OPINION
Dear Friends,
Citizens protested outside of the Delaware Governance Institute in Newark campus of the University of Delaware, fighting extreme legal fees and companies moving outside Delaware due to our irresponsible Chancery Court. Please see the story below for more and send your feedback, which is always welcome.
Respectfully Yours,
JUDSON Bennett–Coastal Network
https://delawarebusinessnow.com/2023/10/activist-group-stages-protest-at-corporate-law-event/
Activist group stages protest at corporate law event
Citizens for Judicial Fairness volunteers protested outside the Delaware Governance Institute on the University of Delaware campus in Newark.
The nationally known event at Clayton Hall Conference Center discusses recent trends in Delaware corporate law and features rare appearances outside the courtroom by the state’s chancellor and the state Supreme Court Chief Justice.
The group has been targeting what it views as excessive legal fees in corporate disputes and a lack of Black judges. It also claims companies are moving incorporations outside Delaware, due to Chancery Court actions.
“While corporations leaving the state hurts all Delawareans, it harms Black and Latino residents the most. The all-white institution which makes up the court doesn’t care about this pain to people of color when they scratch the backs of their buddies with legal fees that drive much-needed tax revenue out of our state,” said protest leader Keandra McDole. “We won’t sit in silence without a fight. We need Black judges in our judicial system. For far too long the Chancery has operated with a questionable moral code. Failure to reform this court with judges who are sensitive to Delaware’s diverse communities harms not only the state’s business reputation but also the state’s ability to provide for its people.”
Citizens for Judicial Fairness (formerly Citizens for a Pro-Business Delaware) grew out of a disputed sale of New York-based TransPerfect. Litigation over fees related to a custodian supervising the sale continues after Chancery approved the sale to a co-founder of TransPerfect in 2018.
Do you like that we have gone from being energy-independent to being totally dependent on foreign oil produced by our enemies? Do you like that our oil reserves have been practically depleted? Do you like $4 a gallon for gasoline? Do you like the incredible inflation that is climbing daily with groceries, medications, and many necessary items needed by ordinary Americans to be unaffordable?
Do you like that crime is so bad in most American cities that folks are no longer safe and many once viable businesses are being forced to close? Do you like that our military is being compromised and the ability to maintain our national security is questionable? Do you like that millions upon millions of illegal aliens, including drug dealers and malicious terrorists, are coming into our country at the Southern Border with little or no control? Do you like that over 100,000 American citizens have died from drug overdoses coming from Mexico?
Folks, these outrages are indeed unprecedented and just the “tip of the iceberg” of how bad things really are. There is only one person responsible and that is President Joe Biden who is operating at the whim of extreme left-wing socialists who want to turn the United States into an Orwellian society with a weaponized FBI and IRS that prosecute the Democrat’s political enemies.
Take a look at NY City as a basic example of how bad things are throughout the US. New York, once the greatest City in the world where thousands of illegals are everywhere, sleeping in the streets, completely taking over many hotels, is no longer the “Big Apple.” It has become the “Rotten Apple”. The smell of marijuana is everywhere! The illegals are given food, clothing, cell phones, and much more, while Americans are struggling. They leave trash everywhere, intimidate the citizens, and commit violent crimes. Of course, some of the elites who live in the “silk-stocking” areas are in denial, but soon even they will be overwhelmed as well. This is completely the responsibility of the Democrats that are in charge. Every American City is being denigrated and depleted by horrendous crime because of the poor leadership by this Democrat absurdity.
How do you like Biden’s attempt to destroy female sports by allowing transgender men to participate in these activities? A 6-foot 4-inch male pretending to be a woman recently won the national female swimming championship! How do you like your children being influenced to change their sex by “woke” teachers in our schools without parental consent? Biden has made this transgender crap a major part of his program to the detriment of our children.
Joe Biden is a nefarious criminal who has committed serious crimes, including bribery, influence peddling, and treason. That’s how I see it! I had to laugh when Senator Chris Coons from Delaware (an insipid Biden sycophant), recently stated there was no evidence incriminating Biden of these accusations! My God the evidence is overwhelming and the situation is so horrendous that it boggles the mind. Folks, many of you are completely ignorant of how bad things really are!
Whether you are a Republican, a Democrat, or an Independent, you had better wake up and realize you are slowly losing your freedoms, and these crazy, totalitarian monsters led by Joe Biden are hell-bent on completely changing our country into something we won’t recognize- a place with limited possibilities for prosperity and happiness! Joe Biden is an economic disaster who is destroying our country.
Folks, the dangers are real and in the 2024 election we must remove these grotesque incompetents and criminals from our government.
Stay tuned for an article on Delaware US Attorney David Weiss who it appears has protected and compromised the Hunter Biden criminal activity from proper prosecution. That situation is fluid and without a doubt incriminates his father Joe Biden. That deal should be interesting.
As always your comments are welcome and appreciated whether you agree or disagree with my concerns.
Sincerely yours,
JUDSON Bennett-Coastal Network
Here’s a quick update, folks, on the Delaware front, regarding Delaware Governor John Carney. There are 1,000 TransPerfect employees requesting the relationship between Chancellor Andre Bouchard and law firm Skadden Arps be investigated. I have one question, what has taken so long?
It’s time for Governor John Carney to take a leadership role and clean up our shameful old boy’s club in Delaware. As I see it, folks, this case, and this court-ordered looting is a sham that hurts workers and hurts Delaware, and it has gone on long enough!!
Please read the article below, and let me know your thoughts.
By TransPerfect
On April 14, 2020
Wilmington, DE – Today, a letter co-signed by more than 1,000 TransPerfect Global, Inc. employees was sent to Delaware Governor John Carney, demanding an inquiry into the close, mutually-beneficial relationship between Delaware’s beleaguered Court of Chancery and the law firm of Skadden, Arps, Slate, Meagher & Flom LLP.
The letter comes following several recent motions filed by TransPerfect in the Delaware Court of Chancery alleging that the law firm of Skadden Arps has billed the translation services company for upwards of $14 million in undisclosed legal fees since being appointed the company’s custodian, causing significant financial harm to the company’s employees.
According to recent court documents, in the over two years since the TransPerfect sale process was complete, the company’s Chancery Court-Appointed custodian, Skadden Partner Robert Pincus, has continued to bill the company every month for undisclosed services, including his own $1,475 an hour fee. According to one recent motion by TransPerfect, Pincus’ responsibilities remain unclear, and any efforts to ascertain the substance of his work on behalf of TransPerfect have been met with silence. The Chancery Court has kept all invoices and description of services under seal – allegedly to protect the sale process, which ended over two years ago.
In their call to action for Delaware Governor John Carney, the employees wrote, the “actions of Robert Pincus and his Skadden partner, Jennifer Voss, have hurt TransPerfect. For the first time ever, this spring we will not receive raises. Even worse, many of us who work hourly have had our hours reduced or been furloughed entirely. We are asking for your office to open an inquiry to scrutinize both the cozy relationship between Chancellor Bouchard and his former firm, as well as the Chancery Courts complete lack of transparency and Skadden’s questionable billing practices. These actions and to end this Court-sanctioned looting of TransPerfect. It’s hurting us in irreparable ways. Enough is enough, we need you to step up and investigate this matter immediately.”
Said Chris Coffey, Citizens for a Pro-Business Delaware’s Campaign Manager, “From day one of being appointed TransPerfect’s custodian, Robert Pincus and Skadden Arps have been taking advantage of the company and its thousands of employees by billing them millions of dollars without saying why or what for. These Skaddenomics are so shady, it’s become increasingly clear that Governor Carney needs to step in and scrutinize Chancellor Bouchard, who has been violating his own court’s rules and effectively funneling over $14 million dollars to friends at his old law firm. We’ve called on the Court to put an end to the secrecy, and we’ve called on the state legislature to advance the bill before them that would create a fairer and more transparent Chancery Court by requiring all custodian’s fees to be disclosed. Now we’re calling on the governor to open an inquiry. These thousand employees and our members deserve to have their voices heard. Enough is enough.”
The glory days of Delaware look to be farther and farther behind us folks, as I look into my rear-view mirror. Delaware’s economic struggles have grown, it’s a destination for late-term abortion, unemployment is worsening, the courts are corrupt, members of the legislative are at odds with each other and there seems to be limited compromise.
Delaware was once a place I was proud to say I was born and raised. It is America’s first state — known as the small wonder — a national leader in economic development, first in judicial equity court, great beaches and fishing, no sales tax, and a legislature that always sought compromise.
And to make matters worse, University of Delaware football — my fall weekend escape — has been awful. I have deep pride in the University of Delaware, where I earned a Bachelor’s and Master’s degree. The football team used to dominate Division 1 AA football with occasional big-school upsets. UD’s glory days are gone and I fear the state is following the same path.
Whether you are a Republican, a Democrat, or an Independent, ask yourself: Are you OK standing by while our economic resources dwindle? Are you OK with fewer jobs? Are you proud to be from a state that allows our state’s Equity Court to operate with perceived corruption? Which seems to be overlooked by the Bar Association?
And our courts are in shambles. Chancery Court Chancellor Andre Bouchard has put Delaware in the national spotlight with the way he handled and continues to handle the TransPerfect case. It has really taken its toll on our reputation. It was so bad that many employees banded together to form Citizens for Pro-Business Delaware and now Delawareans have joined in droves with over 5,000 members in the group. They’re going after our courts, asking for transparency and accountability. Finally, a group is actually looking for progress in Delaware, and of course, they’re met with resistance — when there’s a real chance here for Delaware to move forward.
I fear the outlook is bleak as Delaware’s state taxes will have to go through the roof as our corporate franchise taxes are being eroded.
I want to be proud of Delaware — I am no longer!
Am I alone in this? How are you feeling about our once great state??
How ridiculous is this? See the nutty story below for a story that’s not to be believed! It appears to me that the people at Skadden Arps are trying to blame TransPerfect because this law firm has too few attorneys of color in their Wilmington office. I wonder how ignorant Skadden and their former workers Andre Bouchard and Robert Pincus think the pubic is?
The TransPerfect case is still sealed up, two years after it ended and Skadden is still billing them! In my educated opinion, folks, this appears to be an attempt to hide and to divert attention away from their endless money-grab from this company by saying that TransPerfect is somehow responsible for Skadden having not being diverse enough? I don’t understand what’s up with the incessant billing, nor can I get an explanation from anybody on why it is still going on?
Look, at the end of the day, I’m an old guy set in my ways and diversity is not on my agenda of problems to solve in the world. I believe that you hire the person you feel is best suited for the job, regardless of color, race, religion or sexual orientation. As I see it, everyone should be somewhat suspicious of Skadden Arps and those Limousine Liberals that cruise around our justice system.
I’ve been watching this BS for a few years now and in my opinion, it seems they do not NOT value what they say they value. So whether it’s the non-stop money faucet from this company or playing favorites with former Skadden folks, who have moved on to positions of power in the Delaware court system, or it’s diversity in their own workplace, these guys, in my view, are not upfront.
What’s good for these guys is what’s good for them and no one else, as far as I’m concerned. They have a not-so-great track-record, not just in the U.S., but around the world. You think they’re worried about diversity in Delaware? I think they’re worried about money and cronyistic behavior. In my opinion, they’re counting on no one peeking too hard in on little-ole Delaware, while they have their way with court appointments, finances and running the show from Wilmington to Dover and everywhere in between??
I’ve been keenly aware of Skadden Arps because many of its former and current employees were involved in the TransPerfect case, which I have written about over the past few years. This law firm once employed Chancery Court Chancellor Andre Bouchard and former Chief Justice of the Delaware Supreme Court Leo Strine and of course the court-appointed custodian in the case, Robert Pincus.
The firm has doubled-down on that arrogance, in my opinion, by going after advocacy group Citizens for Pro-Business Delaware, after being faced with racism allegations from Reverend Al Sharpton last week. For the record, I can’t stand Al Sharpton! Regardless, Skadden issued a statement saying, while they are open to addressing “this systemic issue,” and they “reject attempts by Citizens for a Pro-Business Delaware” the statement says, “a group comprised primarily of employees of TransPerfect—to co-opt the conversation of diversity and inclusion in Delaware as a means to further their vendetta against our firm and former partner, who we represent in his capacity as the court-appointed custodian who oversaw the sale of TransPerfect.”
So, in my view, they cast blame and accuse wrongdoing while not taking on any blame or admitting any wrongdoing on their part. How about taking responsibility?
The Citizens group fought back, you’ll see in the story below. As far as Skadden is concerned, in my view, this is all shameful. Frankly , this diversity crap is ridiculous from both sides. I have felt that TransPerfect, Philip Shawe, and his mother Shirley Shawe all got a raw deal. Considering the conflicts of interest and in my view, continuing appearances of impropriety, is the real rub here!
By Citizens for a Pro-Business Delaware
Published Jan 7, 2020 at 8:00 am | Updated Jan 7, 2020 at 4:02 pm
WILMINGTON, Del., Jan. 7, 2020 /PRNewswire/ —
Following Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates’ response to Reverend Al Sharpton’s recent call for top law firms, including Skadden, to increase diversity and inclusion efforts, CPBD Campaign Manager Chris Coffey has released the following statement:
“It’s not shocking in the least that the same firm responsible for suppressing the voices of those advocating for basic human rights in Ukraine would now shift its focus towards slinging mud at a 5,000-member grassroots organization seeking to improve diversity in the historically white and male Delaware court system. We spent over $1 million advocating for diversity in Delaware last year. What have they done?
Instead of addressing the fact that out of 72 lawyers in Delaware, Skadden has barely a handful of African American lawyers in a state that’s almost 30% black. Meanwhile, despite hollow promises to change their legacy on this, and be ‘steadfast in their efforts to build a diverse workforce,’ just one of their summer associates in Delaware – home to the nation’s busiest corporate courts – was black.
Skadden should take a long look at themselves and what they can do to be better, more honest, and more inclusive leaders in the legal community before throwing mud at those trying to break the status quo. It’s 2020 and it’s time legal industry leaders like Skadden Arps acted like it.”
I have written extensively about the TransPerfect case, how it was adjudicated, appearances of impropriety and conflicts of interest that I clearly perceive to exist, and the apparent, and in my view, incestuous situation that has developed over the years in Delaware’s “Good Ole Boy” legal system, seemingly protected by the Delaware Bar Association and the Legislature alike.
I have even written an article about what I think a good Delaware Judge should be like and the qualifications needed to be fair and effective. Frankly, I do not think Andre Bouchard should be a Chancellor, nor should Leo Strine have been a Chief Justice of the Supreme Court. For the record, Bouchard and Strine were former business partners in the infamous Skadden Arps firm. One thing for sure, the job of any Judge whether in Delaware or elsewhere is to be fair and impartial. Anything less than that is a form of corruption in my opinion. Never should lawyers, who are friends and former business partners of the presiding Judge, be allowed to enrich themselves through litigation and biased rulings.
That is what I think happened in the TransPerfect case and it is still going on: The purpose of Delaware’s Chancery Court is to dispense equity and fairness, never to enhance those who are or have been personally connected to the Judge. Similarly, Delaware’s Supreme Court, where appeals are considered is also supposed to be unbiased with the recusal of Justices who have possible conflicts of interest. Indeed, I have concluded that conflicts of interest from what I have observed in the TransPerfect case both in the Chancery and in the Delaware Supreme Court might actually exist.
Having observed what I believe are Andre Bouchard’s appearances of impropriety as Delaware’s Chancellor, I was struck and dismayed by the arrogance and rudeness exhibited by Chief Justice Strine in his treatment of esteemed litigator Alan Dershowitz, who was representing Shirley Shawe in the TransPerfect appeal. The upholding of Bouchard’s subjective ruling by Strine et al was flawed in my view and was seemingly an obvious rubber stamp for Bouchard’s unprecedented sanctions and biased rulings. Justice Karen Valihura in her dissent called the Chancery Court’s ruling an illegal “Taking” under the 5th amendment. Regardless, I was concerned by Strine’s apparent superior attitude and in my view pompous administration of his position.
What constitutes conflicts of interest and the need for recusal by the Judge in any legal proceeding? From the National Legal Institute, I was able to glean the following: 1) Any justice, judge, or magistrate shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned. 2) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding. 3) Where in private practice, he served as a lawyer in the matter in controversy, or a lawyer with whom he previously practiced law and served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it. 4) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy.
I was recently contacted by Mr. James Martin, who was once a New Jersey lawyer. He apparently became a victim of an accident while riding his bike, lost his cases in lower courts and claims he was unable to appeal, because of Leo Strine’s conflicts of interest and failure to legally recuse himself. I interviewed Mr. Martin and to be absolutely sure to present his complaint accurately I insisted he give me his story in writing which I have preserved and documented in my archives.
