I’ve been following Andre Bouchard’s rocky career since the day he took office as the new Chancellor in Delaware’s Court of Chancery, and I wrote about the way he handled the Sussex County Register of Wills Office in his first year, which I thought was abhorrent. I’ve been extra critical of him through the TransPerfect trial, which ended years ago, and somehow, court-payments linger and his old buddies at Skadden Arps are still collecting nearly six-figure monthly paychecks, thanks to Bouchard’s atrocious handling of the case.
I wonder which one of his friends could possibly get paid off this time because, in my opinion, the TransPerfect case has been milked for huge amounts of money for the benefit of Delaware’s Good-Ole-Boys Legal Club, aka friends of the Chancellor???
I’m seeing similar suspicious patterns in a new case covered by The Law360 story below, where he’s again being shortsighted, in my view, during a court-supervised sale, which sounds similar to me to the TransPerfect case. where he was, in my opinion, continually attempting to bully the sides into a settlement, rather than just doing his job as a judge.
The Law360 story, says it best, “Chancellor Bouchard, a veteran of epic — and unfinished — battles arising from the liquidation of TransPerfect Global Inc. after a falling-out between its founders.”
I would love to hear your thoughts on this one. In my opinion, this guy, who was never a judge before, somehow through his Democrat politics, getting the chief role at the Chancery Court, is not even learning on the job. Time for him to go!
Judson Bennett-Coastal Network
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See the Law360 story:
Chancellor Rips Critics Of Pharma Sale As ‘Incredibly Naive’
By Jeff Montgomery
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Law360 (April 20, 2020, 11:40 PM EDT) — Delaware’s chancellor branded some challenges to the court-supervised sale of drug developer Inspirion Delivery Sciences LLC as “astounding” and “incredibly naive” on Monday, noting that a court order had given a liquidating trustee broad latitude to complete the job.
The comments by Chancellor Andre G. Bouchard during a sale hearing teleconference followed arguments by Michael Yoder of Reid Collins & Tsai LLP that a new auction effort could have produced a better result than the offer of $4 million in cash and up to $10 million in future payments from OHEMO Life Sciences Inc. from royalties on anti-abuse opioid drug compounds.
Yoder, who represents former Inspirion members Raymond DiFalco and Manish Shah, argued that it made little sense for a trustee to “simply accept the first offer from a company insider,” referring to OHEMO, which has ties to IDS member Stefan Aigner.
Chancellor Bouchard, a veteran of epic — and unfinished — battles arising from the liquidation of TransPerfect Global Inc. after a falling-out between its founders, asked if Yoder had fully examined Delaware law and trustee discretion on the issue.
“I really find that astounding. You didn’t even address the standard of review in your papers,” the chancellor said. “I find equally astounding the notion that you didn’t think insiders would be able to bid. Do you know how most of these contests end? Typically somebody involved with the company buys the other side out.”
Yoder said he was not arguing that insiders could not participate, but said that his clients did not participate because they hoped for a successful sale to a third party and were unaware there were no third parties in the running until recently.
“That just demonstrates extraordinary naivety,” Chancellor Bouchard said. “It all seems so last-minute for your client to walk in here not prepared to do something, and I find it very hard to believe that if they wanted to make a bid, they couldn’t do it all along.”
Differences between Shah and DiFalco and member Aigner over approval and marketing of key anti-abuse drugs MorphaBond and RoxyBond hobbled the business, with Aigner attempting to remove DiFalco as president of IDS.
The court ordered a liquidation after a three-day trial in November 2018, although further disputes and market issues extended the process. The proposed winning bidder was OHEMO, based in Puerto Rico, a company championed by Aigner before the liquidation order as a replacement for the Shah and DiFalco-aligned production operation.
Cerovene Inc., controlled by Shah and DiFalco, made an offer valued at up to $15 million but missed a key deadline for the submission earlier this month, according to Donna L. Culver of Morris Nichols Arsht & Tunnell LLP, counsel to liquidating trustee Derek C. Abbott.
Culver said Cerovene argued that the COVID-19 crisis and a lack of wire transfer specifics kept the business from making a required bid deposit, but not until “literally minutes before deadline” did the prospective competing bidder “give any indication he could not comply with the deadline.”
Nothing prevented DiFalco and Shah from getting involved through Cerovene earlier, Culver said, adding that the sale opponents also had not shown how the trustee or process represented an abuse of discretion.
Peter B. Ladig of Bayard PA, counsel to Aigner, Acela Investments LLC and two other companies that hold Aigner’s interests in IDS, said the business already had worked through a several-month marketing process, with 81 potential buyers approached, before choosing to move ahead with OHEMO for lack of a better offer.
“This is not, as I think the objectors would have the court believe, a question of having an auction just between the two insiders,” Ladig said. “This was an auction process that ran for months, and it’s really the end of the second process.”
Ladig said nothing in the case record supported claims that Aigner maneuvered the trustee into setting the final, 48-hour window for receipt of a competing offer for the business.
Chancellor Bouchard said he would take the arguments under advisement.
Aigner is represented by Peter B. Ladig and Brett M. McCartney of Bayard PA.
Shah and DiFalco are represented by Carmella P. Keener of Cooch and Taylor PA and William T. Reid IV, Michael Yoder, Jordan L. Vimont and Ryan M. Goldstein of Reid Collins & Tsai LLP.
Liquidating trustee Derek C. Abbott is represented by Donna L. Culver of Morris Nichols Arsht & Tunnell LLP.
The case is Acela Investments LLC et al. v. Raymond DiFalco et al., case number 2018-0558, in the Court of Chancery of the State of Delaware.
–Editing by Aaron Pelc.