It should concern all of us that news of corruption in our once proud state of Delaware has again spread to the Spanish newspaper (see the translated story below)! We should all be embarrassed that Delaware has continuously attracted negative attention around the world. Read the shameful story below and let me know if you are as embarrassed as I am about this overseas coverage for Delaware.
Sincerely Yours,
JUDSON Bennett, Coastal Network
The TransPerfect case, one of the largest shareholder conflicts in the history of the United States, put more than 5,000 jobs worldwide at risk , 500 of them in the offices of Passeig de Gràcia in Barcelona.
The case has revealed the corruption that exists in the judicial institutions of the US State of Delaware, the original headquarters of TransPerfect until it had to flee to Nevada in search of a more fair treatment.
In recent years there has been a detailed follow-up of the different tricks used by the Delaware State Chancellery , with Judge André Bouchard in the lead, to favor the “Old Boys” of Delaware. Practices that have made poor, opaque and manipulated management visible in favor of a powerful circle of people.
It is important to highlight the origin of the TransPerfect Case. This is the moment in which the judge decreed the forced sale of a private company with benefits, the more than 250 million dollars spent on lawyers and consultants at the request of Bouchard, the deliberate concealment of the files of the case once resolved or the unbundled bills paid to law firms related to the judge, which are still arriving five years later.
This battery of controversial actions has cost the State of Delaware a multitude of criticisms and complaints from different strata of American society. In recent years, Delaware has fallen from the first to the eleventh position in the ranking prepared by the United States Chamber of Commerce, which assesses the transparency and impartiality of states through surveys of businessmen, lawyers and citizens.
In addition to having suspended the valuation of the United States Public Integrity Center, the United States Department of Justice is investigating the judicial team that managed the company’s sale process for alleged discrimination during 2017, when the company was under its control. Also, an opinion poll published in recent months by the Slingshot Strategies agency has revealed widespread discontent on the part of the citizens of the State of Delaware with the management of the current government.
Given this situation of alleged corruption and clear government opacity, there are already thousands of voices that have spoken in favor of a more transparent government, judicial institutions that represent the population and not just the interests of a few.
Specifically, the Citizens for a Pro Business citizen association, which has championed the citizen struggle to return Delaware to the field of transparency and competitiveness, has activated a campaign in which through irony it focuses on the Court Supreme and especially in André Bouchard.
“If you bill millions as a business lawyer, you like spending thousands of dollars on fancy dinners and you like driving cars that cost five times more than the average Delaware citizen earns annually, it seems you are the perfect candidate to become a Judge of the Delaware Supreme Court, ”they say, and concludes the video with a resounding“ our Supreme Court should be representative of the people it serves ”
On the other hand, Shirley Shawe , a TransPerfect shareholder and one of the most critical voices with the management of Judge Bouchard, has also wanted to shed light on the situation and has funded a TV advertising campaign in the States of Iowa and New Hampshire with the objective of increasing the notoriety of the problem that plagues one of the most powerful judicial courts in the country.
The advertising piece presents US Senator Joe Biden and Harvard professor Elizabeth Warren in a 2005 parliamentary dispute. The piece, edited, and with a voiceover that highlights the message, presents the following dialogue:
“Are you suggesting that the Delaware Supreme Court is not a competent or transparent court? Right, Joe Biden! That is why it has been valued at position 48 of 50 by the Center for Public Integrity in fundamental areas such as transparency and accounting ”.
The piece also highlights some of the shortcomings of the Delaware Supreme Court such as having no cameras in courtrooms, not reporting the earnings of judges, not having traceability of administrative documents and not presenting restrictions on the incorporation of judges who come from from the private sector.
Judson Bennett’s Coastal Network OPINION Dear friends, In my view folks, even putting aside the illegal lobbying and lying to Federal Investigators, which earned them a $5 million fine from the DOJ, the Skadden Arps law firm could be a virtual criminal organization. Don’t take my word for it, look at their actions when pressed to show the detail behind approximately $15 million in court-ordered billings for the “Custodian” services by the Chancellor’s friend and former business partner, Robert Pincus. How the hell can a Delaware Judge issue a Court order allowing an appointed, former business partner to continue to bill for services rendered without documentation or itemization two years after the case is over? It seems to me that this looks like suspicious activity? At a minimum, the appearance of impropriety? At worst, possible corruption? I say to BOUCHARD-Let the public