According to Martin, to put it simply, Leo Strine failed to recuse himself when he should have, due to the fact that when he was serving as a government lawyer for then-Governor Carper, there were apparently overlapping issues involving the request for paneling temporary jurists to hear his appeal, because the official justices had already recused themselves. As I understand it, Martin feels that Strine prevented that from happening, creating an ongoing conflict of interest later on, when his appeal was tabled by Strine who refused to recuse himself when presented with absolute documentation of the legal grounds for his recusal. Mr. Martin sent me Strine’s official comment: “Indeed, I had no recollection of the 1996 correspondence until Mr. Martin’s motion brought it up, and even reviewing the letter [which bears my signature] now did not restore any memory of it. I am therefore satisfied that I can hear this matter free of bias.”
Well, folks, I say why not recuse himself and give Martin the benefit of any doubt?? The law is clear in that if there is any possible disparity or doubt, the Judge should recuse. Not Strine, who chose instead to be an ongoing negative force in Martin’s life. In the most recent case, Mr. Martin renewed the Motion to Recuse CJ Strine while he was active earlier this year on the Supreme Court of Delaware. He issued no decision on the Motion, even though it was filed within a few days after the appeal was docketed, and before any briefing. Instead, the case was closed, and the issue about whether a Motion to Recuse may be disregarded, without abridging a party’s due process, constitutional right, is currently docketed in the Supreme Court, at “No. 19-674.”
Folks, the bottom line is, according to James Martin, and if his forwards to me are accurate, Leo Strine had a duty to recuse himself. Indeed, by not doing so he created an unworthy and unjust situation for James Martin. Interestingly, this case is still before the Delaware Supreme Court and it is my understanding there is no statute of limitations. It is also my understanding that this case is in the Guinness Book of World Records as the longest pending case in U.S. history? The bottom line here is that a man who was entitled to a fair hearing and a fair appeal apparently did not get one? Strine, in his apparent arrogance, if indeed Mr. Martin is correct in his claims, did not allocate proper justice.
Leo Strine has recently resigned from the Supreme Court, six years before his term is up. Perhaps, all things considered, it was for the best and I say good riddance. I would be happy to see Andre Bouchard depart as Chancellor as well. As for Mr. Martin, good luck with your pending appeal. Maybe under Chief Justice Seitz, you will receive your long-awaited equity.
As always your comments are welcome and appreciated.
My email inbox was awash with responses from my recent piece “Another Bizarre Ruling From Andre Bouchard’s Chancery Court” and I am so grateful for your feedback. I wanted to share some of your top pieces of feedback below.
It’s gratifying to know so many of you take the time to support my coverage of wrongdoings in Delaware and Andre Bouchard’s Chancery Court.
From Ken:
Bouchard is totally out of control.
The Delaware Judicial system is an incestuous quagmire run by corrupt people.
Keep up the great work.
From Kelly:
Terrible that we have to wonder about our Judges?!
From Maria:
Mr. Bennett, Thank you for the service you do for Delaware. We enjoy your articles.
Glad Seitz got the Supreme Court Justice job and not Bouchard! Hopefully, things will get better.
From Andrew:
It just keeps on happening. Bouchard has got to go!
From Barbara:
Time for change. Hopefully, the Republicans can regain power in the Legislature in 2020. Probably a pipe dream. Something is wrong with the system when there is a question about judicial integrity!
From Mike H.:
This is a truly a bizarre ruling! Bouchard is off the wall and should be off the Court!
From Paul:
Frankly, I think this cozy situation between the Skadden Arps law firm, the State Bar Association, members of the legislature, and the members of the Judiciary is a swamp that smells to high heaven. Whether intentional or not, this development has occurred over time and needs to be changed. Regardless, as long as the Democrats control Delaware, it won’t change!
Keep up the good work.
From David:
I wonder how these idiots can justify their existence? Hope you had a happy Thanksgiving!
From Matt:
Judson, These Judges must hate you. I must say, you have developed over the past 2 years quite a scenario. I was extremely skeptical about this TransPerfect situation. However, you have made a believer out of me. Bouchard has got to go. Pure Absurdity!
From John:
This is outrageous, it seems as if Bouchard is turning contract law and corporate law in Delaware into anarchy and confusion and then the Delaware Supreme Court upholds it? Delaware used to be the best of the 50, no more. Shame!
From Mike C.:
Great work Jud. You should get a Pulitzer for your work on this. What an amazing expose of a case that you have been covering for a long time. I don’t write very often, however, just wanted to give you some kudos.
From Carol:
Judson, Apparently, considering Bouchard’s rulings, it seems that a majority stockholder can act contrary to the rules and the go back and change the rules so he/she can justify their illegal actions? This is crazy, And the Supreme Court upheld it? I am appalled. You have made us aware of these innumerable improprieties by Andre Bouchard. He needs to be investigated! Thanks for providing us with this fascinating stuff.
Thank you all for your comments both by email and on Facebook. Keep ’em coming! Rest assured, I’ll keep you tuned into the latest injustice as it happens!
No citizen of Delaware or objective observer should ever have to wonder about equity and justice in Delaware’s Chancery Court. This Court, as with all Courts, should be absolutely pristine in all matters, with complete transparency. When the entire legal system in Delaware seems to be incestuous with unbelievable connections and apparent influences that create doubt, something is grotesquely wrong.
When it appears a head judge assigns himself a big case because his buddy is the Plaintiff, there should be concern. When a Judge is so biased he accepts evidence from one side and not the other, there is reason to wonder. When a judge makes rulings that are unprecedented and totally subjective, it appears the system is being manipulated. When a personal friend and former business partner of the judge is appointed as a custodian and is allowed to bill unlimited amounts of money without itemization and accounting, there is the appearance of an impropriety. When the defendant is not allowed to see the invoices, what is the Judge trying to hide? When the Judge and the Plaintiff’s attorney go on an educational boondoggle together in New Orleans during the decision-making phase of a trial, there is a conflict of interest and a clear appearance of impropriety.
Throughout Delaware law, it is clearly stated that the appearance of an impropriety is as bad as the impropriety itself. I once read somewhere that: “When justice can be bought, it is worthless. Equality before the law should not be for sale to the highest bidder; rather, it is a living principle that is implemented by designated institutions and must be subject to continuous oversight and scrutiny.”
Folks, that is not the way it is in the state of Delaware. Judicial Corruption is not just simply bribery, it is also when the job is not done as it was intended. Delaware’s Chancery Court is supposed to be about equity, never about enriching personal friends through judicial decisions.
All of the above is what, in my view, has happened in Chancellor Andre Bouchard’s handling of the TransPerfect case. From your responses from my many articles about this frightening situation, it is clear to me that many people in Delaware no longer trust the Chancery Court, its method of operation, and its subjectivity contrary to previously decided law.
When those who serve in the justice sector bend the law in exchange for favors in kind – by losing case files, evidence, or exercise extreme bias by delaying proceedings, issuing questionable sentences, or providing certain litigants preferential treatment – public trust in the institutions of justice becomes truly eroded. Certain lawyers, officials, legislators, and a Chancery Court judge seem to be extremely cozy in America’s First State, and have created a solid establishment that will protect its operation at all costs.
I believe that Chancellor Andre Bouchard has clearly operated with innumerable appearances of impropriety in the TransPerfect case and he should be investigated and removed from the bench.
Let me know if you agree or disagree! As always, your feedback is welcome and appreciated.
Folks, it’s amazing how sunlight acts as a disinfectant for corruption. TransPerfect won the right to see the bills in their Chancery Court case, but I think it’s only because they used a lawsuit in Nevada to successfully shed a spotlight on what Bouchard was doing, which in any other court would be deemed corruption in my view.
After four years, and, from what I understand from sources at the company, $14 million later, he is finally allowing TransPerfect to see itemized invoices from his old law firm, Skadden Arps for work allegedly performed by Chancery Court-appointed Custodian Robert Pincus.
That all sounds nice but the order has not been signed and in my view, there is no chance Bouchard is going to rule against his former colleagues at Skadden Arps and order them to produce a real itemized bill. If he did, he would risk exposing 4-years of court-sanctioned money siphoning from TransPerfect while also risking folks seeing potentially padded Skadden bills.
I think Bouchard wants the public to believe that he is being transparent, but nothing that has happened in this case has been transparent and there is no reason to believe anything would change now. Why has the court-appointed custodian wanted his bills to be hidden in the first place? And why did Bouchard threaten to hold TransPerfect in contempt with a $30,000 a day fine if they didn’t withdraw their lawsuit in Nevada? In my opinion, the only answer that makes sense to me folks is that there is something to hide.
If there is nothing to hide, why is the custodian fighting to keep his bills a secret? Why hasn’t Bouchard ordered him to turn over his bills without lawyers spending thousands of dollars telling him why? The only conclusion I can see is that in my opinion, Bouchard is protecting his Skadden-buddy Pincus.
If the court doesn’t order a custodian to turn over his bills to the company that is paying those bills, then there is no transparency. When will the corruption end?!
Please read the Delaware Business Court Insider article below, which recaps the initial news from Bouchard to open up Skadden’s bills. The story explains the latest events.
As always, your comments are welcome and appreciated.
By Tom McParland | October 21, 2019
Despite being held in contempt last week, TransPerfect Global Inc. has won its Chancery Court bid to access the details of bills being paid to the former Skadden, Arps, Slate, Meagher & Flom partner appointed to oversee the company’s court-ordered sale.
Chancellor Andre G. Bouchard said Monday that he would grant a request by the New York-based translation services company and its CEO, Philip Shawe, to see what type of work it was being charged for, as well as the billing rate, time spent and positions of the Skadden attorneys working on the case.
The ruling, which Bouchard said he planned to formally enter later this week, ratcheted down tensions in a two-state standoff between Shawe’s legal team and attorneys for Robert Pincus, the court-appointed custodian in what has become Delaware’s most vexing legal drama.
The latest spat centered on bills Pincus submitted for some expenses he incurred following the 2015 sale, including costs related to two lawsuits in New York state and federal court stemming from the sale.
Shawe, who won the court-mandated auction following a bitter battle with company co-founder Elizabeth Elting, argued that he should be able to see a full list of itemized expenses, and TransPerfect altogether refused to pay two disputed bills from June and July. The company then sued Pincus in its new home-state of Nevada, seeking a declaration that it was under no obligation to indemnify Pincus for his role as a former tie-breaking director of TransPerfect.
Pincus responded by asking Bouchard to hold TransPerfect in contempt for trying to undermine the Chancery Court’s exclusive jurisdiction over the case.
On Oct. 17, Bouchard agreed that TransPerfect had “intentionally and willfully violated court orders and said he would fine TransPerfect $30,000 per day if the company did not dismiss its Nevada suit by Monday. However, that ruling did not touch on TransPerfect’s gripes about Pincus’ billing.
In a brief telephone conference with counsel Monday morning, Bouchard said he would grant TransPerfect’s request out of “practical concerns” that TransPerfect had raised, even though he disagreed with the company’s legal analysis. Under the order, TransPerfect would be able to challenge the bills in court.
Nothing in the ruling, he clarified, was meant to walk back his ruling on contempt. “There’s a right way and a wrong way to do things,” Bouchard said. “Seeking to undermine the court’s exclusive jurisdiction in the wrong way.”
Attorneys for TransPerfect said after the hearing that they had gotten all they wanted with regard to billing and confirmed that they would, in fact, withdraw the Nevada suit before the end of the day.
Because of the victory today in Delaware, we are withdrawing the Nevada suit,” Shawe’s lawyer, Martin Russo of Kruzhkov Russo in Manhattan said in a statement. “There is no fine, no contempt, and there is finally going to be clarity on Skadden Arps’ billing, as we had called for.”
Shawe, likewise, said the ruling was a “major win for transparency and openness in the Delaware courts” and that Skadden’s billing would now be subject to “some level of review.” A spokesman confirmed that TransPerfect still intended to appeal last week’s contempt ruling.
Skadden, which represents Pincus, said the firm was “pleased with the court’s well-reasoned decisions, which adopt Skadden and Mr. Pincus’s position that TransPerfect and Mr. Shawe are in contempt, were in violation of applicable fee orders, and should be permitted access to invoices, but only in accordance with appropriate procedures.”
Monday’s ruling followed an escalation in rhetoric aimed at Bouchard over his handling of the TransPerfect case. Shawe and his team have been fiercely critical of Bouchard throughout nearly five and a half years of litigation. Last month, however, a TransPerfect-linked group ran a television ad in the Delaware market calling out Bouchard’s wealth and connections as part of a pressure campaign aimed at keeping him from being nominated to an opening on the state Supreme Court.
The Delaware legal community was swift in its condemnation of the ad and its message, calling it nothing more than an unwarranted attack seeking retribution against the chancellor.
Shawe’s spokesman has denied any involvement on the part of his client, and the group’s leader said it had taken no money or direction from Shawe.
Still, Russo said last week that Bouchard has a “bone to pick” with Shawe.
“Why hasn’t the chancellor recused himself,” he asked rhetorically, in a statement.
Bouchard did say Monday that he would wait until at least late Wednesday to officially enter his billing ruling, after David Finger, Shawe’s Delaware counsel, said he would be withdrawing from Shawe’s team.
Contacted by phone Monday, Finger, of Finger & Slanina, said his decision was related to “confidential attorney-client” interactions, but declined to comment any further.
An attorney for TransPerfect said he believed “there is something in the works” and that Shawe planned to substitute counsel within one to two days.
This is outrageous, folks! A $30,000 a day fine for TransPerfect CEO Philip Shawe imposed by Delaware Chancery Court’s Chancellor Andre Bouchard. Look how badly it seems they want to hide these bills! They’re willing to try to override the Nevada court, where this first started. They are willing to throw away a contract that says TransPerfect gets to see the bills and pretend the contract doesn’t exist. And they’re willing to go for “Contempt”charges, which is nearly unheard of! See the New York Law Journal story below for the sordid details.
What is Skadden and Andre Bouchard so desperately hiding? As I see it, we already know they didn’t do the work, which we heard from the testimony from TransPerfect CFO and employees. Are they really that desperate to hide the truth from the public? I’ve never seen such blatant circling of the wagons!
Bouchard and the Delaware Bar Association are in my opinion doing the dirty work for Skadden Arps. The sad truth is that the truth will probably never come out. In Bouchard’s court, protection will set you free, but apparently not the truth. It isn’t so bad if you’re the one being protected, is it?! If you’re not among the protected, you’re done for, apparently? The blatant bias and appearances of impropriety are astonishing in this ongoing, legal saga.
I think this is outrageous! Do you?! Let me know your thoughts.
Scroll down for the story…
By Tom McParland | October 17, 2019
Chancellor Andre Bouchard on Thursday held Philip Shawe and TransPerfect Global Inc. in contempt for refusing to pay the bills of the court-appointed custodian charged with overseeing the company’s forced sale in 2015.
In a 37-page memorandum opinion
(https://courts.delaware.gov/Opinions/Download.aspx?id=296570)
Bouchard said Shawe and his profitable New York-based translation-services company “intentionally and willfully” violated court orders and sought to use a Nevada lawsuit to undermine the Chancery Court’s exclusive jurisdiction over the years-long dispute.
Bouchard’s ruling required TransPerfect to pay all of custodian Robert Pincus’ fees and expenses, and ordered the New York-based firm to pay a $30,000-per-day fine if it does not dismiss the Nevada suit by Oct. 21. If the case remained pending as of Oct. 31, Bouchard said he would consider ratcheting the sanctions even higher.
“Awarding this sanction is particularly appropriate given the intentional and willful nature of the contempt violation, including respondents’ insistence on pressing its prosecution of the Nevada action in the face of the contempt proceedings,” he said. Thursday’s ruling was the latest turn in Shawe’s long-running feud with the Chancery Court and its appointed custodian, even after he secured full control of TransPerfect in a 2018 court-ordered auction. Shawe has been fiercely critical of Bouchard’s
handling of the case and has publicly advocated for increased transparency on the Chancery Court.
Last month, a TransPerfect-linked group ran an ad targeted at Delaware viewers of CNN calling out Bouchard’s wealth and connections in a pressure campaign aimed at keeping him from being nominated to an opening on the state Supreme Court. A spokesman for Shawe has denied any involvement, and the group’s leader said it had taken no money or direction from Shawe.
The latest legal spat centered on bills Pincus submitted for some expenses he incurred following the sale, including costs related to two related lawsuits in New York state and federal court.
Shawe refused to pay, saying that it should be able to access itemized expenses detailing the charges. In August, the company sued in its new home state of Nevada for a declaration that it is under no obligation to indemnify Pincus for his role as a former tie-breaking director of TransPerfect.
Pincus, for his part, called the suit a “vexatious” attempt to justify Shawe’s “flagrant violation” of the Chancery Court’s previous orders, and asked Bouchard to hold Shawe and TransPerfect in contempt by assessing “meaningful” monetary sanctions, as well as an anti-suit injunction to protect the Delaware court’s jurisdiction.
