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This is a long piece, but worth reading to understand how the rule of law is now seriously flawed by the inequities of a failed system. Even in little Delaware this growing disease now pervades our society through cronyism, favors, and improprieties I have been writing often about the TransPerfect Global case which has received national attention because of the controversial rulings made by Chief Chancellor Andre Bouchard. I have been extremely critical of the Chancellor in the way he has handled this case for many reasons, even suggesting perhaps he should be removed from the bench. I have read every public court document in detail about this case and interviewed objective lawyers and employees of the company. I know everything about this case. Here are the undisputed facts: TransPerfect is a translation company founded by Phillip Shawe and Elizabeth Elting that is incorporated in Delaware. Shawe owns 49%, Elting owns 50 %, and Shawe’s mother owns 1%. Despite any differences, Elting and Shawe moved past their failed romance, and from a dorm room, created a multinational company successful beyond imagination. Regardless of these differences, the company has been high growth, extremely successful, and extremely profitable (due primarily to Phillip Shawe’s leadership and innovation) each year, over the past 24 years. The company now has revenues of over $500 million per year, and employs 4000 people, from 90 offices world-wide. Elizabeth Elting decided she wanted to exit the company, and wants the whole company sold. Why? Because half of the whole company price — is worth considerably more than what Elting could sell her own stake for. In other words, Elting makes much more money if she can force Shawe to exit the business at the same time that she does. The problem is, Shawe doesn’t want to sell. Shawe loves his company, his stock is private property, and he doesn’t want to sell it. Even if the dramatics described in Bouchard’s romance novel decision were true (which they are not), the Court simply should not be forcing one person (two in this case, Phil and his Mom) to sell their shares involuntarily, just to enrich Elizabeth Elting within her timetable. The Court is not meant to insert itself and act as the buy/sell mechanism for Ms. Elting’s personal agenda. Further, Elting is no woman of virtue. Not one single, unpaid non-party witness took the stand for Elting. She supposedly does something at this 4000 person company, but yet no one I’ve talked to can speak to any contributions she has made. Again, Elting could not produce one single, fact witness, beyond her own self-serving story. In the past few years, Elting removed millions of dollars from the company in unauthorized cash distributions to buy lavish houses and other assets — over Shawe’s objection. Now, Chancellor Bouchard not only ordered the company to be forced to be sold and auctioned off — a result unprecedented in U.S. history, but the madness that is Bouchard doesn’t stop there. He has also now ordered sanctions of $7.1 million dollars against Shawe, the man who built the company, in favor of Elting. I can’t say for sure, but my research indicates no other sanction levied against an individual has been this high in U.S. history. Included in this ungodly sum is $1.4 million dollars awarded in legal fees to Kevin Shannon (Elting’s lawyer) who was not even made to show his bills to prove it. The law only allows for “reasonable” fees? How can the “reasonableness” of Shannon’s fees be judged if they are hidden? The bottom line is that I believe that Chancellor Bouchard, according to my legal experts has ruled incorrectly in virtually every aspect of the case, he has overreached his judicial authority, and he has abandoned his duty and his ethics. Bouchard is guilty of perpetrating extreme bias against Phillip Shawe in favor of Elizabeth Elting. All this being said, I ask the following questions to my 6000 readers: 1) If a Delaware Judge violates his judicial authority and that of the judicial canons directing judicial ethics and behavior under the law, what do you think should happen to that judge? 2) If a Delaware judge blatantly exhibits bias in a case, prevents relevant evidence from being presented, is guilty of improprieties and cronyism, and denigrates the respect that the Court should maintain by his actions, should that judge remain on the bench? Here is what I do know: The Delaware business law is clear about what constitutes the forcing of the sale of a company by the Chancery Court. First, there must be evidence of irreparable harm. TransPerfect Global makes 500 million a year and is extremely profitable. The employees love and admire Phillip Shawe (as per affidavits), feel they have a stake in the company, and they do not want it to be sold. Where is the irreparable harm Chancellor? The law does not even permit you take control of 2 shareholder company unless it is facing irreparable harm, and folks, TransPerfect has 3 stockholders. This being said, it appears that Chancellor Bouchard has erred in his creative ruling, possibly costing thousands of people their jobs, creating the risk of Delaware’s corporate franchise being denigrated, and possibly costing Delaware millions of dollars. Chancellor Andre Bouchard is a personal friend and former business associate of Kevin Shannon of the law firm Potter Anderson (Elting’s Delaware attorney). They worked together 20 years ago on the famous Disney case in the Chancery Court, and have been buddies ever since. During the decision stage of the TransPerfect trial, Bouchard and Shannon made a public appearance together in New Orleans. None of this was ever disclosed by Bouchard. This case is a textbook example of the “appearance of an impropriety” and Bouchard should have recused himself long ago. This issue unto itself presents serious problems under the law. Heard enough? The coincidences just keep mounting against the new judge. Chancellor Bouchard has appointed a Custodian (with unlimited authority) to run the company named Robert Pincus, another friend and former associate. Pincus receives an on-going amount of $1400 an hour! He has unnecessarily hired expensive consultant friends, and together they’ve run up an $8 million tab — all paid for by TransPerfect – and the expenses mount daily. Additionally, Pincus has created a “reign of terror in the company,” threatening job termination for employees who would speak against the case, been given judicial authority to seize employee private cell phones and computer e-mails—on pain of sanctions or termination—all clear violations of the First and Fourth Amendments of the Constitution. One brave employee has filed suit against Bouchard and Pincus in US Federal Court. If he wins this case, I believe Bouchard will be culpable. In his July ruling on sanctions, Bouchard stated that Shawe had broken into Elting’s office, copied e-mails, destroyed his cell phone records, and lied under oath justifying the sanctions in the amount of $7.1 million dollars. The ruling paints an extremely negative portrait of Phillip Shawe, however the real story has been hidden and prevented from being presented as evidence in court by Chancellor Bouchard. The Employee Handbook (and New York and Delaware Law) clearly gave Shawe the right to investigate any suspicion of fraud or funds being illegitimately removed from the company by any person, including Elting.   Here is the official statement from Shawe’s attorneys, which was published in several media outlets:   

