and I will


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1 make sure that we have whatever has been reviewed

2 logged and provided to the other side by that point.

3 I can't guarantee that there won't be some additional

4 documents that are discovered and produced thereafter

5 and some documents withheld on privilege.

6 THE COURT: Do the best you can. My

7 ruling was with respect to the 13 documents. I expect

8 to make a decision on the 13 documents. I'm going to

9 ask that those be provided to me in chambers

10 beforehand, Miss Dunning.

11 MS. DUNNING: Okay.

12 THE COURT: I'm going to get that

13 issue out of the way. We will do as much as we can on

14 the motions to compel. I am going to decide them as

15 quickly as I can in principle if I can't do it in

16 specific. We'll work that out.

17 But we're running very short of time,

18 and this matter is going to go forward now in early

19 December, and you're going to have a decision by the

20 end of the year. So we're going to have to all

21 accommodate our schedules to that.

22 MS. DUNNING: Understood.

23 THE COURT: Thank you.

24 Anything else we can do this


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1 afternoon?

2 MR. TRAINER: Not for plaintiff, Your

3 Honor. Thank you.

4 MR. DiCAMILLO: Nothing from

5 defendants, Your Honor.


7 MS. DUNNING: Thank you very much,

8 Your Honor.

9 MR. MILLER: Nothing from us, Your

10 Honor.

11 THE COURT: I appreciate everyone's

12 attention, and I look forward to talking to you very

13 soon. Thank you very much.

14

15 (The teleconference concluded at

16 4:20 p.m.)

17

18 -----

19

20

21

22

23

24


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CERTIFICATE

I, MAUREEN M. McCAFFERY, Official Court

Reporter of the Chancery Court, State of Delaware, do

hereby certify that the foregoing pages numbered

3 through 19 contain a true and correct transcription

of the proceedings as stenographically reported by

me at the teleconference in the above cause before the

Vice Chancellor of the State of Delaware, on the date

therein indicated.

IN WITNESS WHEREOF, I have

hereunto set my hand at Dover, this 25th day of

October, 2012.

/s/Maureen M. McCaffery----------------------------

Maureen M. McCafferyOfficial Court Reporterof the Chancery CourtState of Delaware


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