Both sides argued the motion Oct. 10 in a hearing that stretched on for
approximately three hours.
Bouchard said Thursday that the Nevada complaint misrepresented Pincus’ role as a former director, rather than a custodian overseeing the company’s sale.
“Putting aside that this distinction is legally irrelevant to the applicability of the indemnification and compensation provisions in this court’s orders,there is strong evidence … that respondents knew they were concocting a false narrative in portraying the custodian’s role in this manner,” Bouchard wrote.
“Respondents did so in an apparent attempt to circumvent the exclusive jurisdiction provision in the final order … by suggesting that the indemnification provisions in this court’s orders would not apply to the custodian’s service as a director,” the ruling said.
Bouchard said the company and its attorneys then “doubled down” by continuing to press the lawsuit in the face of the contempt motion in Delaware.
Skadden, which represents Pincus, said Shawe and TransPerfect had been “rightly sanctioned” for pursuing “meritless claims” in Nevada.
“Once again, Shawe’s attempt to ’cause pain’ to others through frivolous litigation has backfired against himself and TransPerfect,” the firm said in a statement.
Martin Russo, an attorney for Shawe, meanwhile, slammed the ruling as “devoid of merit.”
“Today’s decision is weak on the law and avoided the pink elephant in the room —Pincus’ steadfast refusal to show the company why it is being billed tens of thousands of dollars with the promise of higher amounts in the future,” he said in a statement.
“The chancellor’s decision today was activism intended to arrive at a conclusion which is not borne out in his orders or the documentation—that is, [that] he now says everything Pincus did as a director was also done as a custodian,” Russo said, promising that “strong appeals will be forthcoming.”
A spokesman for Shawe did not say when or if TransPerfect would begin paying the fines or whether it planned to have the Nevada suit dismissed by Monday’s deadline.
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.
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. – SarahI’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.
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.
I have sensed for years that something was rotten in the state of Delaware’s Court of Chancery, in general, but also specifically as it relates to the TransPerfect case and the missing $250 million in legal, custodian and consultant related fees. I promised my loyal readers that I would find and pull on every loose thread of this case until my perceived web of corruption that belongs to Andre Bouchard becomes totally unraveled for all to see.
This new discovery is going to floor you, and what I believe is the attempted cover up will floor you even more!
Three law firms, from my view, made out like bandits when Bouchard started ordering TransPerfect Global and CEO Phil Shawe’s personal money be paid around to his friends and former law partners like a feudal lord in mid-evil times — and remember folks, no witnesses testified against either Shawe or TransPerfect. These three firms benefited to the tune of millions of dollars whose uncanny “coincidences” and connections to Bouchard warrant a State and Federal investigation of Bouchard and his Cronies:
1. Skadden Arps – The former partner at Skadden, custodian Bob Pincus, whose personal friendship I recall Bouchard bragged about when appointing him. Also, this is where outgoing Chief Justice Strine started in law, as Bouchard’s intern.
2. Potter Anderson – Perhaps, who I believe is the dirtiest attorney in Delaware, Kevin Shannon, who seems to win cases without providing evidence by attending tax-payer financed boondoggles with Strine and Bouchard (who I hear from reliable sources that he golfed with and additionally, traveled to New Orleans with, during critical points in the case!!!)
3. Kramer Levin – Whose seemingly outrageous lies to the Delaware Supreme Court were called out in a nationally televised advertisement. What was their penalty for all of this? A victory. What’s the Bouchard connection? Kramer, Bouchard, and Kevin Shannon all worked together on the infamous Walt Disney case years ago, where they argued against shareholder interests. I have heard from reliable sources, that Gary Naftalis is a named partner at Kramer Levin who comes down to hob nob with Strine and Bouchard; sometimes he’s the only non-Delaware lawyer in attendance at a Delaware conference?
4. Paul Weiss – The fourth firm who made out like John Dillinger — and had no apparent connection to Bouchard…UNTIL NOW!!!
The Fourth Firm—HERE IS THE RUB FOLKS :
This firm, which no one has spoken about until now, in August of 2016, as reported in the New York Law Journal, Chancellor Bouchard ordered Shawe to pay Elting’s lawyers an outrageous and unconstitutional fine of $7.1 million — an order un-related to any “harm” or “compensation” in the case, as the law requires — and the largest such sanction ever in U.S. history. Bear in mind: Shawe denies all claims and has maintained his innocence at all times. All witnesses testified for Shawe–clearly stating that there was no wrong-doing of any kind. How did Paul Weiss win? Keep reading.
Paul Weiss benefits immensely — and no one made the connection before now. Why? Perhaps an orchestrated cover-up on a grand scale?
Who was the most Senior Paul Weiss lawyer in Delaware at the time? Who gained the most in the Paul Weiss DE office? You won’t believe it when I tell you: Former Chancellor Steven Lamb. Bouchard’s first firm, when he left Skadden Arps (if he ever really left – it appears to me he still might have a financial interest in their success), take a seat before reading the next line: Bouchard’s very first firm of his own was: BOUCHARD AND LAMB!!!!
You may not believe me that this is the truth, because it boggles honest minds. Folks, I have done hours of digging and digging to establish the only remaining connection of Bouchard to all the law firm benefactors of the crazy decisions in the TransPerfect case. Irrefutable proof of the Bouchard-Lamb connection is in the link:
The Business of Law: Meet the New Leader of the Court of Chancery
So many dots are connected here. Andre Bouchard has, in my opinion, hit for the proverbial “corruption” cycle ( a baseball term for those of you who don’t know) by helping 4 different law firms, all of which he is intimately connected to! He helped them make millions upon millions of dollars by his seemingly biased decisions from the TransPerfect Global case.
The Cover-Up!!!
Chancellor Bouchard prior to his appointment to the Chancery Court was partners with Stephen Lamb! Stephen Lamb after serving on the Chancery Court himself then moved back into private practice with the law firm of Paul Weiss. Fast forward to the TransPerfect case in 2016 and Kramer Levin hires the Paul Weiss firm to work on the case representing Shawe’s former partner at TransPerfect– Liz Elitng. Specifically, they were hired to work on the allegation that Shawe spoliated evidence which, according to the testifying employees, were NOT able to prove in any way, shape, or form. The bottom line is that nobody needs proof if Bouchard’s court is corrupt and rigged for his cronies to win?
Yet when all the papers were served on behalf of Elting by Paul Weiss, absolutely no mention was made of former Chancellor Lamb’s name. It wasn’t until I was doing some research and saw an article where Paul Weiss was claiming victory, did I notice that one of the attorneys taking credit for the victory was Stephen Lamb! No other public document I can find anywhere even lists LAMB on the TransPerfect case!!! Another coincidence?? In Bouchard’s court, there seems to be a lot of coincidences. Yet, we know from this evidence he was on the team taking Shawe’s and TransPerfect’s money with Bouchard’s help.
HELLO — They brag about his specific role on the Paul Weiss website!?!?!
I will issue a challenge to all those mentioned, who have never denied these inferences: To Chancellor Bouchard, Former Chancellor Lamb, Kevin Shannon, various Kramer Levin attorneys, who in my opinion, boldly lied to the Delaware Supreme Court with no repercussions!
COASTAL NETWORK’S CHALLENGE: Prove to me there was no cover-up and no hidden agenda. Indeed, this is the appearance of impropriety. Show me one official court document other than the Paul Weiss Web Site, that mentions LAMB’s involvement in the TransPerfect case — and I will discontinue this line of inquiry. In my opinion, Bouchard had a legal duty to inform Shawe that he was formerly in business with Chancellor Lamb, He should have recused himself, but he did not! Folks, any reasonable man would see this as a serious conflict of interest.
This is the most damning evidence of corruption, in my opinion, an investigative reporter could find, as it proves to me that this coordinated group had the intent to hide their wrong-doing. There is no other explanation from my educated perspective. How long will we let this infamous boy’s club of incestuous characters operate by sucking the life out of Delaware’s corporations, Delaware citizens, and Delaware’s reputation?! On behalf of the Coastal Network and my 6,000 readers, I again call for a bi-partisan investigation of Chancellor Andre Bouchard by the General Assembly!
Would love to hear your thoughts on this stunning discovery. Your feedback is always welcome.
As I see it, TransPerfect & Shawe never had a chance at fair trial with this what I call “murder’s row” of Bouchard’s cronies…
Scroll down to read this article:
FEBRUARY 13, 2017
“The Delaware Supreme Court upheld the court-ordered sale of TransPerfect Global, Inc. and unanimously affirmed the $7.1 million sanctions award in favor of Paul, Weiss client Elizabeth Elting. Elting and Phillip Shawe are the co-founders and co-CEOs of Transperfect, one of the world’s largest document-translation and discovery-services companies. Since 2014, they have been in litigation in Delaware and New York over the control of the company. Elting is represented by Kramer, Levin, Naftalis & Frankel and Potter, Anderson & Corroon in the corporate-control battle.
In late 2014, Elting tapped Paul Weiss when Shawe revealed that he had secretly accessed Elting’s lawyer-client communications. Paul Weiss then uncovered that Shawe had attempted to destroy files on his laptop, had failed to safeguard and produce text messages on his cell phone, which he claimed was destroyed when it fell in a cup of Diet Coke, and had repeatedly lied under oath about his conduct. Paul, Weiss tried the two-day sanctions hearing and represented Elting in her successful post-hearing briefs and in defending against Shawe’s sanctions appeal.
The Paul, Weiss team included litigation partners Eric Stone, Robert Atkins and Stephen Lamb, of counsel Gerard Harper and counsel Robert Kravitz.”
I am asking you to click on this link and watch this video:
Please take a quick look and let me know what you think. I am preparing a feedback piece. Send your comments as soon as you can, as the response has been strong! I would like to thank the legislators who have responded as well, and I want your voice to be heard too!
15 minutes into it you will see me asking a probing question.
I believe that Delaware’s absolute, basic, economic, moral, and ethical future is at stake here!
The link will take you to a video showing the beginning of an important movement! It started with a press conference (shown in the video) that is going to affect the future of Delawareans for years to come!
I attended the press conference in front of the Court House in downtown Wilmington, Delaware on July 10th. The “Citizens for Pro Business Delaware” event was led by their Chairman, Chris Coffey.
Thank you for taking the time to view this important video.
Your comments are welcome and appreciated!
JUDSON Bennett-Coastal Network
My onsite coverage of the “Citizens for Pro Business Delaware” 100+ person press conference has paid off for Coastal Network readers. From an anonymous source, I have obtained a video of the entire July 10 event held right in front of Bouchard’s Chancery Court in Wilmington, Delaware.
It was an energetic and well-attended press conference, presided over by anti-corruption activist Chris Coffey, the campaign manager of “Citizens for Pro Business Delaware.” Others spoke too, including Donna White, an African-American woman who was terminated from her job at the Chancery Court for sending an email asking if Mark Zuckerburg would look at her App!!?? Meanwhile Kevin Shannon and Chancellor Andre Bouchard golf together during the case, travel to New Orleans together during the case, and I believe decided this case at the Country Club. It certainly wasn’t decided in the court room with no witnesses appearing for Shannon’s side, folks. That’s how I clearly see it.
As Coffey puts it, Bouchard and his cronies in the Delaware Old Boys Club “get away with murder” each and every day compared to what Donna White did, yet she was escorted out of the building and treated like a criminal–given only 10 minutes to collect her belongings and to say goodbye to co-workers of 7 years!?!
The double standard, hypocrisy, and potential racism here only rivals the ageism, sexism and contempt that Chancellor Bouchard and 4 out of 5 justices on the Supreme Court (all the male judges) showed litigant Shirley Shawe in the TransPerfect debacle. How could it be that female, senior citizen, Shirley Shawe’s only victory in the first 5 years of this entire case was from a woman jurist, Delaware Supreme Court Justice Valihura? It’s mathematically impossible that this is a coincidence, as the Good Ole Boy cronies would have us believe. They are making millions off innocent shareholders with their back-room Country Club deal, scratching each other’s backs, and trading favors with their rich and powerful friends. And what happens to Chancery’s real life victims like Donna White? She has been denied health insurance and unemployment benefits! I’m telling you folks, I believe Andre Bouchard is not only corrupt, but also sadistic–and, in any case, lacks any shred of the ethical fiber required to fill the Chancellor position. The great state of Delaware deserves better. Listen to the press conference, where Donna takes the podium and tells her story here…
I asked a question of Coffey during the press conference, which I wrote about in my last column. You will see that here, as well as other suggested anti-corruption reforms that appear like common sense to this journalist. The Delaware Citizens group now fighting for reform has 2,700 members which includes TransPerfect employees who were negatively impacted by Bouchard’s decisions along with other concerned Delawareans.
By the way, I commend the Delaware Business Times for covering the major events of July 10th, and I wonder which Ole Boys Club member or creepy Skadden Arps friend of Bouchard called the News Journal to get them to kill the story? Brent Celek from the Philadelphia Eagles and Colin Jost from Saturday Night Live came to Wilmington and joined those calling for Chancery reform at the Hotel DuPont. How is it you can Google the News Journal’s entire site, and read nothing about this important day at the Chancery Court? Mark my words, Bouchard and the “Limousine Liberals” who run this state and prey on its citizens are powerful, so powerful, they are dangerous to Delaware, to anyone who incorporates here. But fear not, the Coastal Network cannot be intimidated into killing stories or masking the truth–stay tuned here folks, for coverage on Chancery actions and other injustices in Delaware.
As of press time, I know of no other media outlet who has obtained this tape. Enjoy watching the coverage and share it with folks who may want to see it.
Why have evidence or witnesses to make your case in Delaware’s $250 million TransPerfect fiasco? When your name is Kevin Shannon, and your friends are wearing the robes, in my opinion, you don’t need evidence or witnesses — cause you have the game rigged in your favor.
If this isn’t illegal, it surely ought to be. Frankly, I see this as a disgusting and disturbing view into how our Chancery Court apparently now works?
After following Andre Bouchard’s first couple of years, which I viewed as suspect, followed by his mismanagement of the TransPerfect Global case, I decided to Google the names of the folks involved in the case to see if my suspicions were correct. Were there actual conflicts of interest and personal connections?
Folks, please look at the boondoggling schedule I was able to come up with by doing that digging on Google: Kevin Shannon of Potter Anderson, with Andre Bouchard (well-documented BFF) and Leo Strine, in and around the 5 years of shame related to the TransPerfect case.
I could write a serious diatribe about how corrupt this appears to be, just by referencing the Delaware Judicial Cannons, which are clear and on point, but I will let the dates and facts speak for themselves. How dumb these people must think the Delaware public is??!
Folks, after looking at the facts, it is hard to fathom for me — and should be for any reasonable person — when seeing the incestuous relationships between these individuals and their conflicts of interest, that this judicial arrangement, which apparently is condoned by the Delaware Legislature, is just plain wrong!!!
To add insult to injury, for Bouchard and Strine, this boondoggling is on the tax- payers’ dime.
Look for yourself:
(and these are just the one’s we know about from Google?!?)
Shannon and Strine (and only 2 others)
Shannon, Strine, and Voss (works with Pincus at Skadden)
There you have it folks — clear evidence of these incestuous connections and when you put these relationships together with the actions of the same players combined with the rulings from Bouchard and Strine and then add the former business partner from Skadden Arps, Robert Pincus, into the mix as the appointed Custodian in the TransPerfect case, all working in unison to seemingly profit from the case. I cringe at the obvious appearances of impropriety and the possible corruption. There should be no doubt about the integrity of these Courts. Unfortunately, they are suspect and it is right in our faces!
I urge you to contact your legislators and tell them about your concerns! This will be an issue in the 2020 election.
Breaking news folks, in a recent survey released by Slingshot Strategies LLC, confirms what I have been reporting on for years. There are a large number of Delaware voters who are dissatisfied with Andre Bouchard’s Chancery Court. Importantly, 79% of Delawareans believe Andre Bouchard should have been forced to disclose his pre-existing, 20-year BFF friendship with TransPerfect Global co-founder, Elting’s counsel, Kevin Shannon of Potter Anderson.
Additionally, the Delaware citizenry apparently agrees that conflicts of interest clearly exposed, not sealed up by a judge who could be abusing his power, in regard to the appointments of custodians. Bottom line folks, the Delaware people, in my opinion and in my assessment of these poll results, are not happy with Andre Bouchard and the rampant cronyism that has defined his tenure.
Recently, folks demanding greater transparency from Bouchard in his Chancery Court at a Bar Association Brunch were forced to leave by security, not only the event itself, but the parking lot as well. Is this the Chancellor’s latest bid to thwart activities protected by the United States Constitution?