see the damn bills! If PINCUS has indeed done the work you say he has done, then there is no need for the cover-up to continue. Is that really asking too much? According to the Law360 story below, his letter to the court claimed that TransPerfect is not allowed to “nitpick” at Pincus’ fees for his work as a custodian for the company. Nitpick?! How about showing the bills? No one is nitpicking here. Mark my words, I view Bouchard as part of the “Good Old Boys” network, and I think he will somehow — in some seemingly, shady-legalese-nonsense way — save Skadden Arps and Pincus from being charged with massive billing fraud. My prediction is that Bouchard will help Skadden continue to hide its bills and still order them to be paid. When it happens, please have your elected officials on speed-dial to protest what I believe is grotesque corruption. Folks $250 million went missing-poof!-from TransPerfect in crazy fees — and no one is fessing up as to where it went. When you order at a restaurant, they don’t just give you a blank tab saying you owe $50 — they break down the bill! If you were ordered by a court to pay bills, going on 2 years after the case was closed, wouldn’t you think you have the right to see what you are actually paying for?! Please let me know what you think. As always your comments are welcome and appreciated. Please see the story below. Sincerely yours, JUDSON Bennett-Coastal Network https://www.law360.com/articles/1201918/ex-skadden-atty-tries-to-block-transperfect-bill-requestSome say ‘it’s time’ for person of color on Delaware Supreme Court
By Cris Barrish July 12, 2019 Delaware has never had a black, Latino or Asian American justice on its Supreme Court. But with the pending resignation of Chief Justice Leo Strine, a groundswell is forming to change that. Strine informed Gov. John Carney in a letter this week that he was resigning nearly midway through his 12-year term. Strine did not indicate his future plans. All members of the five-person court have been white. Currently, there are four men and one woman. There have been two women on the Supreme Court during its history. The Delaware Supreme Court has never had a black, Latino or Asian member. The current justices, from left, are Collins J. Seitz, Jr., Karen L. Valihura, Leo E. Strine, Jr., James T. Vaughn, Jr. and Gary F. Traynor. Strine has announced that he will step down this fall. (State of Delaware) Delaware is one of 18 states that have never had a black justice, according to the nonprofit group BlackPast, which studies African American history. Delaware’s governor selects judges for all courts from a list provided by a nominating commission that reviews applications. It’s up to the Senate to confirm or reject a nominee. The looming vacancy led state Sen. Darius Brown, D-Wilmington, to issue a statement urging Carney “to consider the lack of racial and gender diversity when it comes to the historical makeup of the highest court in our state.” Brown’s statement said the opening “provides us an opportunity to correct that record.” Brown, who heads the Senate Judicial Committee, would not agree to an interview with WHYY. But retired Superior Court Judge Charles H. Toliver IV, who is one of a handful of black jurists who have served on that court, told WHYY that he and other attorneys of various races have periodically discussed the all-white makeup of Delaware’s highest court. Retired Superior Court Judge Charles H. Toliver IV says ‘it’s time’’ for Delaware to have a Supreme Court justice who is black. (Courtesy of Charles H. Toliver Jr.) Toliver once applied to the Supreme Court when a vacancy arose, but did not get selected. “I think there are qualified, more than qualified candidates who happen to be African American who can fill the job and if there is a vacancy they should be considered and it is time,’’ Toliver said. “I can’t say why no governor did anything before this point in time. You can speculate as I could but I have no information as to what happened or why.” Greg Sleet was once Delaware’s chief federal judge and the only black judge to serve on the U.S. District Court. He agrees with Toliver about the Supreme Court “It’s well past time that we see someone elevated to that position, someone of color, and certainly there is, in my view, it’s long, long overdue that an African American sit on that court.” Sleet said there’s more than a dozen qualified candidates “who might have an interest and I could certainly generically encourage them to apply.” Kiadii Harmon, who heads the Multicultural Judges and Lawyers section of the Delaware Bar Association, says a more diverse court is a better court. (Courtesy of Kiadii Harmon) Kiadii Harmon heads the Multicultural Judges and Lawyers section of the Delaware Bar Association. Speaking for himself and not the legal group, Harmon says a more diverse court, not only along racial but also socioeconomic and cultural lines, makes a stronger court. “All other things being equal,” Harmon said, “having a person with a different ethnic and cultural background on the Supreme Court will help the Supreme Court to serve the people of Delaware, which is its ultimate function in my mind.”
Citizens for a Pro-Business Delaware support diversity on the state’s Supreme Court. Chancellor Andre Bouchard is out of touch with normal Delawareans, and should not be the next Chief Justice of the state’s highest court. Delaware deserves transparency, equity, and diversity in its court system. Join the movement at http://www.delawareforbusiness.org/join-our-efforts.