“In my opinion the sanctions decision itself is indicia of an extreme court bias against Mr. Shawe. Although Mr. Shawe was given notice on particular grounds, the court permitted Elting’s team to change its theory at trial without proper notice because Elting had insufficient evidence of the issue they had sought to sanction Mr. Shawe for: alleged spoliation? The “evidence” against Mr. Shawe on spoliation was almost exclusively based on lawyers’ arguments (not evidence by definition in any court) and a cherry-picked paid “expert” witness who had never testified before in a U.S. Court. The truth of the matter is that Mr. Shawe provided more discovery than Elting produced, and her legal team could not identify a single document that allegedly had been destroyed or withheld and caused her “prejudice.” In fact, she claimed victory on the merits. Indeed, after the merits trial, Elting’s “expert” admitted that his findings used as a basis for filing the sanctions motion were untrue, because he had not investigated the issue well enough before Eltings’ team made the allegation. Faced with this deficit of evidence, Elting’s lawyers appeared at the sanctions trial with a new theory of “lying” which had never been raised before. Shawe was tried and sanctioned for allegedly “lying” without due process.


As a consequence, it is neither surprising (i) that the court did not find the deletion of relevant evidence nor (ii) that Mr. Shawe’s attorneys were not adequately prepared to defend him against the variance in trial theory. Such unfairness is not consistent with due process. Had they been given notice of the new “lying” theory (including what issues he allegedly lied about and when), it is likely that Mr. Shawe’s lawyers could have prepared and presented evidence demonstrating that the differences in recollection were nothing more than just that – with other disclosures in the record that make them immaterial.