Frankly, these poll results are unfortunately gratifying in a way because, in my opinion, a vast majority of Delawareans believe that Bouchard’s shady, illogical rulings in the TransPerfect case — supported by his former intern Leo Strine — in a nonsensical majority opinion — are improper. Our once-renowned Chancery Court is now infamous for corruption in my opinion.
Delaware, having dissipated from #1 to #11 for judicial equity in a national survey conducted last year by the United States Chamber of Commerce — is losing corporations to Nevada because many business people are concerned about potential subjective rulings coming out of Delaware’s Chancery Court these days?
Yes folks, having watched Chancellor Bouchard very closely from the time he was appointing various people to the Deputy of the Register of Wills job (before he found one that could actually do the job), having read all the transcripts from the TransPerfect case, and having interviewed many people, I am convinced beyond a shadow of doubt, the longer Bouchard holds office, the worse off Delaware will be.
Please read the article below published by Yahoo Finance, citing “widespread dissatisfaction” with Bouchard’s Chancery Court.
DOVER, Del., June 24, 2019 /PRNewswire/ — A staggering amount of Delaware citizens have expressed dissatisfaction with the Chancery Court’s proposed reforms and the state government’s transparency, according to a recent survey.
The survey, released in April by Slingshot Strategies, LLC., noted 79% of Delawarevoters and 77% of registered Democrats demand judges to disclose relationships with lawyers. In addition, about 70% of both Delaware voters and registered Democrats propose custodians to disclose conflicts of interests to the general public. The sweeping support for additional disclosure from the Chancery Court is heavily linked to the overwhelming frustration citizens have for the state government.
According to the survey, 92% of voters agree that the state government is dishonest and 58% believe it is nearly impossible to hold local politicians accountable for their actions. Almost 50% feel helpless in the fight for their voices and concerns to be addressed, due to political bias and nepotism in Delaware politics.
Citizens for a Pro-Business Delaware have demanded more transparency, equity, accountability and freedom of speech from the Chancery Court, only to be denied such basic Constitutional rights. On June 14, 2019, Citizens for a Pro-Business Delaware volunteers were forcibly removed from the Delaware Chancery Court after using their First Amendment rights to request transparency. While the group was denied the right to distribute information to those most closely associated with the Court system, Citizens for a Pro-Business Delaware will continue to bring their push for accountability to the residents of Delaware through media advertisements in the News Journal, as well as other local media.
Influential leaders such as Chancellor Bouchard halt Delaware Chancery Court reform and Delaware’s reputation as a hub for headquarters and businesses are being negatively affected. Citizens for a Pro-Business Delaware is committed to exposing the clandestine processes of Delaware’s Chancery Court. “The long-standing corruption and white washing of justice in the Delaware Chancery Court is abhorrent and unethical,” said Miranda Wessinger, president of the Citizens for a Pro-Business Delaware. “The citizens of Delaware deserve transparency and accountability from local political leaders. Our efforts to serve the Delaware people will not be impeded, regardless of the bureaucratic push back. We are determined to keep Delaware’s reputation as a thriving and profitable business state.”
Citizens for a Pro-Business Delaware is a group made up of more than 2,700 members including employees of the global translation services company TransPerfect, as well as concerned Delaware residents, business executives and others. They formed in April of 2016 to focus on raising awareness with Delaware residents, elected officials, and other stakeholders about the issue.
While their primary goal of saving the company has been accomplished, they continue their efforts to fight for more transparency in the Delaware Chancery Court. For more information on Citizens for a Pro-Business Delaware or to join the cause, visit DelawareForBusiness.org.
The wave of public opinion demanding that Chancellor Bouchard be held accountable, for what I and many others view as illicit activity, is transforming into a full-blown tsunami. Below, I have chosen 10 recent responses to share with you, but I could be sharing 100.
As you will read below, the groundswell of Delaware citizens who are writing to me about being fed up with Bouchard seemingly feathering the nest of his former law partners at Skadden Arps and other cronies, have reached a fever pitch. What seems to be bothering them most is the perception that his personal patriarchy has profited for too long at the expense of Delaware corporations, Delaware taxpayers, and Delaware’s now tarnished image. Chancellor Bouchard’s actions have convinced me (and many of my readers) that he seems to lack the ethical character required for the job, to put it mildly.
My readers are expressing outrage in droves, and are all Delaware voters. I wonder how long the elected members of our General Assembly can continue to turn a blind eye to the public’s demand for anti-corruption and transparency controls to be placed on the Chancery Court?!?
Recently, Delaware’s “Judge Evil” (as I like to call him), the Chancellor, ordered yet another successful company dissolved for “dysfunction”. In laymen’s terms this appears to simply be executives fighting on email. So Delaware corporations likely should worry if they happen to write an email the Chancellor may find concerning. Heck, he could decide to take out a company, dissolve it, or sell it off subjectively any time he feels the urge! Funny how much Skadden and/or his other cronies seem to profit when this happens??
Bouchard’s pattern of illogical and unprecedented decisions, enriching his “Good Old Boy” network of elites, now includes Inspirion Delivery Services, LLC. In my recent article titled “Delaware Chancellor Bouchard Orders Another Delaware Corporation Dissolved-Bad for Business”, I pointed out Bouchard’s most recent act of judicial over-reach, further inequities of his seemingly capricious decision-making, and his seemingly blatant hubris resulting in grotesque appearances of what appears to be impropriety.
As it turned out, this piece resonated deeply with you, my dear readers. The TransPerfect case — where millions of dollars in invoices are still being hidden by Bouchard’s apparent abuse of power, now has Delaware citizens fervently demanding reform.
I appreciate your feedback so much, and the only thing I appreciate more, is your zeal in calling for legislative reform. The people have spoken: They are saying in so many words: “The unchecked power of Bouchard’s Chancery Court is unconstitutional and bad for Delaware business.” Now, they must be heard in Dover!
Again, I have received countless responses; here are 10 samples, but they are reflective of a greater anti-corruption and transparency movement by my readers. I have removed my readers’ last names for their protection because in my opinion the “Good Old Boy” patriarchy that runs Delaware is a powerful and vengeful bunch.
Thank you for your feedback! Keep ’em coming.
1) From Abner
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Judson, This guy sounds worse than the rotten deep state that has attacked our country and tried to overthrow the government. Typical Democrat move by an incompetent JUDGE! Keep up the great work exposing this bastard! ABNER
2) From Linda
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
My God, does this guy ever stop with his corruption — right in the face of all of us. So much arrogance, so much hubris.
Thanks for keeping us updated. Linda
3) From Brian
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Jud,
How the hell can the State Legislature close their eyes to this?? It seems as if Chancellor Bouchard hurts companies instead of helping them. Certainly not good for Delaware’s business or future. So terribly absurd! Keep up the good work. Love your articles. Best regards, Brian
4) From Archibald
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Hey Judson, The corruption in the Delaware Judiciary has been going on for years. The Democrats have become so blatant with it, it is apparent for all to see. Unless we get rid of this Status Quo Legislature, nothing will change. Another Delaware incorporated company will bite the dust at the hands of Bouchard. He has got to go! Keep up the good work you do. Archie
5) From Bob
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Judson: When a judge withholds public documents that the people have a right to see, all kinds of red flags go up? When a Judge colludes with an attorney involved in a case he is presiding over, it is criminal. I can remember being so proud of being a Delawarean, but no more. It is hard to believe that our state has become so business unfriendly! It used to be there was compromise, and reason, and yes justice. The likes of these Skadden Arps former lawyers and their collusion with each other is outrageous! “Inspirion Delivery Services, LLC” looks like another bad decision by this crazy Chancellor. This is simply outrageous. Keep the articles coming, maybe the boys in Dover will blink when they realize their jobs are in trouble. Keep up the pressure! BOB
6) From Jack
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
IMPEACH BOUCHARD! VOTE REPUBLICAN!
7) From Charles
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Judson, you are really shaking things up and the people are talking. Subjective rulings without logic or standing on decided matters is bad business and is basically creating new law-“legislating from the bench.” Why haven’t the Philip Shawe people filed for FOYA Requests to get the records? It will be interesting to see if Bouchard continues to feather his cronies’ nests? Keep up the good work. Charlie
8) From Carol
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Wow, more of the same. This business with TransPerfect and now another fiasco in the Chancery Court. I can’t believe what a blind eye these liberal jerks in our state house have. Unfortunately, if the people in Washington think there is a Swamp-check out Delaware—IT IS PURE QUICK SAND ! Thanks for your efforts JUD. Keep the bastards thinking. Great work! Best regards, Carol
9) From Ed
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Why would anybody want to incorporate in Delaware, when the Chancellor can sell your company out from under you? Seems like things are going from bad to worse. If Delaware loses its franchise taxes, the red hole will be so deep, “Hades” will be a cool place in comparison. Keep exposing this jerk Judson. We love your articles. ED
10) From Adrian
Subject: Delaware’s Chancellor Bouchard Orders Another Delaware Corporation Dissolved-BAD FOR BUSINESS?
Dear Mr. Bennett,
As a small business owner incorporated in Delaware I am extremely concerned. It is beyond me why the legislature which is controlled by the Democrats is so business unfriendly. Eventually, the bottom is going to fall out if Chancellor Bouchard keeps creating these untenable situations. You don’t force the sale of a company because of stock holder or director disagreements.. Might have to reorganize in Nevada! I appreciate your great writing and your guts. Thank you! -Adrian
I thank you for your many responses. Please keep them coming.
I implore you to carefully read the 2014 National Review article below entitled, “The Strine Strain: Some Judges Take a Toll on Justice.” As I’m sure you’ll remember from my articles (because no one else will cover it), Strine was BOUCHARD’S Intern. Many Delawareans I have talked with think this relationship is somehow OK (debatable) because it was the other way around. I’m telling you, it is not! When they were both at Skadden Arps, Chancellor Andre Bouchard was the big-boss-man over our Chief Justice/Intern Leo Strine — and, as you’ll see from this article, the apple didn’t fall far from the poisonous tree.
For those who think I am alone and whimsical in pushing for drastic judicial reforms, with “radical ideas” such as the disclosure of court-ordered bills as required by law, the random assigning of judges to cases, disclosure of relationships (like Bouchard and the infamous, Kevin Shannon of the TransPerfect case), and jury trials to put a check on the Chancellor’s sweeping power, which are so omnipotent that they are ripe for abuse. See the article below from The National Review in 2014. Please note, I’m neither condoning or condemning the controversial author, but he’s obviously highly-educated, articulate, and understands firsthand what I, and many of my readers view plainly as a pattern of corruption by Delaware Chief Chancellor Andre Bouchard.
He writes: “After Strine enthroned others in control of our companies, his protégés enriched themselves obscenely and the companies eventually went bankrupt, wiping out $2 billion of shareholders’ equity dispersed among average people in every U.S. state and Canadian province.” Sound familiar, like another victim of the infamous Bouchard-Strine two-step tango that saw the court’s close friends at Skadden seemingly abscond with over $25 million in fees for “undisclosed services” as was implemented by the “court- ordered custodian” in the TransPerfect case.
When you read this, remember, this article is just about Bouchard’s Intern Strine. Bouchard was astonishingly permitted to help Strine elevate his personal career when Bouchard was on the Judicial Nominating Committee of the Bar Association. Then disgustingly, one hand washed the other, and Strine returned the favor by elevating Bouchard. Now, as I see it, the true Skadden Arps (puppet) master of enriching Delaware good ole boy cronies is now our Chief Chancellor, Andre Bouchard. God help us — absent judicial reform.
By CONRAD BLACK | February 19, 2014 9:00 AM
The elevation of Leo E. Strine, the chancellor in Delaware’s Chancery Court, which is the principal corporate-law court of the United States, to chief justice of Delaware would not normally attract much comment. Delaware is one of the smallest and least populous states and is chiefly known as a place of incorporation and for the historic presence of the du Pont family and the DuPont chemical company. (Pierre S. “Pete” du Pont IV was a recent and well-known governor.) Because Delaware became the preferred place of incorporation as the American industrial and financial boom lifted off after the Civil War, it has had great importance as a commercial jurisdiction. Leo Strine — a well-connected Democrat and former aide to a Democratic governor, current U.S. senator Thomas Carper — served 15 years on the Chancery Court, three as head (chancellor) of it, and built a reputation that extended throughout the corporate community of the United States and beyond, as a sometimes controversial, outspoken, whimsical, and decisive judge.
None of these need be negative characteristics, but he is, in fact, a hip-shooter, who fancies himself a very blithe wit and feeds on the sycophantic laughter of counsel and their clients appearing before him. He follows cases closely, produces verdicts and judgments promptly, and clearly possesses a sharp intelligence, but he has periodically lapsed into discursive speculation on irrelevant subjects, including in one instance the religious affiliations of contending parties (without implying any bigotry, but with a distracted concern for matters unrelated to the case). He was rebuked by the court he will now head, when the state supreme court reminded judges not to use their positions in trials as “a platform from which to propagate their individual world views on issues not presented.” Strine frequently reveals himself as a fervent sports fan and engages in popular-culture references that do enliven his interventions and even decisions, as if to fortify his unprepossessing Mr. Peepers appearance.
There is not really anything wrong with any of this either, and judges could often do with a little loosening up, as they often affect undue severity in their dickies and robes and on their elevated platforms where they rule with almost unquestionable authority. In fact, complaints of this kind disguise the real problem with Strine: that, while he is intelligent and quick, he is a compulsive attention-seeker and often says injudicious things and produces bad and unjust judgments. He, like a significant number of judges, but more vividly than all but a few, is like a hyperactive version of F. Scott Fitzgerald’s description of the rich drifters of The Great Gatsby: “They were careless people. . . . They smashed up things and creatures and then retreated back into their vast carelessness . . . and let other people clean up the mess they had made.” As his spouting of contemporary pop-culture jargon portends, Strine is trendy, and combines Bacon’s famously disparaged “much-talking judge” with the contemporary description of much of the bench as “the Zeitgeist in robes.”
Readers will discern that I speak from experience. I testified in Strine’s court at length in a case where companies controlled by my associates and me were involved. He signaled clearly in the preliminary meeting with counsel that he had already determined the case against us and my counsel advised me to fold and act otherwise against our opponents. With no optimism about the outcome of the impending trial, I concluded that that would produce the same result with the additional appearance of cowardice on our part, and the case proceeded. He was perfectly courteous to me as a witness and we even exchanged a few quips and a bit of jaunty badinage, and he has subsequently referred to me quite politely, even with the affected comradeliness of a former adversary whom he bested. But he wrote a judgment that did extreme damage to the interests of tens of thousands of shareholders and was largely debunked in subsequent proceedings in various courts, including a four-month criminal trial. After Strine enthroned others in control of our companies, his protégés enriched themselves obscenely and the companies eventually went bankrupt, wiping out $2 billion of shareholders’ equity dispersed among average people in every U.S. state and Canadian province. The faction he upheld at trial — to Strine’s professed amazement, as any indication of his fallibility seems to amaze him — ultimately agreed to a $5 million (Canadian) settlement of my libel suit, by far the largest such payment in Canadian history, as part of an overall resolution, in my favor, of a complex of related lawsuits.
I certainly cannot blame Strine alone for the fact that I was wrongly convicted and sent to prison for three years, before the charges that he had helped to generate were abandoned, rejected by jurors, or unanimously vacated by the U.S. Supreme Court. Injustices occur, and given the correlation of forces between the U.S. government (and its Canadian Quislings) and myself, I did well to put it behind me as soon as I did. (Prosecutors were seeking life imprisonment and $140 million in fines and restitutions, and finally got three years and two weeks, and $600,000. And Richard Posner of the Seventh Circuit Court of Appeals in Chicago, the dean of all flippantly opinionated American judges, had to retrieve two counts to achieve even that for the prosecution Strine effectively solicited.) I am personally philosophical, found my time in prison quite interesting, and even enjoyed a few aspects of it, especially helping over a hundred students to matriculate from secondary school. It was completely unjust that I was there, but I tried to make the best and most of it; and the world is not a rose garden for anyone.
My point is not personal bitterness toward Strine and Posner, though my regard for them is not unlimited. My grievance is that these two, and an appreciable number of other judges, simply bang down their gavels, bring down resonant and histrionic decisions that are apt to be completely mistaken and to inflict injustice, and continue in their terminal self-absorption. When we first appeared before Posner, he seemed not even to have read our papers, and much of his fatuous judgment that would soon be shredded by the high court was a description, in reference to the so-called Ostrich Rule, of the habits of the ostrich. Strine acknowledged in his judgment against us that a reasonable person might find entirely differently, and reasonable people eventually did, though Posner, not being in that category, was not one of them. The U.S. Supreme Court was. But Strine and Posner and similarly wired judges just drive on, never apparently reflecting on the impact their capricious decisions have, or wondering if a little Solomonic deliberation might better serve society or even enhance their ultimate reputations as jurists.