OPINION Dear friends, I can’t thank my readers enough for the massive overflow of responses sent to me after my recent article titled, “Is The Delaware News Journal’s First TransPerfect Article in Over Six Months: Accurate, a Puff Piece or ‘Fake News’? You Decide,” was published. I have enclosed 20 of your top comments and have removed the last names to protect your privacy. The previous article encompassed several issues, concerning Andre Bouchard’s Chancery Court, the new and completely outrageous “contempt of court” charges against TransPerfect (stay tuned for more in-depth coverage), the amazing political ads raising national awareness of issues in Delaware’s Chancery Court by TransPerfect stockholder Shirley Shawe, the mother of CEO Philip Shawe. She bravely calls out Bouchard for ageism, sexism and corruption. As I have said for years now, there exists a separate system of “law” that Bouchard’s Chancery Court applies to successful entrepreneurs like the Shawes to seemingly drain them dry — and the crony gravy train continues. My sources tell me Bouchard has scheduled another hearing, apparently to again improperly enrich Skadden Arps at TransPerfect’s expense on October 10th, and I am planing on live coverage! Folks, the bottom line, in my view, is that the Delaware Chancery Court’s archaic rules have created, at a minimum, appearances of impropriety, and at worst, outright corruption—and this is unprecedented. You can make a difference in 2020 by voting only for Delaware State Legislature Candidates who promise to take on court corruption and cronyism. The days of free millions to Kevin Shannon, Steven Lamb, Bob Pincus and Bouchard’s other pals must stop—and justice must be served folks. That’s how I see it and what I’m advocating. Again, I thank you for your many comments; please keep them coming! Sincerely yours, JUDSON Bennett-Coastal Network SCROLL DOWN: 1) From Walt: “Judson Bennett’s Coastal Network”, “Citizens for Pro Business Delaware”, and Incessant Legal Action by the Shawe’s, and now Mrs. Shawe is sending out political ads against Biden. Delaware has never seen anything like this before. People are talking. WALT 2) From Lynn: Can’t wait to see Mrs Shawe’s ads against Biden? We appreciate all you do for Delaware. You are a wonderful writer with no fear. – Lynn 3) From Sam: How can they continue billing without explanation ? Andre Bouchard is destroying Delaware’s reputation. There should never be a question about the Chancery Court’s integrity. You are definitely making a difference. Can’t wait to see the ads ! Keep it up buddy. Best, Sam 4) From Alan: The News Journal article seems to capture the essence of the whole picture. Probably fairly accurate with a slight spin in favor of the Chancery. I sure hope Bouchard does not get the Supreme Court. He is bad news. Can’t help admiring their persistence. Attack ads on Biden- Really amusing!! 5) From Dave: Jud, keep beating the drum—you are the talk of Dover-LOL DAVE 6) From Jim: Thanks for the information Judson. Typical News Journal article with its establishment spin. Keep the articles coming. The article does not hurt the Shawes and frankly it brings more attention. Fascinating business. JIM 7) From Patty: Bouchard is up for Supreme Court Chief Justice, we have got to prevent that somehow! Maybe the controversy with TransPerfect and all the negative publicity you put out about him will keep it from happening. We in Sussex all know the power of your pen. You have certainly helped people win and made people lose. Keep up the great work. Delaware loves you Jud! Patty B. 8) From Joe: Jud, I think the piece covers it accurately, maybe with a little bias? Quite a story! 9) From Tim: Judson, Delaware is not used to someone using the power of advertising and activists to change a situation in the Courts. I have a hunch the powers to be are getting nervous. Thanks for all you do. Tim 10) From Pete: Judson, Sounds like CEO Philip Shawe and “Mommy Dearest” don’t mess around. Fascinating stuff and you have done an amazing job on this entire expose’. You gonna get the movie rights? PETE 11) From Jack: Wow! Quite an article—Lot of Puff and spin for the dark side. LOL Love your articles. Best regards, Jack 12) From Dick: Thanks for sending. The appearance of irregularities in this incessant case are very disconcerting. The Shawes are to be commended in my opinion and if they can make a difference. I am all for it and glad. Good job buddy. Dick 13) From Scott: Jud, Biden has lost it. He is a total insipid character now without substance. I rate the piece as a puff piece. The Shawes really got screwed by Bouchard. He has got to go! Keep it up and thank you. Scott 14) From Elsie: Judson, Delaware should be attacked by the Shawes and especially Biden—YOU GO MRS SHAWE!—WOMAN POWER 15 From Laurie: Hi Jud, Quite an article, I like the way you presented it this time. Usually by the time I read your communication above the article, I don’t read the article. The News Journal is definitely putting a negative spin on it. What a mess-Delaware needs to fix this crap, but as long as the Dems have the power, it will only get worse. Keep up the good work. We love your articles. L, Laurie 16) From John: Amazing stuff, Delaware is corrupt and the News Journal is suborning the corruption as it always does! 17) From Bill: Judson, The Delaware we once knew is no more. The establishment is going to protect itself and the News Journal is a liberal rag! Best to you, Bill 18) From Alan: Biden stinks-such an empty suit. Good for Mrs. Shawe. Alan 19) From Jim: Biden is responsible for changing the Bankruptcy laws which screwed everybody and protected the credit card companies. Mrs. Shawe is a little off on her political ads , however there are ads playing from that Pro Delaware Citizens group all over the radio. The media, the legislature, and the corrupt judiciary are all in it together. Keep up the good work. Jim 20) From Sarah: Like the national liberal press, they embellish and spin it the way they want it. Thanks for sending. – SarahOPINION Dear friends, I happen to believe that our court system under Bouchard’s rule, is corrupt on its face — the evidence is simply overwhelming. Further, I am hearing from TransPerfect employees across the globe that Bouchard has retaliated again, punishing these hard working folks because of their free speech activities — this time, in the form of a “contempt of court charge.” Employees