The recent ruling on the amount of sanctions to be paid is more of the same from the Chancellor. Although the court did reduce the fees in some instances, it utterly failed to provide due process with respect to the reasonableness of many of the fees claimed. The most extreme example of this failure is the acceptance of more than $1.4 million in merits fees from the Potter firm based on the affidavit of Mr. Shannon without any actual billing descriptions to back up the claim. It begs the question: How can the reasonableness of fees be assessed if the court doesn’t even know what was done? It also lends some weight to the speculation by others that there is a reported personal and professional relationship between Mr. Shannon and the court which may be affecting this case. Regardless, accepting more than $1 million in fee claims without requiring backup is contrary to traditional notions of fairness. Mr. Shawe is considering his appellate options.

There also have been other indicia of court bias against Mr. Shawe. During the merits trial, the Court had to address Elting’s allegations of wrongdoing leveled against Mr. Shawe relating to his review of her emails on the public company server. Mr. Shawe asserted that the emails proved that Elting committed fraud and requested that Chancellor Bouchard examine the emails in camera (in private) because they proved fraud. The court was well aware that if fraud was found, it would remove the emails from any supposed claim of “privilege” (under the crime-fraud exception), but Chancellor Bouchard inexplicably refused to review them – yielding to Elting’s position with no basis in law. Chancellor Bouchard abandoned his sworn duty to equity and justice in this regard. Instead, without consideration of the content, for the purpose of the merits case he suppressed the very emails which may prove that Elting and her attorneys engaged in a scheme to provoke Mr. Shawe and create actionable discord in the company. These and other indicia of bias (such as the remarkable success rate of Elting’s team on all motions – which her attorneys bragged about (in a Law360 article) are particularly concerning, given the recent unsolicited and inappropriate negative public statement by Vice Chancellor J. Travis Laster which was directed at the free speech activities of Transperfect employees who have been appealing to the media and the public. It is the duty of judges and lawyers to avoid the appearance of impropriety and this unprecedented instance of one sitting judge commenting on the active case of another may not be consistent with that mandate – especially when it may be interpreted as an attempt to quell first amendment rights.

At this point, the case has been certified for interlocutory appeal, and I am confident that the Delaware Supreme Court will reverse both the sale order and sanctions order based on the law. With respect to the sale order, ponder this: the facts reported in the decision by Chancellor Bouchard clearly support a finding that Elting breached her fiduciary duty by refusing to consider real estate and merger/acquisition opportunities without regard to their merit, so how is it possible that a person with unclean hands (ELTING!) can come to Chancery Court and obtain relief? When similar claims were brought by Elting in New York State court, it was tossed out with the sense that the whole litigation was absurd and the parties needed to come to a solution on their own. Justice Schweitzer specifically found that it was “unclear who drew first blood.”

Mr. Shawe is resolute that the company never faced irreparable harm, regardless of any alleged acrimony between the shareholders. TransPerfect’s performance in 2015 was more successful than 2014, and it is on pace to perform even better in 2016 despite the litigation. He is confident that the company will continue to prosper and reiterates his offer of $300 million cash to Ms. Elting for her shares.”