Posner, at least, was frustrated in his ambitions to reach the highest court; he blamed this on his advocacy of legalized marijuana, though such brainwaves as his proposal to make the adoption of children straight financial auctions might have had something to do with it. He has, in his irritation, taken to public criticism of the U.S. Supreme Court, sometimes justly. But his complaint that the justices of that court interrupt counsel too much is a bit rich; at our first appearance before him, though my counsel was a very respected former deputy solicitor general of the United States, Posner allowed him to complete only 15 percent of the sentences he initiated. His manner was querulous, antagonistic, and boorish. Justice Scalia called him a “liar,” and in our case he was censured by the whole Supreme Court, in a judgment written by Justice Ginsburg, for “the infirmity of invented law.” No doubt he has had his moments, but he has been drinking his own bathwater for decades and he must subside soon.
Strine, who is approximately 50, cannot possibly imagine that his career ends in the highest court of the dollhouse state of Delaware. Both judges should wear bells on their heads like medieval lepers to warn the unsuspecting of their approach. They are a menace, not because of lack of ability, but because of helpless thralldom to their own self-worship. Strine claimed in his confirmation hearings that he wished to fortify Delaware’s status as America’s premier corporate jurisdiction. Doing so will require a miraculously successful lobotomy or the greatest revelation since Zechariah was struck dumb in the Temple. Failing such astounding developments, corporate America should decamp, to other countries, and certainly to other states, as Delaware will pay for his elevation.
— Conrad Black is the author of Franklin Delano Roosevelt: Champion of Freedom, Richard M. Nixon: A Life in Full, A Matter of Principle, and the recently published Flight of the Eagle: The Grand Strategies That Brought America from Colonial Dependence to World Leadership.
When it comes to corruption in Delaware’s Chancery Court, the public must now assume: where there is smoke, there is fire!
According to a recent complaint in Federal Court, TransPerfect’s #1 competitor was invited to participate in the “auction” — but instead the competitor seems to have used the Chancery’s “airtight” auction process as a massive platform to steal TransPerfect’s trade secrets. So much for the public expectation of Delaware’s Chancellor Bouchard to comply with his sworn duty to protect Delaware companies– APPARENTLY NOT!
Some conspiracies fly under the radar because they are too complicated to garner the appropriate attention, but remember folks, these judges, lawyers, and good old boy Delaware elitists are sophisticated actors — it’s no coincidence that $250 million was spent on lawyers and custodial fees.
Behold the following facts:
1. HIG/Lionbridge is TransPerfect’s #1 competitor.
2. Custodian Pincus of Skadden Arps allowed HIG/Lionbridge unfettered access to hundreds of thousands of corporate documents, including the most guarded secrets of TransPerfect.
3. HIG/Lionbridge is a client of the Skadden law firm.
4. HIG/Lionbridge is a client of Credit Suisse (but abruptly switched sides to “represent” TransPerfect for Pincus).
5. HIG had a loan with Credit Suisse, so IF Credit Suisse could have swung the auction results to HIG/Lionbridge, it would have helped Credit Suisse. They call this a “conflict of interest.”
6. The “conflict of interest” would normally have called for Credit Suisse to resign, but something made them feel protected enough not to resign.
7. Skadden Arps alumni include none other than: Chancellor Andre Bouchard, Custodian Robert Pincus, and Chief Justice Leo Strine (Bouchard’s former intern).
The above information is gleaned from my two years of research in following all the details of this case. If you think I may have the facts wrong, then please read the following link below: publicly available in a New York Supreme Court filing:
https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=qvdJYpXr7_PLUS_7tMrkT9_PLUS_oWMg==
Is all this just coincidence? But folks, we must ask ourselves is the $250 million dollars spent and distributed among Bouchard’s cronies and former business partners (Skadden Arps Law firm) a legitimate situation?
Credit Suisse is also more likely to be paid back on their HIG/Lionbridge debt, if HIG/Lionbridge got a leg up in the competitive market for translation by getting its hands on all of TransPerfect’s trade secrets, including detailed client information, and including decision-makers and price lists.
Perhaps the alleged trade secret theft happened with HIG/Lionbridge acting on their own, but given all these connections, perhaps not. You decide! Please read the article below and send me your feedback. Your comments are welcome and appreciated.
By Pete Brush
Law360, New York (April 15, 2019, 5:47 PM EDT) — TransPerfect Global has sued rival translation company Lionbridge Technologies and private equity firm H.I.G. Capital for $300 million, claiming in Manhattan federal court that they exploited a court-ordered sale of TransPerfect equity to lift trade secrets.
The Thursday lawsuit, pending before U.S. District Judge Denise L. Cote, claims that a unit of Miami-based H.I.G., H.I.G. Middle Market LLC, engaged in “fake bidding” during the $770 million sale of a 50% stake in New York-based TransPerfect to help Massachusetts-headquartered Lionbridge gain an unfair advantage.
“For H.I.G., losing the auction was not a defeat because it was able to accomplish its refocused goal to gain an unfair competitive advantage over [TransPerfect],” the suit says.
H.I.G. and Lionbridge had discussed a go-private deal in 2016 that could have seen the private equity firm take control of both companies and permitted Lionbridge to “solidify its position as the dominant translations services provider worldwide,” the suit says.
H.I.G. completed its acquisition of Lionbridge in early 2017. But, according to the suit, even though TransPerfect co-founder Philip R. Shawe later that year won the auction for the TransPerfect stake, H.I.G. and Lionbridge still profited by gaining access to secrets that were pilfered from what should have been an airtight process mandated by a Delaware business court.
Credit Suisse, which handled the auction and is not a party to the lawsuit, “failed to take meaningful steps to protect the company’s confidential information, and defendants were permitted to freely interview
[TransPerfect’s] management and downloaded [its] top client lists, pricing information, commission schedules, employee files, and sales strategies,” the suit says. The suit adds that Credit Suisse owns Lionbridge debt and was “incentivized” to help H.I.G. shore up that debt.
H.I.G.’s conduct also delayed completion of the sale to Shawe and disrupted the plaintiff’s business, the suit says.
The sale of TransPerfect assets stemmed from a dispute between Shawe and company co-founder Elizabeth Elting over how to run the company that dates to 2014. H.I.G. improperly contacted Elting during the asset auction and assisted her in objecting to the sale to Shawe, the lawsuit says.
Lionbridge continues to use TransPerfect’s proprietary information to compete unfairly, according to the suit. TransPerfect seeks injunctive relief as well as damages, including punitive damages, in excess of $300 million.
Requests for comment from Lionbridge and H.I.G. were not returned. A lawyer representing TransPerfect declined comment. Credit Suisse declined comment.
TransPerfect is represented by Andrew Goodman of Garvey Schubert Barer and Martin Russo and Sarah Khurana of Kruzhkov Russo PLLC.
The case is TransPerfect v. Lionbridge et al., case number 1:19-cv-03283, in the U.S. District Court for the Southern District of New York.
–Editing by Amy Rowe.
By Charlie Taylor
APR 2, 2019, 11:56 PM
When I first followed the happenings in Delaware as it pertains to how its incorporation business is run, I took issue with the Chancery court’s odd set of decisions in the corporate breakup of TransPerfect, an international translation firm with 75 employees in its Tel Aviv office. Now, after following this court system more carefully, I take issue once again with the recent decision by its Chancellor Andre G. Bouchard in the case of Charles Almond as Trustee for the Almond Family2001 Trust v. Glenhill Advisors – a case that challenges the merger of Design Within Reach and office chair maker Herman Miller. What I wish to convey here is that new businesses – Israeli startups – should not put their corporate eggs into Delaware’s Chancery Court basket, and maybe look elsewhere to incorporate – like Nevada, for example. The court’s decisions puts investors at risk, and without investors startups may have a hard time growing.
Here the Delaware Court of Chancery has constricted shareholder value within Delaware corporate entities and is once again making questionable legal decisions.
Let’s back up – From 2014-2018, I followed closely the TransPerfect case – a case in which co-founders Philip Shawe and Elizabeth Elting fought over control of their then-$500 million business (the company generated over $700 in revenues million since Shawe was awarded full control of his company in 2018). In this case, Chancery Court Chancellor Andre Bouchard ordered a profitable, fully functioning, successful company be put up for auction and sold to the highest bidder as if it were in default or facing bankruptcy.
The TransPerfect case was the first time a Delaware judge had ordered the forced sale of a successful company, and the case was a bizarre exercise in highly subjective application of law. That Shawe was the only viable bidder in the end should have proven to the court and watching public how wrong it was on the various decisions leading up to that correct ending.
Now to the present – As more and more technology companies file for IPOs, executives are using dual-class share structure to maintain control over their companies. What this means is some common stocks come with one vote-per-share while another class of shares comes with many more votes-per-share. Most recently, ride sharing company Lyft went public with this sort of structure in place. This dual-class share structure ensures that company boards and executives maintain their voting power and control over the company, despite what shareholders want.
Before now, the thought of a board running over the vote of the shareholders was unimaginable. However, following the outcome of the Glenhill case, in which the Delaware Court of Chancery exercised its powers under Section 205 of the Delaware Corporation Law (DGCL) to fundamentally and retroactively rewrite a provision of the corporate charter of Design Within Reach that was plain, unambiguous and contained no mistakes, we must acknowledge that it is a possibility. When I commented on the Chancery’s actions in the previous case mentioned, I wrote, “That only perpetuates the fear that the Delaware courts are not really looking out for the shareholders.” I think this does the same, if not more.
Why does this matter?
Chancellor Bouchard’s decision in Almond v. Glenhill opens the door for other Delaware corporations to retroactively make changes to corporate charters based on the whims or desires of the current power bases and stakeholders which can usurp the values or rights of other investors who bought in under a set of rules they knew about.
According to Scott Watnik, of Wilk Auslander, the attorney representing plaintiff Charles Almond in the Glenhill case, “this is a risk that any investor in any Delaware corporation must now consider. Simply speaking, this decision gives corporations the opportunity for a ‘do over’ when they make mistakes and don’t like the outcome. Investors should be very concerned about this, as it means the corporate documents they rely on are no longer iron-clad for Delaware companies.”
Let’s Connect It All – In the case of Lyft and other technology companies filing for IPO’s with this dual-class share structure, Watnik says “if founders want to create a new class of stock with super voting rights just for themselves, and the shareholders vote against it, under the July 2018 amendments to DGCL 204(h)(1), it’s now possible for corporate boards to: (1) issue the stock to the founders anyway, and (2) pass a resolution under Section 204 ratifying the creation of the new class of stock on the ground that the creation of that stock was a ‘defective corporate act’ – and the nature of the ‘defect’ is that the shareholders did not vote for it.”
If shareholders want to file an objection, it must be done so within 120 days – and that’s assuming they are told of the approval in that time frame since notice only needs to be given to brokers, not the shareholders. But even if shareholders objected with the 120 days, they would be forced to enter into a litigation in the Chancery Court under Section 205 as to the “validity” of the board’s ratification.
The TransPerfect and Glenhill cases are recent examples of how the Delaware Chancery Court has been making some head-scratching legal decisions that could further upset Delaware’s business climate, which is already slipping.
In the case of TransPerfect, the company moved its state of incorporation from Delaware to Nevada, with TransPerfect shareholder Shirley Shawestating, “The expense burden some jurisdictions place on resident companies through overly-high litigation costs is simply staggering. Our situation in Delaware was a perfect example; and without significant legislative reform, I would not be surprised if TransPerfect’s ‘Dexit’ becomes part of a larger trend.”
In the case of Charles Almond as Trustee for the Almond Family 2001Trust v. Glenhill Advisors, the results remain to be seen, as it is still pending an appeal, but one thing is certain – this is a case that will have a lasting impact on DGCL 204/205, and entrepreneurs looking to incorporate, will likely begin to look away from Delaware.
ABOUT THE AUTHOR
Formerly from Israel, now in Delaware, I have owned, run and worked with food, technology and politics, beginning with the MFA and several Knesset members.
After Chancellor Andre Bouchard’s capricious and subjective rulings in the TransPerfect case, causing in my opinion, Delaware to drop from #1 in perceived equity and justice to #11 in a national survey, it is obvious to any true businessman and indeed many intimidated lawyers, that the Delaware law allows the judges in this court to exercise omnipotent rights to adjudicate any way they see fit — contrary to existing law or policy. The bottom line is that the Delaware Court of Chancery has become way too powerful because of the incestuous relationships within the system, which allow it to operate accordingly. In the TransPerfect case where Chancellor Bouchard was so obviously biased and improper, in levying unprecedented sanctions on CEO Philip Shawe to the tune of $7.1 million dollars and ruling that the company had to be sold contrary to the “Takings” law of the 5th Amendment, was simply outrageous. His actions and suspicious connections with the plaintiff’s attorney and former business partners at the infamous law firm of Skadden Arps (fined $4.6 million by the federal government for illicit lobbying activities), especially with his former associate Robert Pincus, who he appointed as TransPerfect’s custodian. Bouchard approved millions of dollars of unsubstantiated and un-itemized bills by Pincus, which made he and many of his cronies rich beyond anybody’s wildest dreams. I consider this the Rip-Off of The Century, all tied up in a nice little package that was approved by the Supreme Court under Bouchard’s former intern and Skadden Arps partner- Chief Justice Leo Strine! This, along with the power given the Chancery Court and its Chancellors, makes the perceived equity in this once respected institution, now extremely suspect. Bouchard has gone beyond the pale creating appearances of impropriety that are not acceptable! The court he oversees is way too powerful, which gives license to possible corruption and arbitrary decisions. Unfortunately it is all condoned by the legislature and the closely knit members of the Delaware Bar Association. Invitation for Cronyism Folks, there are simple ways we can begin fixing this broken system. First of all, we can have judges’ cases picked in a random method, as is done in the rest of the country, instead of the current system in Delaware, which allows the judges to look over the docket of cases and pick the ones that they wish to pick for whatever reasons they wish to pick a case. If that isn’t an invitation for cronyism, I don’t know what is. Next, when a candidate is recommended by the Governor for any judicial position, complete vetting by the State Senate should be done instead of it being a rubber stamp. Bouchard’s Senate confirmation took only 15 minutes and no questions were asked. Third, there have got to be some law changes. One was attempted, forcing a Chancellor to provide a cooling-off period before ordering a dissolution of a company. Unfortunately, there was no political motivation to make it happen and the incestuous Bar Association opposed it. Limitation of Power There has to be some limitation on the Chancellor’s power where true equity and justice is provided. Change is indeed necessary, however I am not optimistic. Delaware is moving into extreme territory with open late trimester abortion, socialism, eliminating voters rights, and even the idea of making Delaware a sanctuary state. Why would it want to change its method of operation when everything is controlled by the Democrats who for all intents and purposes seem to be anti-business. Corporations are fleeing to Nevada and others are searching for any venue to incorporate other than Delaware! When Delaware completely loses its lucrative franchise taxes (which make up one-third of the state’s income) due to a lack of trust in the Chancery Court, then perhaps the State Legislature will implement change to inspire businesses to continue to incorporate in Delaware. Famous attorney and law professor and Constitutional scholar Alan Dershowitz, stated after dealing with Supreme Court Justice Leo Strine in an appeal in the TransPerfect case where Bouchard’s decisions were wrongly upheld, “Any lawyer that recommends to his client to incorporate in Delaware would be tantamount to legal malpractice.” That folks is a serious statement by a true expert and should be recognized for the concern it clearly states. There is something wrong with the Delaware Chancery Court and it should be fixed, but will it? Probably not is my educated opinion. As always, your comments are welcome and appreciated. I would love to hear what you think of reforming the Chancery Court. Folks, I have been proven right again and I will continue to be right about America’s First State, whose reputation is rapidly deteriorating starting with the very place where corporations of our country seek justice… our beloved Chancery Court! The Chancery Court now stinks from the very top, starting with its suspicious Chancellor, Andre Bouchard. He is supposed to be the leader of our esteemed court and should be held accountable for its success or failures. He should be the man solving problems, NOT creating them. Indeed, he should not be the CAUSE of the court’s trouble. I’m shaking my head in shame. It has been my opinion for years and continues to be my opinion that Andre Bouchard is not on the level, and something is more than amiss in our once proud, but now heavily tarnished Chancery Court! I have been complaining about Bouchard and his cronyism from the day he was appointed. I have been shouting about this man — who drives to Court everyday in his shiny Bentley — starting with the appointment of one of his political cronies, who was embarrassingly unqualified to be a deputy in the Register of Wills office, to his terrible handling of the TransPerfect Global case, which lowered our state’s rating from one to eleven in the National Chamber of Commerce Survey. I’ve been warning of these shameful dangers, and now the latest bombshell news has come out! From my perspective, Bouchard should be done. But apparently he’s somehow protected by the Delaware system!! We have learned just how arrogant Bouchard appears to be and how he seems to put himself above the law. In this newest scandal, the attorneys for Meso Scale Diagnostics LLC, a biotechnology company, filed a motion alleging that Mr. Bouchard did not disclose that he was representing Vice Chancellor Parsons, as the Delaware Chancery Court’s attorney, in a high-profile First Amendment case. This while he was also arguing a case before that very same Chancellor. Are you kidding?? Can this be true?! “A reasonable observer would conclude that there is serious potential for bias when the attorney representing a party is also representing the trial judge in another matter,” the biotech company’s complaint said. After reading the story below, I’m outraged it has gotten this out of control after years of me pounding the table. All while our spineless elected leaders and members of our once illustrious Bar continue to bow to this man as if he’s their king, and they, his servants. Maybe this would happen in a third-world country, not our Chancery Court?! When will the people of Delaware say, enough?! We in Delaware should all be ashamed! And we should be calling for this man to resign! And for the legislature to start impeachment proceedings immediately and make our once proud Chancery Court great again! As long as Bouchard remains Chancellor, Delaware will never be respected again. That’s how I see it, folks. From the early days running the court something seemed wrong with Bouchard’s decisions to appoint un-qualified buddies to be deputies in the Register of Wills office. This was more appalling when more qualified people were stepped over just so the Chancellor could dole out favors. I felt this man had an agenda and was using his position unlike any other judge previously in his seat had done. He has proven me right again and again. I always suspected there was something more behind all of the erroneous and unprecedented decisions by Bouchard in the TransPerfect case after I learned of his longtime relationship with friend and cohort Kevin Shannon of Potter Anderson or his relationship with his old colleague Robert Pincus of Skadden Arps. I told you how Shannon and Bouchard shared a stage and spoke on a panel together in New Orleans during the trial. As I understand it, if we were in any other state, his failure to recuse himself would have prompted a demand for his resignation by the Governor, legislature or members of the Bar and a formal investigation by the grievance committee would have been initiated. But not in Delaware. Just as we are seeing in Washington today, our democracy is being tested and the people of Delaware are the big losers. Maybe you, like I, are asking yourself, how is this happening? Are we supposed to simply sit back and watch our once proud court system deteriorating right before our eyes? We cannot allow this to continue, my friends. Some say our Chancery Court in Delaware is the only equity court that truly matters in the world! Well, imagine if you became the head of that court, without ever having served one day as a judge previously. You get appointed in what amounted to be a rubber stamping in a 15-minute session by the State Senate. And then you get the keys to the kingdom. Now more than ever, I am convinced that the many employees of TransPerfect, including CEO and founder Phil Shawe, were set up by Bouchard and his buddies Kevin Shannon and Robert Pincus of Skadden. I’ll say it again folks in reference to Lord Acton, a British historian of the 19th Century who once said, “absolute power corrupts, absolutely.” It was true then, and remains true now. From England all the way to Delaware. As I see it, BOUCHARD SHOULD BE REMOVED FROM THE BENCH AND DISBARRED!! Read the story below, and weep for us all.By Vince Sullivan
Law360 (February 28, 2019, 9:51 PM EST) — A biotechnology company said Thursday that neither Chancellor Andre G. Bouchard nor now-retired Vice Chancellor Donald F. Parsons Jr. disclosed Bouchard’s prior role as the Delaware Chancery Court’s attorney in a high-profile First Amendment case while he simultaneously argued separate litigation before Vice Chancellor Parsons that created a conflict of interest.