are again being illegally intimidated by our Chancery Court, and being asked to enrich Skadden Arps further, or face contempt. It’s a continued outrage! Yet the Democratic insiders in Delaware have been in denial for years. All along they have been saying, “It’s not a problem, people outside of our state just don’t know how things work around here.” Well now folks, we have a national publication, Yahoo Finance, which is read by Wall Street and lawyers and other professionals, saying that Delaware’s problems are going to be on center stage during the Presidential race. As I see it, this could have lasting effects as the Democratic Party becomes more progressive and anti-corporate. Delaware’s existing, archaic policies are going to be a problem. The News Journal article shows the “good old boy” cronies are circling their wagons versus embracing much needed anti-corruption reform in our Chancery Court. Delaware is still stuck in 1919, folks, and the world has changed! Now it’s 2019 and it’s going to be 2025 before you know it. Wayne Gretzky, has a famous quote, “that it’s not about where the puck is, it’s about where the puck is going.” You can see from this story, not the News Journal, how the TransPerfect issues clearly illustrate the divide between Warren and Biden. Please read the story below and share your feedback. Starting with the Democratic Debate tonight, and the retaliatory Chancery Court “contempt” hearing tomorrow — this looks to be a big moment for Delaware, and our business and economic policies. Respectfully Yours, JUDSON Bennett-Coastal Network Please scroll down: https://finance.yahoo.com/news/joe-biden-elizabeth-warren-debate-delaware-030000955.htmlI’m going to keep this short, folks, because I want you to read the newest story in the Delaware News Journal about TransPerfect, which I have been writing about for the last few years. I’ve read the story twice and I’d love to hear your opinion. It seems to me that sadly, Bouchard and his good-old-boy network, who continue to take money from TransPerfect every month still — 2 years after the sale — are powerful enough to influence News Journal coverage. Read the story below and see if you agree that the Shawes, who are courageous enough to take on Chancery Court corruption using the Democratic Primary as a backdrop, are portrayed as the antagonist. I say they are really the victims, and they have been month after month to this very day of Skadden Arps continued court-ordered looting — for nothing of value in my view and in the view of employees — but this is sealed up, so how can we really know? Read below, and as always, I look forward to your feedback.Elizabeth Warren’s ‘Big Structural Change’ Threatens Joe Biden’s Delaware
Paul Blumenthal, HuffPost September 11, 2019 On Thursday night, Joe Biden and Elizabeth Warren will share a presidential debate stage for the first time in a hotly anticipated showdown between the establishment Democratic front-runner and one of his fiercest progressive challengers. Biden and Warren’s core disagreement centers on how hard the next president should push to fundamentally restructure the American economy. Warren has called for “big structural change”; Biden promises a return to normalcy. To really understand this schism, you must consider the 36 years that then-Sen. Biden spent defending the uniquely pro-corporate laws of his home state, Delaware — laws that protect America’s biggest companies from taxes, lawsuits and accountability; fuel economic inequality; and prioritize the interests of shareholders over those of consumers, debtors and workers. The system Biden protected affects every American: Because so many companies are registered there, Delaware is effectively the principal author and enforcer of much of the nation’s corporate law. The state boasts more corporate registrations than human residents, including two-thirds of Fortune 500 companies. Delaware is corporate America’s home base. Like Sen. Bernie Sanders’ attacks on the “rigged economy,” Warren’s calls for change represent a direct challenge to Delaware’s special status. By taking on three key policies that have made Delaware into the corporate paradise it is today, the Massachusetts senator is calling much of Biden’s record into question. Shareholders Come First Warren’s first and biggest target is the notion of shareholder primacy: the idea that corporate managers’ most important legal duty is to maximize shareholders’ wealth. That means the interests of workers, families, local communities and the environment are of secondary importance to executives and board members. “That is in part a function of Delaware corporate law,” said Kent Greenfield, a corporate and constitutional law professor at Boston College. Under Delaware law — which covers all those companies registered in the state ― shareholders must come first. In effect, Delaware corporate law encourages companies to undercut employee pay and ship jobs overseas in order to enrich shareholders. And it locks out other stakeholders, like workers and consumers, from being considered in the corporate decision-making process. Between 2007 and 2016, Warren noted last year, “large American companies dedicated 93% of their earnings to shareholders.” This has other real-world consequences. When President Donald Trump pushed a massive corporate tax cut through Congress in 2017, for example, much of that money was returned to shareholders, rather than workers or other stakeholders. As vice president, Biden criticized shareholder primacy, saying in 2016 that corporations should “embrace your obligation to workers as well as your shareholders.” But it’s the competition between states to develop the most business-friendly corporate charters ― the competition that Delaware won ― that effectively ensures shareholder primacy across the nation. And the last time Congress moved to end that competition in the 1970s, Sen. Biden swooped in to defend Delaware’s position. In the wake of a succession of corporate scandals and bankruptcies, the Senate held a series of hearings to examine whether the federal government, instead of the states, should issue corporate charters for large companies. These hearings were anathema to Delaware’s politicians and business community. The state was then, as now, the national leader in corporate registrations. Fees from business registrations were, and still are, a major source of funding for the state