There you have it folks. I believe that Chancellor Bouchard is suspect and deserves intense scrutiny in regard to his actions in this case. As always your comments are welcome and subject to being forwarded.  This is the latest in a series of articles on the infamous TransPerfect case. This case originally caught my attention because it involved newly-appointed Chief Chancellor Andre Bouchard. I had previously written an article about Bouchard and his apparent political cronyism in the Sussex County Registrar of Wills office and how he appointed three different clerks, who were completely incompetent. Bouchard surprisingly responded to my article in writing, which indeed was highly unusual. There was no doubt that I had struck a significant nerve. His message was filled with non-answers and circular reasoning and it was obvious he was way off-base. You have to ask yourself, has he gotten himself in the same boat in the TransPerfect case?TransPerfect Employees Fight For Their Company Now, we are close to a year-and-a-half later with the TransPerfect case still not yet certified for an appeal. We have the appointment of a custodian, who is, of course, a former law partner of Bouchard’s. Since that time, TransPerfect has been forced to incur an incredible and outrageous $8 million dollars in fees — and the number grows daily! This boggles the mind!? Let’s think about this, folks… Phillip Shawe is running a $500-million-dollar company for 24 years and has never had an unprofitable year. Now the Court comes in with no experience in this business and forces TransPerfect to spend $8 million dollars on Bouchard’s cronies to date and this case continues and the millions mount! How and why can this blatant stealing from this company continue? Additionally, the very employees who made this company a success are expressing their outrage at the Chancellor’s decision! They work in fear of being fired by this custodian. One courageous employee had the nerve to stand up to the Chancellor’s unlawful violations of the employees’ First and Fourth amendment rights — and filed a Federal Lawsuit against the Chancellor and the custodian! Apparently Judge Bouchard and his custodian went after personal e-mail accounts and potentially cell phones of TransPerfect employees, and if they refused, the workers could be terminated! Folks, I don’t know what you call this, but I call it unconstitutional, illegal, and grounds for impeachment! I have never heard of or seen a worse case of judicial overreach, cronyism, and possible corruption in any Delaware Court in my life time. In my opinion, Chancellor Bouchard has cast a dark shadow over the once pristine reputation of the Chancery Court and the great state of Delaware, as the nation’s corporate capital. The press is watching, folks! Last Sunday’s Delaware News Journal ran a front page cover story shedding light on Bouchard’s shenanigans, but this just scratches the surface. There is much more to tell, and the future of Delaware as the incorporation capital of the world, and therefore its economy, is seriously at stake. It appears that Bouchard is playing favorites with Plaintiff Elizabeth Elting’s local counsel, his 20-year friend, Kevin Shannon of Potter Anderson. You are reading it here first, folks… soon I predict many companies will be refusing to do business in Delaware because of this case! Bouchard’s insidious actions in The Chancery Court and his apparent efforts to enrich his buddies at the expense of the hardworking people of TransPerfect must stop. Bouchard’s decisions have weakened the credibility of Delaware’s Equity Court and the world is watching. It is time for the people of Delaware to call their local legislator and say no to cronyism and no to obvious improprieties. We must demand an investigation, folks, and somehow we must stop this! No one is above the law, and this includes Andre Bouchard. We must send a strong message to corporate America that Delaware is still a place to do business before it’s too late. Stay tuned……..much more to come! As always, your comments are welcome.     SOURCE:   http://hubpages.com/business/The-Appearance-of-Corruption-and-Cronyism-Continues    

Should Chief Chancellor Andre Bouchard be impeached?