Meso Scale Diagnostics LLC said Bouchard represented defendant Roche Diagnostics GmbH in the intellectual property rights suit that was tried in 2014 before Vice Chancellor Parsons while Bouchard was also representing him and the other chancery judges in the First Amendment case that targeted a closed-door arbitration program involving them.
The apparent conflict necessitates vacating Vice Chancellor Parsons’ rulings in favor of Roche and ordering a new trial on Meso’s claims, Meso’s complaint argued.
“A reasonable observer would conclude that there is a serious potential for bias when the attorney representing a party is also representing the trial judge in another matter,” the complaint said.
Jacob Wohlstadter, Meso’s president and CEO, discovered the conflict in early 2018 when internet research revealed that Bouchard, while an attorney with Bouchard Margules & Friedlander, represented the Court of Chancery, the chancery court judges and the state of Delaware in a 2011 suit brought by the Delaware Coalition for Open Government, the complaint said.
That suit, brought in Delaware federal court, alleged the Court of Chancery had violated the First Amendment by holding arbitration sessions that were closed to the public, according to the complaint. The federal court dismissed the Court of Chancery and the state of Delaware from the suit on sovereign immunity grounds but ruled against the judges’ summary judgment motions.
Bouchard represented Vice Chancellor Parsons and the other judges in their appeal to the Third Circuit, which affirmed the federal court’s rulings. He continued to represent them when they submitted a petition for a writ of certiorari to the U.S. Supreme Court, Meso said.
Bouchard represented Vice Chancellor Parsons from 2011 to 2014, encompassing the majority of the time the Meso litigation was pending before him, Meso alleges, and neither party ever disclosed this representation.
Bouchard was nominated to fill the vacant chancellor seat in March 2014, four months after post-trial arguments in the Meso litigation, and he ascended to the seat in April 2014, two months before Vice Chancellor Parsons issued his opinion in the Meso case, the company alleges.
Meso argues that its due process rights were violated because of the potential bias created by Bouchard’s dual representations at the time of the litigation. The complaint said a judge may feel “a debt of gratitude” to his own attorney; that a judge obviously has a favorable opinion of his own attorney’s legal skills and character, causing the court to be deferential to the attorney; and that the judge and his attorney have a “special relationship” that causes the judge to rule in his own attorney’s favor.
Vice Chancellor Parsons should have recused himself from presiding over the Meso litigation to comply with ethics rules and previous holdings of the Court of Chancery on such conflicts, the company said.
“The ethical rules requiring recusal when a judge’s attorney appears before the judge are broad and uncompromising,” the complaint said.
Those rules require recusal even when there is no evidence the judge is actually biased, Meso argued.
Because all the then-current judges of the Court of Chancery were being represented by Bouchard in the federal court case, another judge from outside that court should have presided over the Meso case, the complaint said.
Meso brought its suit against Roche in 2010 over alleged breaches of a licensing agreement for blood protein testing technology. In June 2014, Vice Chancellor Parsons ruled that Meso couldn’t challenge Roche’s use of the licensed technology. Meso appealed that decision to the Delaware Supreme Court, which affirmed the ruling, and then filed a petition for a writ of certiorari with the U.S. Supreme Court, which was denied.
Parsons, Bouchard and representatives for Meso and Roche did not immediately respond late Thursday to requests for comment.
Neither Bouchard nor Parsons are named as defendants in the complaint.
Meso is represented by David L. Finger of Finger & Slanina LLC and William S. Consovoy and J. Michael Connolly of Consovoy McCarthy Park PLLC.
Counsel information for Roche was not immediately available Thursday.
The case is Meso Scale Diagnostics LLC et al., v. Roche Diagnostic GmbH et al., case number 2019-0167, in the Court of Chancery of the State of Delaware.
Additional reporting by Caroline Simson and Vin Gurrieri. Editing by Haylee Pearl.
Chancellor Bouchard, what are you hiding? The law requires you to unseal these documents and let the public examine the court’s activities. If you aren’t covering your tracks and are not guilty of an impropriety, come clean and follow the law? Sad to say, my loyal readers, that the black eye on Delaware is no longer confined to a local or national phenomenon, it has now gone global! Frankly, it is embarrassing for Delaware and it will further denigrate Delaware’s falling, former reputation as the best place for business justice. Bouchard’s unlawful sealing of TransPerfect Global documents are indeed potentially damning to him and his Skadden Arps cronies (who I have been told were just fined $4.6 million by the DOJ for illegal activity that constitutes treason in my view) recently captures headlines in Barcelona, Spain’s second largest city, where I understand that TransPerfect has 500 employees. Transparency is without a doubt required by the Courts. Bouchard, you and your cronies cannot mask illicit activities in the dark of night — by ordering mass sealing of public documents! Who do you think you are? You sir are not above the law! Where did the $250 million go Bouchard? I know repairs on your Bentley are expensive, but don’t you think this is a little overboard?? If you have done nothing wrong, you certainly have nothing to hide. So prove me wrong, unseal the case, and expose the documents for all to see. Right now you are creating an acute appearance of an impropriety. Under no circumstances should the public ever have to even suspect irregularities in the Court of Chancery. As I see it, the Court’s reputation just a couple of years ago was beyond reproach and now it is not! You are now under the global microscope of investigative reports from as far away as Spain! Chancellor Bouchard, you owe the good citizens of Delaware a specific accounting of exactly where your appropriation of these funds, by your orders, to whom they were paid and for exactly what? These TransPerfect documents must be released to the public if the Delaware Court of Chancery is to have any credibility at all. I will not stop investigating, and writing about this until Chancellor Bouchard gives the public the transparency the law requires. Please see the article below.
The American justice dictates a resolution on the company Transperfect / FOTOMONTAJE CG
01.31.2019 00:00 h.
Nine months have passed since Phil Shawe took over 100% of the translation multinational Transperfect , which has one of its main international headquarters in Barcelona and a workforce of nearly a thousand companies. The takeover took place after one of the most mediatic business conflicts in the United States in the last four years. However, despite the resolution of the dispute, the judicial file of the case remains hidden from the public by decision of the Supreme Court Justice of Delaware, André Bouchard .
This new movement of the judge – the same that decreed the forced sale of the company founded in 1992 by Shawe and his ex-partner, Liz Elting – contributes to adding more opacity, if possible, to a shareholder conflict characterized by its lack of transparency and neutrality The dispute put at risk the future of more than 5,000 workers, 500 of whom are in the company’s offices in Barcelona, its most important international headquarters .
The business conflict represented for the company an expense of 250 million dollars –214 million euros – in more than 30 law firms , global investment banks and entities specialized in M & A for the alleged resolution of the conflict. All these expenses had the approval of Judge Bouchard, who in turn, has maintained a long friendship with the leading law firms that have profited most from the forced sale of the multinational.
These benefited firms have been Potter Anderson and Skadden Arps , through the fees of their lawyers Kevin Shannon and Robert Pincus respectively. Sources close to Transperfect say that a large part of the money charged to the translation and dubbing company by these companies comes from invoices approved by Judge Bouchard that do not present details or justifications.
The decision of Judge André Bouchard goes against the current US legislative framework, which requires to make public the detailed information of the cases resolved.
In this sense, several civic associations of Delaware request that the works commissioned by Bouchard be investigated by the law firms, while they reject the judge’s decision to hide the details of the case, contrary to the provisions of the law. prevent the public and the media from accessing their records.
The ‘TransPerfect Case’ has seriously damaged the prestige and neutrality of the State of Delaware, recognized in the world for its flexible and impartial judicial system. The imposition of a forced sale to a private company with positive results, the refusal to include in the bid strategic offers for the company or the opacity of the case demonstrated recently, have been some elements that have undermined the reputation of which it was one of the more attractive places for the American business ecosystem.
According to a survey prepared by the United States Chamber of Commerce, Delaware has fallen from the first to the eleventh position of the judicial neutrality ranking, after canvassing more than 1,300 general counsel, lawyers and senior managers. In turn, it is not surprising the decision of many companies to move their corporate headquarters to more competitive and neutral environments. This is what TransPerfect did to the state of Nevada at the end of 2018, as one of the first actions of Phil Shawe to restore stability to the company and its workers.
Despite the fact that co-founder Phil Shawe had initially been removed from the sale of his company, in May 2018 the businessman put an end to the conflict by buying 50% of his partner and ex-partner for a value of 385 million dollars (330 million euros) thus doing so with 100% of the multinational.
Despite the grueling struggle for custody, TransPerfect closed 2018 with revenues of 705 million dollars – 621 million euros – 15% more than the previous year . This figure has remained positive for 26 years, which marks a clear upward trend in the sector , despite the fact that competitive threats such as Google and Microsoft are already approaching, which already offer translation services, where the results are often repeated awkward and errors in the translation of idioms or phrases.
At the beginning of 2019, Transperfect hired its 5,000th employee. The company has more than 90 offices in cities around the world such as London or Sâo Paulo, however, its second most important headquarters – the first is in New York – is Barcelona, which has doubled its staff every three years.
In this sense, Phil Shawe predicts that the company could reach a thousand jobs in the Catalan capital by 2020.