government. (Today, they account for more than one-quarter of the state’s income.) Federalizing corporate charters would also cut profits for the state’s lawyers, accountants and corporate registration companies. As Congress mulled a possible change, Biden appeared before two different committees to vouch for prominent Delaware lawyers who were there to argue against nationalizing corporate charters and for preserving Delaware’s special position. At one hearing, he suggested that senators not attending should “take the time” to review the lawyers’ testimony “before they make final decisions.” Before another hearing, he praised the witness: “His judgment on these matters is also pretty sharp.” Biden and Delaware won: Congress never moved to have the federal government take over issuing big corporate charters. The hearings fizzled out after Ronald Reagan took the White House and Republicans won the Senate in 1980. Now progressives like Sanders and Warren are trying again. In 2018, Warren introduced legislation to federalize the top tier of corporate charters and thereby take away Delaware’s special place as the national writer of corporate law. Warren’s bill would require corporations with more than $1 billion in annual revenue to obtain a federal corporate charter that would require them to consider the needs of a broader array of stakeholders — employees, local communities, suppliers, the environment — when making decisions rather than solely focusing on the concerns of shareholders. “The role that Delaware plays in determining our system of corporate governance is also, in that sense, going to be in play in the coming campaign,” said Robert Hockett, a Cornell Law School professor who advises Warren, Sanders and Rep. Alexandria Ocasio-Cortez (D-N.Y.). Biden And Warren Clash, Round 1 The second aspect of the Delaware system that Sanders and Warren have taken aim at is its credit card industry, which Biden boosted by making it harder for Americans to discharge credit card debt in bankruptcy. In 1981, Delaware state lawmakers, at the behest of Republican Gov. Pete du Pont, passed a sweeping financial deregulation bill designed to attract banks to the state. The bill, written by lobbyists for Chase Manhattan Bank and J.P. Morgan (then two separate companies), eliminated the state’s interest rate caps and gave special tax treatment to financial institutions. Months after the legislation passed, MBNA Corporation, one of the largest credit card issuers in the country, relocated from Maryland to Delaware. In the decades that followed, Biden and the rest of Delaware’s congressional delegation worked hard to protect MBNA and the other financial institutions that flocked to their state. One big problem for credit card issuers was federal bankruptcy law. As the credit card industry exploded in the 1980s and 1990s, an increasing number of Americans filed for personal bankruptcy protection ― a legal process that allows individuals to prioritize what debts they can pay off and start anew with less debt than before. Creditors, including the credit card industry, banks and retailers, argued that people were taking advantage of the process to discharge debt they could otherwise pay. These businesses wanted the debts owed to them to be higher priority and harder to discharge. On the other side were academics led by Warren, then a Harvard Law School professor. Warren’s research found that people filing for personal bankruptcy were generally dealing with a stroke of bad luck. They had a major medical expense, a messy divorce or a lost job. (Some of this research was — and remains — controversial.) And women made up a major proportion of those declaring bankruptcy. Warren argued that the system was a last-ditch safety net for hardworking people. In the late 1990s, the credit card industry funded a massive lobbying campaign to pass federal legislation to make it harder to discharge credit card debt in personal bankruptcy. They hired President Bill Clinton’s former Treasury secretary, Lloyd Bentsen, and funded multiple questionable studies to back up their argument that fraud was causing the spike in bankruptcies. At the same time, Congress created a National Bankruptcy Review Commission to study the problem. The commission, which Warren served as reporter and senior adviser, mainly sided with the academics against the credit card industry. But the industry’s lobbying campaign won out. The first legislation to change the bankruptcy process in favor of creditors was pushed through the House in 1997. It went through four separate iterations before ultimately becoming law in 2005. Republicans generally backed the bills while the majority of Democrats opposed them. That first bill passed the Senate too and almost became law ― until Biden reportedly threatened to filibuster the measure because the House had made it too friendly to creditors in conference committee. Nonetheless, he had initially voted for that bill, and afterward, he took the reins as the main Democratic voice in favor of rewriting bankruptcy law. News reports at the time referred to Biden as “the linchpin to passage,” “the only Democratic true believer” and “possibly the bankruptcy bill’s staunchest defender.” In 2000, President Clinton pocket-vetoed another version of the bill on the advice of first lady Hillary Clinton, whom Warren had convinced to oppose the measure. A Democratic amendment that would have prevented abortion opponents from using bankruptcy to discharge legal debt stemming from their participation in violent protests killed the 2001 bill. Finally, with a bigger Republican majority in 2005, Congress passed a bill that was signed into law by President George W. Bush. Biden was one of a minority of Senate Democrats who voted for the legislation all four times. Today, Biden claims that his support was part of an effort to improve legislation that was ultimately going to pass with or without him. As the ranking Democrat on the Senate Judiciary Committee in 2005, he saw it as his job to work with Republicans and Democrats to solve the issue of rising personal bankruptcies. Through his actions, he helped to protect lower-income debtors, prioritize alimony and child support payments, and increase credit card disclosure, according to the Biden campaign. The former vice president has “championed the middle class for his entire career and has a proven track record of delivering on his progressive