Skadden Arps Bills $200,000 for Creating a Bill!
And More Lowlights from the Chancery Court Hearing, as Andre Bouchard is Embarrassed by Former Firm
I listened via a public line to the entire historical Court of Chancery remote hearing held yesterday March 2, 2021. Having followed every detail of the Delaware TransPerfect saga and the cluster of improprieties seemingly orchestrated by soon-departing Chancellor Andre Bouchard — who is leaving his post very early, years before his term is up — was to me a continuation of pandering and cronyism.
You want to talk about outrageous! This is larceny folks! Skadden billed $200,000 for creating an invoice. Can you imagine the audacity?! Billing someone for creating the bill?! You want to talk about a firm (Skadden Arps) that knows the Chancellor (Bouchard) has their back — this is the definition of cronyism. This is THE example of knowing you can do whatever you want to do and get away with it, because your buddy the judge, who used to work at your firm, is presiding over the case. It’s outrageous and an embarrassment to Bouchard, who NOBODY should feel sorry for. That his own people (Skadden) would have the nerve to bill in such a manner is highway robbery and then ask him to be OK with it?! Even Bouchard told Skadden to “give it thought,” and “carve that out.” Not the wink-and-a-nod they were expecting from their old pal?
When you boil it all down, a firm that would bill $200,000 for creating the bill — imagine how much padding must REALLY be going on in these bills! I was struck by the audacity of Skadden Arps. To feel justified in billing TransPerfect for the time it took to prepare an invoice or feel justified in billing for time involved in defending against lawsuits involving Robert Pincus by TransPerfect. In other words, Pincus and Skadden Arps think they have the right to charge fees for the legal preparation against someone who is suing them.
Also disturbing to me, was the bottom-line request from Bouchard to his old law firm: Submit an affidavit claiming justification for work done. Meaning, to me, that will be his basis of consideration in deciding?
The lawyer for Pincus and Skadden, Jennifer Voss, called TransPerfect CEO Philip Shawe “a serial litigator.” In my view, business-unfriendly Delaware has never encountered a dedicated entrepreneur like Philip Shawe, who has fulfilled the American Dream and refuses to be ripped off by a Good Ole Boy situation where the lawyers are provided huge windfalls by the Judge, instead of providing equity, which is his job! Maybe this is why he’s leaving his job 7 years early?!
Please read the Law360 article below and send me your comments. Indeed, Bouchard’s final decision on this dispute will, in my opinion, determine his legacy if you want to call it that, considering his controversial tenure and early departure next month.
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By Jeff Montgomery
Law360 (March 2, 2021, 8:48 PM EST) — Delaware’s chancellor ordered Skadden on Tuesday to
submit an affidavit attesting to the accuracy and reasonableness of custodian fees recently charged to
TransPerfect Global Inc., saying it was in the interest of ending billing battles stemming from a
rancorous court-ordered sale of the business.
Chancellor Andre G. Bouchard gave Skadden Arps Slate Meagher & Flom LLP and custodian Robert B.
Pincus a week to submit the information after a half-day argument on three pending issues in the case.
Among them was a motion by Pincus for a discharge from his custodian’s role with indemnification and
nondisparagement protections, among other terms, opposed by TransPerfect and co-founder Philip R.
Also at issue were claims by TransPerfect that Skadden had charged excessive and unsupportable fees
on a range of matters, including “fees on fees” billings for Pincus’ and Skadden’s defense against fee
claims, as well as a TransPerfect motion to block Pincus and Skadden from recovering fees for a
While taking the overall issues, including Pincus’ discharge, under advisement, the chancellor also
directed Skadden to provide support in its affidavit for more than $200,000 in billings for what were
described as “the administrative work” of sending a bill.
“Is it typical? I’m not aware of it happening,” the chancellor said. “I’m talking about [billing for] the
actual generation of an invoice and, if you will, running that bill. Give it thought. If it’s your position that
it’s ordinary and that it would be billed to a client ordinarily and permissibly, so attest” in the affidavit.
“If you want to carve that out. It might be prudent to do so.”
Pincus was appointed custodian of TransPerfect after its two co-founders, Shawe and Elizabeth Elting,
had a falling-out and could not agree on how to manage the company.
In May 2018, the Delaware Supreme Court affirmed the chancellor’s February 2018 ruling that allowed
Shawe to buy Elting’s 50% stake in the company. Chancellor Bouchard had also determined that
Pincus’ impartiality wasn’t compromised by threats of litigation made against him by Elting or by
Shawe’s alleged interference in the sale process.
During the arguments Tuesday, Jennifer C. Voss of Skadden, counsel to Pincus, said the expenses had
been prompted by TransPerfect’s and Shawe’s actions, and were handled with the same diligence and
efficiency as that given to all of Skadden’s clients, at rates consistent with its practice.
“Mr. Shawe is an adjudicated serial litigator,” Voss told the court while arguing for Pincus’ discharge.
“Now, years out from closing [on the TransPerfect sale], he has filed a barrage of baseless, unprovoked
attacks against Mr. Pincus and Skadden. These attacks are meant to coerce Mr. Pincus. He has not
succeeded, but they’re also meant to harass him and his advisers.”
Voss said TransPerfect and Shawe “weaponized access to billing statements” for a “punitive and
protracted campaign of fee warfare,” despite Pincus’ right to recover costs as custodian and for
litigation in disputes with TransPerfect and Shawe in the years after the sale.
Much of the dispute Tuesday related to the custodian’s authority to bill TransPerfect for the costs of
responses to or defenses for challenges raised by the company and Shawe.
During the hearing, David B. Goldstein of Rabinowitz Boudin Standard Krinsky & Lieberman PC,
counsel to Shawe, described the billing arrangements as a “fee merry-go-round,” with filings by
TransPerfect and Shawe generating billings from the custodian, objections to the bills and new bills for
addressing the objections.
“The sale of TransPerfect Global closed almost three years ago,” Goldstein said. “At that point,
TransPerfect had already been ordered to pay Skadden almost $13 million, and another $31 million to
[Pincus’] handpicked advisers.”
Fee and other disputes since then have pushed the total to $14 million for Skadden and $45 million for
advisers, Goldstein said, with additional billings pending.
“Our position is these fees are really excessive,” Goldstein said, arguing that the process appeared to
have become a “billing frenzy” without end.
“I’m not telling the court or suggesting that Skadden should get zero,” he said. But “if they got nothing
else, they would have gotten far more than a reasonable amount of fees.”
Voss disputed TransPerfect’s calculations of the billings and costs of the case, and said expenses had
been driven by TransPerfect’s and Shawe’s frivolous arguments, haphazard and mistaken filings, and
pressures for expedited court proceedings. One billing alone, Voss noted, was answered with 100
pages of objections.
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