Breaking News, folks: Elizabeth Elting’s attorney Kevin Shannon of Potter Anderson has made a new filing in the TransPerfect Global case. The filing allows his best buddy (you guessed it), Chancellor Andre Bouchard, to sink his tentacles into TransPerfect’s company coffers and possibly get the payola flowing out, once again! If the love of money is the root of all evil, Shannon and Bouchard are in my opinion its richest fertilizer. This story truly seems to have no end! If you want to understand what I personally consider the colluding crooks of the Delaware Court system (Shannon & Bouchard) are up to now, stay tuned to the Coastal Network. I believe I am uniquely positioned, having earned the trust of more sources on the inside than any other commentator. From what I have been told, I believe their latest scam to enrich themselves and their friends will shock your consciousness. First, I ask, why after having closed the case and after TransPerfect having fled our jurisdiction to Nevada to escape perceived corruption, is the Chancellor so eager to rip open old wounds and get TransPerfect back in his cross hairs? As they say on Wall Street, it’s about money and greed for certain corrupt Delaware elites. I will explain Shannon’s apparent scam in a nutshell, as verified by multiple sources within the company. As part of the deal (or more accurately, what I see as state-sponsored blackmail), in order to keep the company he built, my understanding is that Bouchard made Shawe provide legal protection (known as “indemnity”) to Elting for wrongdoing related to lawsuits against her by former employees. Because of this, Elting’s team now seems to have no downside, so she (or more accurately, her bill-happy lawyers: Kramer Levin in New York, Potter Anderson in Delaware) appear to be working to sabotage the cases for which they are co-defendants with Shawe and TransPerfect. Shawe and TransPerfect will have to be responsible by order of Chancellor Bouchard. Based on the contract with the Chancery Court, Shawe and his company TransPerfect Global has to handle Elting’s defense. Rather than sit back and enjoy their $385 million and 100% protection and “indemnity” that Bouchard forced Shawe to provide, Elting’s lawyers seem to be trying to make a mockery of theses cases and drive up their own legal bills (which will have to be paid by TransPerfect!), and keep on fighting in front of Bouchard. As I see it, because of Shannon’s perceived special relationship with Bouchard, they must feel they have no downside in sabotaging other litigations for which Shawe is paying the bill? If you think I’m off base about how excited Bouchard was to get this wildly-successful company to start subsidizing legal time-meters all over the world once again, wait until you hear this: From what I heard, Shannon made a motion asking for permission to keep the case going, with extra pages (more pages equals more money for Shannon, less money for TransPerfect employees), and hold on to your hats, as I have heard from multiple reliable sources… Bouchard GRANTED Shannon’s motion to keep the fight going in the Chancery Court within 3 hours!!! (Chancellor, you could have at least pretended to be objective and not given the appearance that you and Shannon are colluding and coordinating behind the scenes. Perception is key, especially in this case. You couldn’t have possibly even READ the motion as fast as you granted it?!) Now what’s worse than Bouchard having his clerks (who I have heard lie in wait for cushy Skadden jobs) standing ready to auto-approve Kevin Shannon’s every request, as he did for nearly 4 years? What’s worse than our Chancellor, who by his suspicious actions, could be betraying his sworn oaths and duties as a judge? What’s worse than a judge granting such windfalls to the side with zero witnesses to purposefully make settlement impossible? And what is worse than having, in my view, a Chancellor destroy Delaware’s business image and rankings (Dropping from #1 to #11) just to enrich his cronies? What’s worse? Watching Bouchard and his cronies gear up to seemingly milk it all over again?? Lawmakers, wake up and smell what I believe is the corruption in the Delaware Chancery! How pungent must the stench of Bouchard’s crazy operation be before you act, I ask? In my view, and in the view of countless other Delawareans who have written into my Coastal Network, Bouchard’s Chancery Court has morphed from a once widely respected institution, to what seems to me to be a corrupt third-world Kangaroo Court. TransPerfect would have gotten a fairer shake by suing Putin in Moscow. Wake up and pass reforms that will oust or limit the power of what I think is a Manchurian Candidate of a Chancellor, drunk with power. In my view, this man is a menace to what the Delaware Court of Chancery is supposed to be about, which is equity and fairness! I believe no judiciary purporting to be honorable and running a clean shop would, could, or should allow him a seat at the table, much less, at the head of the table. It looks to me that Bouchard views the Chancery Court as a place not to ensure that justice is done, or to maintain Delaware’s reputation for business fairness, vested in him by the legislature, but as a personal play-thing, where he can make crazy, unprecedented, and unpredictable rulings that hurt 4,000 working families, just to enrich a few of his cronies, and the Chancellor apparently has no cozier crony, than his old, dear friend Kevin Shannon of Potter Anderson. Stay tuned for more coverage. It seems at the moment that I’m the only correspondent with the inside scoop here. Either way, I promise to bring the citizens of Delaware the truth that no one else will. Please click on the link below to read the article from “Crain’s”: https://www.crainsnewyork.com/features/despite-bitter-battle-ownership-control-transperfect-remains-countrys-top-translation-firmFor the those of you who haven’t watched “Game of Thrones” on television and aren’t eagerly awaiting the final season in April on HBO, perhaps I can explain this analogy. King Joffrey is a fictional character, who is the product of incest. He is corrupt to the core, and willing to do anything to vanquish his enemies. His ascent to the throne was illegitimate. He tortures innocent people for his own amusement. He is a pathological liar and abuses his power in unspeakable ways to better his own position and his allies. He is all powerful; everyone fears him, so they tell him what he wants to hear (versus the truth), and all the kingdom’s subjects truly know he’s not the man for the job, but are powerless to drive change. Other than being a product of incest, which I can’t opine on, in my opinion, Chancellor Bouchard is the spitting image of King Joffrey. I’m glad TransPerfect Global and its CEO Philip Shawe were willing to demand trial by combat, a Game of Thrones reference, and win a victory not only over Bouchard, but the cadre of, in my personal view, the many suspicious sycophants, he surrounds himself with such as (Bob Pincus, his former partner at Skadden Arps; Kevin Shannon, his BFF; and Leo Strine, his former Intern at Skadden Arps). Let’s hope Delaware is not powerless to stop this apparently sadistic man who, since he ran the Judicial Nominating committee, and used to employ Leo Strine, the Chief Justice, should in my opinion, have never been given this appointment. Just to give you some background and an outrageous example, Bouchard wanted to give his friend Kevin Shannon and his client (former TransPerfect Global co-CEO Elizabeth Elting) an artificial leg up in the case. I have read over 5,000 pages of the transcripts in great detail. Take my word for it, it’s all lawyer lies and hyperbole — sad — and all designed to make this $650 million industry-leader look unusual — Why? I believe it was so Chancellor Bouchard could justify using TransPerfect’s company coffers as a conduit to enrich his pals beyond belief. When I think about the $250 MILLION (verified by Crain’s Business magazine) that Bouchard ordered private U.S. citizens to spend, just to seemingly benefit his cronies, it truly makes me nauseated. There was nothing wrong with this corporation, except for a 50% passive shareholder and scorned woman (Elting) who wanted out – and I think this Chancellor saw a huge opportunity knocking to use his position to feather all his friend’s nests and I am sure his own as well. What would a non-corrupt judge have done? Elting could have sold HER shares, even with a Custodian. But the rub is, half of a company (Elting’s share) wasn’t worth as much as 50% of the whole company — so seeking to enrich his pals, Bouchard embarked on a non-sensical judicial result: the most long, arduous, illogical, expensive, ripe for abuse, tortuous to 4,000 employees, a government run public auction from a successful private company — which is without precedent in America. To do this, Bouchard performed an illegal taking (contrary to the Takings Clause of the 5th Amendment) of Philip and Shirley Shawe’s stock (50% of TransPerfect) and put their private property up for sale, against their will, at the same time, to give Kevin Shannon’s clients a windfall. So, Bouchard then seemingly makes up an endless series of outrageous lies to justify what I believe is the biggest business theft in American history, courtesy of the Delaware Chancery Court and its cronies. You might say, well Shawe bought it anyway at the public auction, so no harm no foul — Philip and Shirley Shawe got to keep their property. If you believe blackmail is a proper activity for Delaware judges to engage in, you would have a point. Bouchard pitted Shawe’s bidding against his largest competitor, HIG-Lionbridge, an off-shorer of U.S. jobs — so in effect, Bouchard extorted Philip Shawe into over-paying, as this was the only way Shawe could save 2,700 American jobs and keep his company. Back to what I believe, based on the evidence, is that the Chancellor outrageously misrepresented the facts. Much to Bouchard’s disappointment, the law and the constitution prevents him from issuing a fine without a jury (thank God). So how does a potentially corrupt judge get around the law? As I see it it’s in how he lies in his opinions and tries to damage his enemies, and enrich his friends. Bouchard wrote in his opinion that Shawe “did not deny” stalking Elting. Naturally, “stalking” is a criminal offense that would be picked up by the newspapers, and would hamper Shawe’s ability to get financing. This ridiculous lie was blown up by Chief Justice Strine during the appeal, who also falsely refers to it as an undisputed fact. I have talked with 100 employees and Shawe never stalked anyone, and Bouchard himself must now agree, since he eventually awarded Shawe the company. From what I’ve read, here is what I see as the EVIDENCE Bouchard relies on from the trial, and again Bouchard said publicly “Shawe did not deny” this, back in 2015 to set these wheels in motions… A HUGE NEFARIOUS FABRICATION !!!! ELTING ATTORNEY: … Now, Mr. Shawe, you’re also fond of stalking Ms. Elting, aren’t you? SHAWE: No, not in any way, shape, or form. Bouchard should go to jail for the reputation damage of this outrageous lie alone. But the whole case is a grotesque misrepresentation which I believe was engineered by Bouchard for the benefit of his friends, and in my opinion, himself. Here is what Bouchard himself wrote when Shawe requested an itemization of legal fees on November 10th, 2015: “It is customary, after a sanction is imposed, to take evidence on the itemization of the amount.” But I guess if you are the judge’s best friend, Kevin Shannon of Potter Anderson, you get $1.4 million dollars of TransPerfect money and these rules don’t apply to you. Shannon did not have to justify or itemize anything! The Coastal Network will offer a reward to anyone who can find Shannon’s itemized bills on the $1.4 million Bouchard forced Shawe/TransPerfect to pay in the record. I cannot. And don’t get me started on Bob Pincus’s $25 million share of the $250 million in pirate’s booty. UNBELIEVABLE!!!!!!! Lastly to close on the point of who is worse, Chancellor Bouchard or King Joffrey from Game of Thrones, it’s a close call. Bouchard tortured thousands of employees for 4 years — innocent hard working Americans who were forced to delay weddings, put off having children, put off sending kids to college — all because of Bouchard’s, in my opinion, illicit scheme. Further, Shawe’s lawyers during the legal battle, were forced to pussyfoot around the issue of the Chancellor’s possible improprieties. This is from an actual legal document:Delaware is a small state with a small bar. The Plaintiff, however, resides in New York, which is a large state with a large bar, so he raises that the context of the relationship between the presiding judge in the Chancery Action and Shannon lends color to this appearance. Although the Court of Chancery’s decisions concerning the Defendants’ conduct at issue does not preclude this action or control concerning the validity of Plaintiff’s claims, Plaintiff provides a few anecdotal facts regarding the relationship of Shannon and Chancellor Bouchard. Shannon and Chancellor Bouchard, upon information and belief, have known each other since they represented aligned clients in In re Walt Disney Co. Derivative Litigation, 907 A.2d 693 (Del. Ch. 2005) approximately twenty years ago. Both served on the board of St. Francis Hospital. They have appeared as co-panelists at the annual Tulane Law School Corporate Law Institute in New Orleans, Louisiana (including while the Chancery Action was pending). Plaintiff understands (and has been assured by counsel) that these facts are not necessarily indicia of impropriety. The Court of Chancery’s failure to require Potter to submit itemized records like its co-counsel, coupled with Shannon’s relationship with the presiding judge, does however engender speculation, even if unwarranted.
This makes me sick, look at this weak presentation from the defense, even Shawe’s lawyers felt they had to walk on egg shells, when battling Bouchard’s insidious operation. The inevitable conclusion is: There is just too much power centered in the Delaware Judiciary, and this is not what our forefathers intended. Perhaps, back when the Delaware Chancellors were honorable and the Chancery Court was a nationally respected institution, this wasn’t a life or death issue for the state of Delaware. Regardless, in my view after doing more research than anyone else, I am certain that Chancellor Bouchard’s handling of the TransPerfect case, his appearances of impropriety, the innumerable irregularities, and his unusual and unprecedented decisions were not just a product of gross incompetence, but something far darker. While King Joffrey is the product of familial incest, King Chancellor Bouchard is the product of his incestuous relationships within the Delaware legal system — and even though he’s the most powerful man in our kingdom, he is not above the law and must be held accountable for his actions. Delaware’s financial future, and thus the financial future of it citizens depends on it! Delaware Lawmakers, I again call upon you for change and reform. The responses I have received from so many of you concerning the TransPerfect Case and my recent articles about how things went down in this case are appreciated. However, the outpouring of outrage about Bouchard closing the records from the public almost brought my servers down, and broke a new record for the Coastal Network. I will reiterate a few things as I see them before proceeding: Founders, Business Partners and co-CEOs of TransPerfect Global, Philip Shawe and Elizabeth Elting, after bringing this company from a dorm room idea to a $650 million dollar a year company, Ms. Elting wanted out and did not want Mr. Shawe to have it either. After Elting was thrown out of New York Supreme Court in one hearing lasting an afternoon, she then filed her same suit here, in the Delaware Court of Chancery, seeking a forced public auction of this successful company. This litigated outcome has never happened in the history of the United States. Unfortunately for TransPerfect, Elting’s local counsel in Delaware was Kevin Shannon of Potter Anderson, longtime best buddy of Chancellor Bouchard. Shawe on the other hand did not want the company sold. Newbie Court Chancellor, Andre Bouchard (who insanely gets first right of refusal on all cases) sees his lifelong friend Kevin Shannon on the masthead of the case, and lo-and-behold, assigns it to himself, setting off years of litigation and what I view as the largest legal theft with the appearance of corruption in American History, to the tune of $250 million to lawyers and Delaware elites. Much of this money was charged, using millions upon millions of unchecked and un-itemized bills that were approved by Chancellor Bouchard, amidst widespread employee accusations of billing fraud and fabricated hours by Skadden Arps, among others. From this point on, (besides other appearances of impropriety), it is my view that Bouchard brazenly misused his personal power by ordering the documents to be sealed — documents that, by law, should be available to the public. I think the Chancellor must think he IS the law, because he just seems to make it all up— as he goes along. Here are the Top 10 comments I received from my readers. The last names and e-mail addresses have been removed to protect these good folks from any possible retaliation by the Chancery cronies. Thank you for writing in and following this case and continuing to follow it! The first comment comes from Dave Stevenson of the Caesar Rodney institute (a conservative Delaware think tank) who would like to publicly share his opinion: “Jud, I just wanted to second your concerns about Delaware losing its advantage as the place to incorporate. Combining franchise fees and abandoned property payments, this franchise is the largest revenue source for the state. I’m sure you saw Bill Freeborn’s recent article on killing the golden goose. As past Director of the Division of Corporations, he knows what he is talking about when he says a friend recently was”feeling that the recent uncertainty of the courts, the departure from established precedent, and the more “progressive” approach of Delaware’s judiciary make Delaware far less attractive for any of his global M&A clients”. I have written several pieces about the state’s frequent fee increases, and aggressive collection of abandoned property fees. We’ve been acting like pirates! Keep up the good work!” David T. Stevenson, Policy Director Caesar Rodney Institute Here are 10 more from the many I received: From Alice: “Wow, your latest article is really INTERESTING! Can Bouchard actually seal these public records? If it is proven that these funds were wrongfully billed, the Chancellor’s ass might be grass.. This is an angle that is a possible way to expose this possible corruption.” From Bob: “Judson, You are sure throwing some heavy stuff out there. The Democrats at Leg Hall are squirming big time. LOL Keep it up, you are making a difference !!!!” From Adam: “Jud, Isn’t there a FOIA REQUEST you could do to get those documents unsealed or some court action???” From Abner: “Judson, This is brutal. Unfortunately the boys and girls in the Delaware Legislature won’t ever remove Bouchard. However he might not get reappointed. Your articles are fun reading and the people are talking. Keep the pressure on. Best Regards.” From Lawrence: “Judson, Thank you for all the information you provide us. I believe Delaware is in horrific shape. If this f…ing Judge is half as bad as you surmise, we are in huge trouble. Love your articles.” From Erin: “Dear Judson, Great stuff. This work you are doing is really stirring the pot. Delaware has tremendous economic problems already. WHEN THE Franchise taxes disappear, God help us!” From Roy: “Hey Judson, Those documents should be open to the public. This Chancellor is a disgrace. Thanks for all you do keeping us informed.” From Kelly: “That corrupt bastard. Get him Jud. If anybody can do it you can! LOL” From Bill: “General Reid Beveridge’s recent letter to the editor regarding the demise of Republicans in Delaware and the list of three possibilities that might return Republicans to relevance in our state caught my attention. Of particular interest was his third point – the potential destruction of Delaware’s corporations franchise. It is no secret, to those who understand the corporations business, that the state’s proprietary revenue source is facing attacks from multiple fronts, including from within Delaware. I sincerely hope that the new crop of junior legislators take the time to truly understand what this business means to our state’s financial well being. “ From Eric: “Jud, Thanks for continuing to chip away at Chancellor Bouchard‘s armor! A recent Caesar Rodney institute email acknowledges that Delaware’s proprietary revenue source is facing attacks. Bouchard and his cronies are going to ruin it for us! What You are doing is important to all Delawareans. Please keep it up! ” Folks, these comments from folks across Delaware from both sides of the political isle reflect a genuine concern about the integrity of the Chancery Court under Bouchard’s regime. Delaware’s sterling reputation as the best locale for businesses, with best equity court in the country, has plummeted. I again ask for justice on behalf of not only the thousands of TransPerfect employees that saw Custodian Bob Pincus cut their benefits and loot their company, but also justice for the citizens of Delaware! Someone must answer and be held accountable for the financial tragedy of the TransPerfect case — or our reputation will continue to sink more and more into the abyss. Lawmakers, it is time for these documents to be open for public scrutiny and an investigation of who the Chancery Court made rich with TransPerfect’s money. The law gives the public transparency on the courts. Make Bouchard follow the law and unseal the documents! If you are one of my 6,000 Delawarean subscribers, you likely have a lot to be thankful for this holiday season. We live in the greatest democracy in the world. For the most part, threats to that democracy and freedom are taken head on. While it happens all over, there are now relatively few cases where the rich, the powerful, the politically connected get to prey on hard working men and women of our society. In Delaware, the only place where too much unchecked power has led to what I perceive as utter corruption is in the leaders of our judiciary. Chancellor Bouchard, bolstered by having his former intern as Chief Justice (Leo Strine), has in my view, created an environment where possible corruption and mismanagement is more than tolerated, it is both feared and exalted. The combination of these two factors leads to a situation where no Delawarean will take action to even investigate Chancellor Bouchard, who in my opinion and in the opinion of hundreds of TransPerfect employees and perhaps thousands of onlookers, indirectly allowed $250 million to be moved out of a successful company to what appears to be the enrichment of those who the Chancellor has admitted having and established as long term friendships: Kevin Shannon