values,” said Mike Gwin, a Biden campaign spokesman. But though he showed some distaste for creditors’ goals, Biden believed the bill was necessary and tried time and time again to pass it. He shoehorned the measure into a foreign affairs bill to get it before the Senate Foreign Relations Committee, where he was ranking member, in 2000. He cast the deciding and only Democratic vote in a 10-8 split supporting the bill in the Senate Judiciary Committee in 2001. “I am so sick of this self-righteous sheen put on anybody who wants to tighten up bankruptcy [who] is [painted as] really anti-debtor,” Biden said at a 2001 hearing. “People are getting hurt.” Over the years, he voted against numerous consumer-friendly amendments offered by his Democratic colleagues that would have eased the bill’s new requirements for consumers filing bankruptcy over medical debts or debts incurred while on active-duty military service. He opposed other amendments that would have put caps on credit card interest rates and penalized mortgage lenders if they had broken the Truth in Lending Act when they extended credit. “Some of these looked like they were sympathetic to people with real issues, but they were not good public policy solutions,” a former Biden Senate aide said. Through the many iterations of the bankruptcy bill, Warren emerged as its fiercest outside opponent. And she directly took on Biden. The year after the 2001 bill failed, Warren wrote a 39-page article in the Harvard Women’s Law Journal arguing that politicians like Biden should be forced to pay a political price for supporting economic legislation that hurts women. Biden’s assertion that he made the bill prioritize women was misleading, Warren argued. Biden said he moved alimony and child support up the list of priorities for payment when a person entered personal bankruptcy. Child support services professionals backed his proposal, arguing that it would “revolutionize the enforcement of support obligations against debtors in bankruptcy.” But Warren wrote that this move was simply a sleight-of-hand, pushing alimony and child support payments above priorities that only came into play in business-related bankruptcies. The practical effects of the proposed change, she wrote, “would be either nonexistent or detrimental.” More to the point, the latest bill’s restrictions on personal bankruptcy would fall hardest on women because it was women who made up the majority of bankruptcy filings, Warren argued. “For a million women who will go to the bankruptcy courts each year, there is no more important pending federal legislation,” she wrote. Major women’s rights organizations, including the NOW Legal Defense and Education Fund, the National Partnership for Women and Families, and the National Women’s Law Center, opposed the bill for the same reason. Warren and Biden finally came face to face at a Senate hearing on bankruptcy in 2005. In a now-famous exchange, he back-handedly complimented her for making “a very compelling and mildly demagogic argument.” He suggested she was targeting the wrong credit card problem by opposing the bankruptcy bill. “Your problem with credit card companies is usury rates from your position,” Biden said. “It is not about the bankruptcy bill.” “But, Senator, if you are not going to fix that problem, you can’t take away the last shred of protection from these families,” Warren replied. “I got it, OK. You are very good, Professor,” Biden said to laughs from Warren and the audience. The 2005 law did reduce the personal bankruptcy filing rate. But studies indicate the law made it harder for the country to rebound from the 2008 financial crisis, led to 250,000 additional home foreclosures and drove a 25% increase in persistent insolvency. The pro-creditor status quo might not last forever — especially if Sanders or Warren wins the presidential election and the Democrats retake control of the Senate. The Sanders campaign announced on Sept. 5 that it would introduce a proposal to roll back parts of the 2005 law to help those with heavy medical debts. The Warren campaign has yet to release any bankruptcy-related reforms. The Place To Go Bankrupt The third pillar of the Delaware system that Sanders and Warren have challenged are the laws that make it a favorite place for companies to file for bankruptcy. Biden, again, has been on the other side. In the early 2000s, Enron, an energy services firm, collapsed amid a massive corruption scandal. John Cornyn, then attorney general of Texas, pushed the company to file for bankruptcy in Houston, where it was based and where it employed 7,500 people. Instead, Enron filed for bankruptcy in Manhattan, where one of its subsidiaries was incorporated and it employed 57 people. This was possible because U.S. law allows corporations to file in any state in which they or their subsidiaries are incorporated. In other words, companies can venue or forum shop, effectively choosing the jurisdiction most favorable to their interests in bankruptcy. And there are two favorite venues: Delaware and New York. The Los Angeles Dodgers filed for bankruptcy in Delaware. General Motors, famously of Detroit, filed for bankruptcy in Manhattan. There is a longstanding debate in the world of corporate bankruptcy law about whether venue shopping is a problem. Some contend it makes sense to let companies go to Manhattan and Delaware where the judges have greater experience in handling large, complicated bankruptcies. But others, like Warren, argue that venue shopping allows corporations to pick their judges while creating steep burdens for employees, pensioners and other small creditors to attend out-of-town proceedings and pay the higher legal fees charged in both Delaware and Manhattan. That’s what Enron’s employees argued. And it was why now-Sen. Cornyn, with Warren’s help, authored an amendment to the 2005 bankruptcy reform bill to ban venue shopping. At that same committee hearing, he asked her to explain her concerns about the practice. “In the case of large corporations that can leave their home venue ― Enron, who can leave Houston, Texas, where its employees, where its pensioners, where its trade creditors reside ― and escape the obligation to make the process open to the thousands of people who are directly affected by the bankruptcy, that affects the bankruptcy system overall,” Warren said. “A fair bankruptcy system is one that retains access for the employees, for