  Chief Chancellor Andre G. Bouchard and his court appointed custodian of TransPerfect Global, Inc, Robert Pincus are being sued in the United States Southern District Court of New York by a high level executive, Timothy Holland, who claims Bouchard and Pincus have violated his constitutional rights-specifically his 1stand 4th amendment rights. The right to free speech and the right to be secure in your papers and possessions are basic human rights that we Americans cherish and are fundamental to our freedoms as Citizens of the United States. When these rights are violated, there definitely could and should be civil and criminal consequences. Having investigated this TransPerfect case and written about it frequently, there are some very disturbing issues about Chancellor Bouchard’s actions that need to be examined in regard to his rulings. Let me be specific about what has occurred so far in relation to the established and legal DELAWARE JUDGES’ CODE OF JUDICIAL CONDUCT 2008 TABLE OF CONTENTS” : Under Canon 1: A judge should uphold the integrity, independence, and impartiality of the judiciary. Rule 1.1 Compliance with the law. Rule 1. 2 Promoting Confidence in the Judiciary. Rule 1.3 Avoiding abuse of the prestige of the Judicial office. Chancellor Bouchard from the legal opinions I have gleaned and from the Court records has not been in compliance with the law. The law clearly states that a company can only be sold by order of the Judge when disagreements occur in a company that has only 2 stockholders. TransPerfect has 3 stockholders. Bouchard in his order to sell this very profitable company is violating Delaware’s business law. If anything, Bouchard has put the prestige of his judicial office at risk. Nobody who is in business with a Delaware corporation right now feels any confidence in Delaware’s Judiciary. As to Canon 1, Bouchard has failed miserably and is suspect in my opinion. Under Canon 2A Judge should perform his duties of judicial office impartially, competently and diligently. Rule 2.1 Giving Precedence to the Duties of Judicial Office. Rule 2.2 With Impartiality and Fairness. Rule 2.3 Without Bias, Prejudice and Impropriety. Rule 2.4 With No External Influences on Judicial Conduct. Rule 2.5 With Competence, Diligence and Cooperation. Rule 2.6 Ensuring the Right of All Parties to be Heard. Chancellor Bouchard has in no way been fair or impartial without bias, prejudice and impropriety. If anything he has been the exact opposite. He has exhibited grotesque bias against Phillip Shawe in favor of the Plaintiff Elizabeth Elting. Bouchard has not allowed testimony to be presented or all parties to be heard in regard to Phillip Shaw’s position in this remarkable case. Bouchard’s former business relationship with Elting’s attorney Keven Shannon and appearing together with him on an educational panel in New Orlean’s reeks of impropriety. Indeed as to Canon 2, Chancellor Bouchard fails miserably and is suspect in my opinion. Canon 3 and Canon 4: A Judge should regulate extra judicial activities to minimize the risk of conflicts with judicial duties. Rule 3.1, A Judge should be careful with Extrajudicial activities in general. Rule 3.2 Avoid Appearances before Governmental Bodies and Consultation with Governmental Officials. Canon 4: A judge should refrain from political activity inappropriate to the judge’s judicial position. Again, Chancellor Bouchard appeared with the plaintiff’s attorney in a public forum during the decision stage of this trial. This attorney is an old buddy and business associate of Andre Bouchard. This is a violation of the Chancellor’s direction of avoiding improprieties. Bouchard appeared at Legislative Hall in Dover on May 18th, lobbying for a bill to do away with the Sussex County Register of Wills. This was a political action that violates his judicial direction and was totally inappropriate. As to Canon 3 and 4, Chancellor Bouchard has failed miserably and is suspect in my opinion. Back to the lawsuit against Bouchard in the UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK by TIMOTHY HOLLAND. Chancellor Bouchard appointed Robert Pincus as a Custodian to run the business and set up the sale of the company, costing the company approximately $8,000,0000 so far in audits and salaries-clearly lining the pockets of Bouchard’s cronies. Bouchard gave Pincus unlimited power in his duties, way beyond what would be normal in private industry. By order of Pincus, all the employees including the Plaintiff were forbidden to talk about the case with the threat of their jobs being terminated- a clear violation of the 1st amendment. Additionally many of the e-mails of the employees were searched, including cell phone records-a clear violation of their 4th amendment rights. Robert Pincus, as an agent of Bouchard’s Court and apparent direction as to how to proceed, with unlimited governmental powers, creates a definite cause for a constitutional alarm and concern over judicial impropriety in this controversial case. An objective observer (possibly a Delaware Legislator), taking into consideration Chancellor Bouchard’s seemingly controversial acts in regard to the official Delaware Code of Judicial Conduct, could be deeply concerned. Additionally, if it is proven in US District Court that Bouchard violated Timothy Holland’s civil rights, an objective observer (possibly a Delaware Legislator) might think all of these in combination would be grounds for Bouchard’s removal from the bench. It is possible to impeach a Delaware Judge by way of the legislature. It takes a majority of the House of Representatives and a 2/3 majority of the Senate to get it done. Perhaps it should be considered? We will see.