the pensioners, for the small creditors, and that means those cases need to stay home, not go to a distant location where they [the corporations] think they may get a better deal.” Warren’s comment ― that corporations could “escape the obligation to make the process open” ― angered Biden. “I find it outrageous such a statement,” Biden said before asking Warren if she thought Delaware courts weren’t open. Delaware’s dominance in corporate bankruptcy cases is a side effect of its dominance in corporate charter registration. It’s also a huge cash cow for local businesses from law firms to hotels to restaurants. But to critics like Warren, it makes it easier for the little people to get screwed. “Employees of companies like Enron literally cannot go to Delaware and hire local counsel, which the Delaware bankruptcy court requires them [to do] before they can make an appearance, and that effectively cuts thousands of small employees, pensioners and local trade creditors out of the bankruptcy process,” Warren tried to explain to Biden. “If they can’t afford it, they are not there.” Before moving on, Biden declared that Cornyn’s amendment was going nowhere. Biden and his fellow Delaware senator, Tom Carper, threatened to withhold their votes from the bankruptcy bill if the venue shopping amendment was attached. Cornyn withdrew it under pressure from Republican leadership in order to placate the two Democrats. That wasn’t the first time Biden had quashed an effort to stop venue shopping in corporate bankruptcy. “Most of these proposals were to remove an industry Delaware had built up and to get a piece of the action for themselves,” the former Biden Senate aide said. “As long as Senator Joseph Biden of Delaware is in the Senate,” any possibility of venue shopping reform is “nonexistent,” Brady Williamson, the National Bankruptcy Review Commission’s chairman, observed in 2006. When Warren won election to the Senate in 2012, she joined Cornyn as the Democratic co-sponsor on legislation to ban venue shopping. But the bill hasn’t moved in the Senate even though Biden is gone. Delaware’s current Democratic senators ― Carper and Chris Coons ― have taken his place as its biggest opponents. “It’s another one of these ‘what’s good for Delaware and to hell with the nation,’” said Adam Levitin, a bankruptcy law professor at Georgetown University Law Center. The Coming Debate It’s no big surprise when senators promote their home state’s business interests. “I take it very personally when my colleague or a colleague in the Senate decides to take an action that would benefit his state only marginally but would do great damage to my state,” Biden said in 2004. “I take that very personally.” Biden’s competitors for the Democratic presidential nomination have done it too. Sanders has supported stationing F-35 jets in Vermont, bringing jobs and dollars to his state. Warren and Sen. Amy Klobuchar (Minn.), whose states are both home to big medical device manufacturers, endorsed a bill to repeal the medical device tax included in the Affordable Care Act. And Sen. Cory Booker (N.J.), whose state is home to numerous pharmaceutical companies, voted against a proposal to lower drug prices. What has made Biden’s parochialism so significant is that his state’s special interests are central to the structure of the U.S. — and global — economy. By putting his state first, Biden helped to build and protect the economic structure that Warren and Sanders blame for a wide range of Americans’ troubles. That is what the coming debates will be about. CORRECTION: An earlier version of this story stated incorrectly that Biden voted against a 2005 amendment to bar wealthy bankruptcy filers from hiding assets in special asset protection trusts. He voted for it. This article originally appeared on HuffPost.
Republican businesswoman behind $500,000 Joe Biden attack ads explains she was furious he supported ‘corrupt’ Chancery Court that dissolved her business costing her millions
Political unknown Shirley Shawe paid for the TV ads in Iowa and New Hampshire to show next week Shawe shared with DailyMail.com the ad is to ‘raise public awareness to the serious issues plaguing America’s most powerful business court’ It is the largest third-party attack ad spend so far in the 2020 campaign The ad includes a 2005 exchange between then Senator Biden and Elizabeth Warren – at-the-time a Harvard professor – as they discussed bankruptcy reform But the ad dices up the dialogue between the two and suggests that they were speaking on the Chancery Court Transcripts from the hearing reveal that Biden had just misspoke and confused bankruptcy courts with the Chancery Court, a point he later clarifies Both Warren and Biden have called for the ad to be pulled from the air Shawe seems to be angry about a business dispute that impacted her son in 2015, more than ten years after the political exchange took placeBy MATTHEW WRIGHT FOR DAILYMAIL.COM and KEITH GRIFFITH FOR DAILYMAIL.COM
PUBLISHED: 14:52 EDT, 29 August 2019 | UPDATED: 16:15 EDT, 29 August 2019 A Republican entrepreneur who released a perplexing ad decrying Joe Biden’s relationship with the Delaware Chancery Court has explained that she was angry at the presidential candidate for supporting the court that dissolved her business – costing her millions. Shirley Shawe told DailyMail.com that she released the misleading advert as a means to ‘raise public awareness to the serious issues plaguing America’s most powerful business court.’ ‘I was a personal victim of ageism, sexism, and corruption at the hands of Delaware Chancellor Andre Bouchard over the last five years; my constitutional rights were trampled and my private property was seized by a Delaware government body and put up for auction-and part of the justification for this was my age,’ she claimed in a statement to DailyMail.com. She added the behavior was ‘typical of the “Old Boy’s Club” that runs Delaware.’ ‘The Chancellor turned simple board deadlock into a 3 year occupation of the company I am part owner of, and caused over $250 million to be spent on the case, much of which directly benefited his social circle in Delaware. Bouchard was sworn in as Chancellor in 2014, five years after Biden ended his time as Senator of Delaware and almost a decade after the footage Shawe used in her advert. Shawe clarified that she sought to ‘encourage the candidates to drive reform’ with her ad that correctly identifies Delaware as getting an ‘F’ grade from the 2015 State Integrity Investigation that looks at ‘state government accountability and transparency.’ The ad includes a 2005 exchange between then Senator Biden and Elizabeth Warren – at-the-time a Harvard professor – as they discussed bankruptcy reform. ‘The Delaware court is too male, too white and anything but open,’ the ad’s narrator asserts in the advertisement. In the ad, Biden speaks on how the Chancery Court are open and calls it ‘outrageous’ to suggest otherwise. The clip then shows Warren ‘responding’ and seemingly pointing out how the Chancery Court impacts Delaware workers. But, the clip actually chops up Warren’s entire comment and fails to contextualize Biden’s comment – especially once he realizes that the conversation is about bankruptcy courts and not the Chancery Court. A transcript from the hearing shows that Biden realized his mistake and focused on Bankruptcy. Chancery was only ever mentioned in his initial comment. ‘Employees of companies like Enron literally cannot go to Delaware and hire local counsel, which the Delaware bankruptcy court requires of them before they can make an appearance, and that effectively cuts thousands of small employees, pensioners and local trade creditors out of the bankruptcy process,’ Warren said in the entirety of her quote. ‘If they can’t afford it, they are not there.’ Both Biden and Warren demanded the ad to be pulled, with the former Vice President declaring that the advert mischaracterized his remarks. Shawe shared that she was ‘disappointed’ by the politicians reaction but added that it was not ‘unexpected’ for Biden to respond in that way ‘given his home state court’s attempt to silence me and treat me as less than a person for years.’ She continued: ‘It is typical of the “Old Boy’s Club” that runs Delaware.’ ‘For Ms Warren, I suspect the Senator doesn’t yet fully understand how the Chancery Court harmed me and our 5000 workers worldwide. If she researches this case more deeply, I believe she will understand the facts and may have a different view.’ The Republican apparent endorsement of Warren – as seen on the ad – happens to just fall on that particular issue. Shawe said ‘who knows’ when commenting on who she would support for other issues and added that she and Warren agreed on this particular one. ‘The court needs to be brought up to 2019 and needs transparency,’ she stated. ‘I will keep fighting for that. This is just the first in a planned effort to drive awareness.’ Shawe’s grudge seems to stem from a costly legal battle that her son’s translation company, TransPerfect, fought in Delaware’s chancery court in 2015. ‘Two years after the case has ended, my company is still be billed outrageous sums per month by Skadden Arps, the Chancellor’s and the Chief Justice’s former employers,’ said the businesswoman. ‘We are required to pay these bills by court order, yet we are not allowed to see them, or even know what this work is for.’ She plans to run the television ad in early primary states Iowa and New Hampshire next week in what is the largest third-party attack ad spend so far in the 2020 presidential race. The ad eschews mainstream campaign issues and instead focus on the Chancery Court, a legal system which Shawe blames for a business dispute that hurt her son’s company. ‘The Delaware court is too male, too white and anything but open,’ the ad’s narrator intones. The 60-second ad shows Biden during a 2005 Senate hearing, in which he debated Elizabeth Warren, then a Harvard law professor. The ad accuses Biden of defending the Chancery Court as Warren attacks it. The transcript of the hearing shows that Warren was actually speaking about the bankruptcy courts, a separate forum of equity law, but Biden became briefly confused and referred to chancery court. Delaware’s Court of Chancery oversees business disputes, though not bankruptcy, which is a federal matter. The state’s chancery court has great influence due to the large number of companies that are incorporated in Delaware, which has business-friendly laws. Both Biden and Warren, who are among top contenders for the Democratic presidential nomination, have called for the ad to be pulled. ‘The ad misrepresents Vice President Biden’s position in this exchange from 2005 by manipulating footage to suggest he means one court when he means another,’ Biden campaign national press secretary Jamal Brown told CBS News in a statement. ‘It’s a clear reminder of the way that third-party money poisons our politics with false attack ads, and it has no place in this race,’ he continued. Warren also spoke out against the ad, even though it seems to cast her in a heroic light. ‘Elizabeth does not believe individual donors should have an outsized influence in this primary, and has consistently said that Super PACs or individuals with the means to finance ad campaigns on their own should stay out of the primary,’ her deputy communications director Chris Hayden said. Shawe’s grudge seems to stem from a costly legal battle that her son’s translation company, TransPerfect, fought in Delaware’s chancery court in 2015. In a landmark case, the head of the Delaware Chancery, Chancellor Andre Bouchard, ordered the dissolution of the company even though it was not in financial distress, but because its co-owners could not get along. The court-ordered decision to sell TransPerfect came in 2015 after a chancellor concluded the feuding CEO’s Philip Shawe and Elizabeth Elting were ‘hopelessly deadlocked’ over significant matters and business decisions. Shirley Shawe owned 1 percent of the company at the time of the forced sale, which resulted in her son Philip Shawe gaining ownership by bidding in the public auction. Shirley Shawe launched a crusade against the chancery courts, however, lobbying lawmakers to banned forced sales like the one of TransPerfect. ‘When a judge makes a precedent and makes a ruling to just sell a privately held company, then why would other people be motivated to start a company and why would they be motivated to incorporate in the state of Delaware? If someone is just going to take their private property?’ Shawe told WMDT-TV in 2017. Shawe has said through a spokesperson that she is a Republican and did not intend to boost Warren with her ad. She has vowed to run to run the TV ads in spite of the candidates’ protests, and has also reportedly ordered print newspaper ads on the subject.