of Potter Anderson and Bob Pincus of Skadden Arps, among others. While hundreds of members of the public scream for Bouchard to be at minimum, investigated, why does our legislature do nothing?! From what I’ve heard, the Bouchard’s have Bentleys, Porsches, huge mansions in fancy neighborhoods, their kids fly around in private jets, and for this I hope they are grateful this holiday season. I demand justice for the countless employees, shareholders, officers of corporations and members of society that all pay a small “tax” to support Bouchard’s disgraceful operation, and because we do so without realizing it, the tables of every Delawarean are not as bountiful. Perhaps those who can do something about Bouchard apparently turn a blind-eye because they are making money as well? Or perhaps because they are too afraid to speak out against the Chancellor for fear of reprisal? All we read is nonsensical platitudes, no matter how crazy and unpredictable his actions. Believe me, it’s not because people in Delaware don’t know or suspect Bouchard has created appearances of impropriety! Perhaps the most frustrating thing I have learned through my investigation and coverage of the TransPerfect case, is that many citizens feel the Chancellor is somehow operating in a suspicious and wrongful manner, but yet just shrug; “That’s the Delaware Way.” In my educated opinion, some cases could be decided while drinking expensive scotch in the country club conservatory. Indeed it’s enough to dishearten any patriotic American! To the legislature; to the voters; and to members of the Delaware Bar Association who I see as acting as the front group supporting the Chancellor blindly, I think George Orwell may have said it best: “A people that elect corrupt politicians, imposters, thieves and traitors are not victims… but accomplices.” Orwell is right to an extent. If we want what I consider the Chancery Court corruption to stop, Delaware has to be willing to scrutinize the powerful. The cost of not doing so will be our reputation (which has already been compromised), our incorporation business, and our overall economy. I will have a simple plea I will make to our legislature: If you won’t begin an investigation, then, at minimum, make Bouchard unseal the case and make him show the public his friend’s bills he nefariously ordered paid with no examination. There are literally thousands of employees who were irreparably harmed by Chancellor Bouchard seizing a situation — applying a corrupt and non-nonsensical remedy without precedent in the U.S. (maybe Russia?) — and engaging in the largest, single, I believe illegal wealth transfer in business history from honest hardworking TransPerfect employees into the pockets of the Chancellor’s elite country club friends. The case remains under a court-ordered seal. Hundreds, maybe into the thousands, of hours were billed that accounting employees claim were never worked! Apparently there is no itemization whatsoever? My sources tell me that mainstream media sources have requested the sealed bills and files be opened, yet Bouchard refuses?! I say to our Chief Chancellor directly: “Unseal the records and let the public see what you and your friends have been up to. If you have done no wrong, you should have nothing to hide, no tracks to continue to cover. Open up the documents and invoices for scrutiny.” Guess what your honor, the sale process is over, yet you still refuse to unseal the records?! Why?? The law supports unsealing the case when over, yet it seems that you continue to believe you are above the law, that you can play not only judge, but also jury and executioner — to thousands of employees at one of American’s most successful companies — and you and your cohorts think you can operate without full disclosure. It’s enough to make me, and any red-blooded American that cares about capitalism, property rights, and justice, sick. If there is the slightest hint of corruption or even the appearance of corruption in the judiciary — it cannot stand. It cannot become the new norm. The cost to society, our children and our children’s children is too high. I believe you are not the man for this job, but while you are still in office, consider this the official request of the Coastal Network on behalf of my loyal readers. We formally request that you open the entire TransPerfect file. Why not clear the air Chancellor Bouchard and restore the public faith in your position, because the people of Delaware are skeptical?? Please prove my concerns wrong and show us these forced payments by TransPerfect under your authority and direction were justified and legitimate. Again, while everyone is enjoying their holiday season, do not forget these many TransPerfect employees, many of whom make less than $50,000 per year, who are the ongoing victims of what I consider a possible $250 million fleecing! It is the working employees and their families that are the true victims here. Folks, they scream for justice this holiday season. Unsealing and carefully scrutinizing these, definitive, court documents, that are public record by law anyway, is the least the Chancery Court can do. After 4 years of what I and many view as serious misappropriations and improprieties at the hands of a Delaware Chancellor, we owe these employees, and the public at large, complete transparency and closure.There was a great novel, among others, written by legal mystery author John Grisham, called “The Firm”. A movie was also made of it where Tom Cruise played a blossoming young lawyer in a law firm that worked exclusively for organized crime and would go to unlimited lengths to protect its secrets. Many of you probably have read the book and seen the movie, as indeed I have as well. The book and the box office smash hit movie “The Firm” have some significance in its plot in relation to the TransPerfect story, except this is real life. Hold that thought. You might remember the outrageous situation that happened during the TransPerfect saga where Chancellor Andre Bouchard appointed his former colleague from Skadden Arps, Robert Pincus, as a Custodian with unlimited power to potentially bilk this successful company. Pincus billed a whopping $25 million for himself and his firm for attending a once per month board meeting, and court-ordered over $250 million in legal Billings — all a reward for him for failing as mediator and allowing the case to drag on for years — and also drag Delaware’s name through the dirt. He and his cronies, as I understand it from my reliable resources, are a virtual who’s-who of suspected “over billers” including Alvarez & Marsal, Grant Thorton, Houlian Lokey and Credit Suisse. They seemingly, from all the vast sums of actual capital removed, set up a virtual cottage industry around emptying TransPerfect’s once-full coffers to feather their own nests? One reason this case went on for 4 YEARS, and left this industry leader virtually penniless, from my perspective, is simply because these “prestigious firms” lined up to stuff their faces full with unchecked billing. A New York judge recently called behavior, not nearly as God-awful as the TransPerfect case, “Highway robbery without the six-gun,” for an amount involving 1/100th of what TransPerfect lost. Further exacerbating the appearances of improprieties is the Skadden Arps $25 million, and much of the other $250 million spent that were ordered by the Court, yet were conveniently unverifiable, because in yet another shady and unprecedented move, Chancellor Bouchard allowed these bills to be paid without demanding checks or itemization. Folks, this unbelievable and unethical action really did happen, and is a matter of public record. Legitimate bills or state sanctioned theft — which is it? You can’t decide because Bouchard’s crew masked public transparency by billing only line items such as “$2 million for legal services” (and that’s for ONE month) and by getting the court to seal documents. I heard from one Chancery Court insider that the TransPerfect case has the most sealed documents in the history of Delaware and we are obviously not dealing with national security issues — just an embarrassed judiciary looking to cover their tracks. According to my reliable sources within the company, none of what actually transpired at TransPerfect was actually necessary. And folks, a lot of people got filthy rich at the rate of $1,450 per hour because of Bouchard hooking them up. Interestingly, Pincus has now retired, and another source has confirmed that Skadden’s pension is based on a partners’ last 3 years of billing — How convenient! The good ole boy backscratching never stops and continues even in the face of scrutiny with today’s news. There is a woman, named Mary Toscano, who was Chancellor Bouchard’s law clerk on the TransPerfect case. My research indicates that Ms. Toscano is widely believed, within TransPerfect, to be responsible for helping Bouchard in many ways and indirectly creating many of these problems. These actions in my opinion helped to justify Bouchard’s first-ever government takeover of a private profitable company — and this in turn apparently resulted in over $250 million in corporate waste that enriched Bouchard’s friends, and his friend’s friends, beyond belief. She is also thought to be chiefly responsible for getting the custodian’s unchecked and unitemized bills in the TransPerfect Case approved by the court to be paid. The custodian, Robert Pincus, who was appointed by Bouchard had his bills approved, I’ll make this point once more — without itemization! Millions and millions of dollars went to Pincus. In exchange for rubber stamping bills often in the millions for one month’s “work” — using the term loosely, my opinion is that she is now being given a cushy job at Skadden as payback, and this presents yet another appearance of impropriety that should be investigated and stopped. Perhaps this job buys her silence? Could this be a clever move for Skadden to lock up Mary Toscano with a higher-paying attorney job, which will probably result in shielding her from ever having to testify against Bouchard? Who knows what really happened, regarding Ms. Toscano’s employment with Bouchard’s friends? Only in Delaware folks and just when our Chamber of Commerce rankings of Delaware’s top economic driver, the incorporation business, has plummeted based on the Chancellor’s perceived improper renderings and directives. Without legislative reform curbing their unchecked power, Skadden and Bouchard can easily use Delaware to possibly and continually to take advantage of companies to enrich themselves and their friends. Let’s not forget, Bouchard was a plaintiff attorney that sought to sue companies after every merger, saying the price was too low regardless of how it was priced — for those of you that aren’t in this circle it is my opinion: Bouchard was the corporate lawyer equivalent to an ambulance chaser. And let’s not forget Skadden Arps — Reminiscent of the movie “The Firm”, with so much possible connection with wrongdoing attributed to this law firm by the media, is it really a stretch to believe this seemingly-suspect organization’s tentacles extend to the Wilmington office? Or perhaps they even originate there?ALM Media July 24, 2018
Tom McParland
Three law firms are pressing their case for $129 million in attorney fees in a shareholder suit over Facebook Inc.’s since-abandoned plan to reform its stock structure in a way that would have given founder Mark Zuckerberg more control over the company.
Attorneys from Wilmington plaintiffs’ firms Grant & Eisenhofer and Prickett, Jones & Elliott and Radnor, Pennsylvania-based Kessler Topaz Meltzer & Check defended the request in a court filing on Monday, saying Facebook’s eleventh-hour decision last year to scrap the reclassification plan had secured the full relief their clients had sought in the two-year-old lawsuit.
Counsel for Facebook, however, has said the proposed award was the second-highest ever requested in the Delaware’s Chancery Court and would “dwarf” fees in comparable cases.
Instead, the company said any fee award should not exceed $19.8 million.
The dispute hinges on the question of how to quantify the value of the plaintiff’s victory last year, which came just three days before a planned trial that aimed to put Zuckerberg on the stand. The share restructuring would have allowed Zuckerberg to retain his 60 percent voting power at Facebook, even as he made good on his promise to sell off his shares to charity. There was no dollar amount attached to the agreement, and both sides at the time refused to call what transpired a “settlement.”
Plaintiffs’ attorneys argued Monday that the move would allow shareholders to eventually take control of the Menlo Park, California-based social media giant, a benefit they said was worth $1.29 billion based on the company’s present value. “The real issue in dispute on this fee application is how does one value control of a $500 billion company,” the attorneys wrote in a brief in support of their motion. “Facebook cannot now retreat from Zuckerberg’s many uncontradicted public statements. Nor can it credibly claim that control of a $588 billion company does not have a multibillion dollar value.”
Facebook, which is represented by Ross Aronstam & Moritz, said in court papers last month that Zuckerberg has no intention of relinquishing control of the company for the foreseeable future, and there was no way to accurately determine the value of the termination.
Given the uncertainty, the company said, attorneys should be compensated based on the time spent working on the case. “Plaintiffs’ counsel now seek the second highest fee award in the history of this Court, and (by an order of magnitude) the highest fee award in any case not involving a certain and quantifiable monetary benefit,” Facebook’s lawyers wrote in a brief. “Under these circumstances, quantum meruit is the proper method for determining an appropriate fee.”
Facebook’s board approved the reclassification in 2016 as a mechanism to allow Zuckerberg to maintain control of the company after he had announced that he would donate 99 percent of his Facebook holdings to the Chan Zuckerberg Initiative, a philanthropic investment company run by Zuckerberg’s wife, Priscilla Chan. But investors quickly lined up to oppose the plan, arguing that it would grant Zuckerberg lifetime control of Facebook, while forcibly converting two-thirds of Class A stockholders’ equity interest to nonvoting Class C shares and depriving them of any influence over the company. In a complaint filed in May 2016, class attorneys called the plan a “fait accompli” for Zuckerberg and argued that it was a self-interested scheme approved by a conflicted board of directors.
With trial just days away, the company announced on Sept. 22 that its board had unanimously agreed to withdraw the reclassification plan.
In a post to his Facebook account, Zuckerberg said that the proposal to add a new class of company stock was “complicated” and that it “wasn’t the perfect solution.” However, he said that Facebook’s recent success would allow him and his wife to fully fund his philanthropy and maintain voting control for at least the next 20 years. And he announced that he planned to sell 35 million to 75 million shares in the next 18 months to fund contributions in the areas of education and science. “This path offers a way to do all of this, and I’m looking forward to making more progress together,” Zuckerberg said.
Briefing the plaintiffs fee request is now complete, leaving the issue to Vice Chancellor J. Travis Laster to decide. There was no word Tuesday on when the judge might rule.
The case is captioned In Re: Facebook Class C Reclassification Litigation.
1. A judge should uphold the integrity, independence and impartiality of the judiciary. RULE 1.1 Compliance with the Law. A judge should respect and comply with the law, including this Code of Judicial Conduct. Comment: Deference to the judgments and rulings of courts depends upon public confidence in the integrity and independence of judges. The integrity and independence of judges depends in turn upon their acting without fear or favor. Although judges should be independent, they should comply with the law, as well as the provisions of this Code. Public confidence in the impartiality of the judiciary is maintained by the adherence of each judge to this responsibility. Conversely, violation of this Code diminishes public confidence in the judiciary and thereby does injury to the system of government under Rule l RULE 1.2 Promoting Confidence in the Judiciary. (A) A judge should act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary and should avoid impropriety and the appearance of impropriety in all activities. Comment: Public confidence in the judiciary is eroded by irresponsible or improper conduct by judges. A judge must avoid all impropriety and appearance of impropriety. A judge must expect to be the subject of constant public scrutiny. A judge must therefore accept restrictions that might be viewed as burdensome by the ordinary citizen, and should do so freely and willingly. The prohibition against behaving with impropriety or the appearance of impropriety applies to both the professional and personal conduct of a judge. Because it is not practicable to list all improper acts, the proscription is necessarily cast in general terms that extend to conduct by judges that is harmful, although not specifically mentioned in the Code. Actual improprieties under this standard include violations of law, court rules or other specific provisions of this Code. The test for appearance of impropriety is whether the conduct would create in reasonable minds, with knowledge of all the relevant circumstances, that a reasonable inquiry would disclose, a perception that the judge’s ability to carry out judicial responsibilities with integrity, impartiality and competence is impaired. In conducting such activities, the judge should act in a manner consistent with this Code. (B) An independent and honorable judiciary is indispensable to justice in our society. A judge should participate in establishing, maintaining and enforcing high standards of conduct, and should personally observe those standards, so that the integrity, independence and impartiality of the judiciary may be preserved.”It’s time for the legislature to appoint a special commission to investigate this whole situation. It is clear to me that this case was poisoned for the Shawes before they even walked in the courtroom. This explains why Kramer Levin, Elitng’s primary counsel in New York chose as their Delaware counsel, Kevin Shannon since they had all served as co-counsel in the Disney case, one of the biggest cases in the history of Delaware and of course Bouchard was co-counsel as well. Delaware’s reputation was called into question this week by an article that came out on March 20 in The Wall Street Journal. The article, “Dole and Other Companies Sour on Delaware as Corporate Haven,” notes that Delaware’s business-friendly reputation is no longer justified. The last thing Delaware needs now is the Chief Chancellor being allowed to engage in unchecked judicial action which in my opinion can easily be construed as corruption. The judicial branch is the least democratic of all of our government, and a recent poll showed 70% of Delawareans disagree that the Court should have the power to force the sale of a profitable company. I again call upon the legislature to act. Stay tuned. Best regards, JUDSON Bennett Please note new e-mail address, [email protected]
“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?
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
SENATE CONCURRENT RESOLUTION NO. 91 ENCOURAGING THE DELAWARE STATE BAR ASSOCIATION, ITS CORPORATE LAW SECTION, AND THE COUNCIL OF THAT SECTION TO EXAMINE THE STATE’S BUSINESS BUSINESS ENTITY WITH AN EYE TOWARDS MAINTAINING BALANCE, EFFICIENCY, | Source
Summary of bill
The bill is online and HubPages does not allow duplicate content, even if repeating the bill’s text. So here is the summary and use the links above to read it in its entirety.
Purpose:
Encouraging the Delaware state bar association, its corporate law section, and the council of that section to examine the state’s business entity with an eye towards maintaining balance, efficiency, fairness and predictability.
SYNOPSIS
This Resolution encourages the Delaware State Bar Association, its Corporation Law Section, and the Council of that Section, to examine the State’s business entity laws with an eye towards maintaining balance, efficiency, fairness, and predictability.
Respectfully Submitted
I have been a staunch defender of Delaware and this issue is lurking, and still too few are paying attention. We need to change the “who cares?” atmosphere.
Are you with me?
Respectfully Submitted,
JUDSON Bennett-Coastal Network
Judson Bennett
A court drama being played out may result in TransPerfect’s two chief competitors in the translations services industry seeing increased revenue.
Lionbridge Technologies (LIOX), based in Waltham, Mass., is the largest translation services company in the U.S., with revenue of $560 million last year. TransPerfect is the second largest in the U.S., with revenue last year of $505 million. London-based SDL (SDLLF) could also benefit.
While beating its rival handedly in growth and profits, TransPerfect is experiencing a serious power struggle in the executive suite that has ended up in the courtroom. Lionbridge has attempted to capitalize on this controversy and courtroom drama by planting seeds of doubt on the future of TransPerfect with its customers.
However, this may not be the boon LIOX is expecting. Although TransPerfect’s power struggle began in 2013, it has shown no signs of slowing down the company. So far this year, sales are up more than 11% with May being the most successful month to date. Whatever the Delaware Chancery Court decides, there will inevitably be a lengthy appeal process and co-founder visionary Phil Shawe has made it clear that he is not going anywhere.
The Delaware state court’s apparent willingness to step into the affairs of a private company has come under fire from many directions, including most-notably former New York City Mayor Rudolph Giuliani, who criticized Delaware’s new Chief Chancellor Andre Bouchard (a Canadian) for an “un-American” decision that was overreaching, intrusive, and against American free-market principles.
Co-CEO and fellow shareholder Elizabeth Elting, who according to many employees has a very limited role in the day-to-day functions of the company, is suing for TransPerfect to be dissolved and force-sold to the highest bidder. When Elting co-founded the business with Shawe 24 years ago they had had a romantic relationship, but that ended years ago. She now claims the two cannot work together anymore and that the New York-based company should be auctioned off because she is upset with their personal relationship. It is also obvious that Elting is now using the court as a weapon to maximize her buyout price.
Shawe recently offered $300 million cash to buy her half of the company. In an attempt to extract more money from Shawe, Elting recently told Forbes Magazine that she intends to counter, but no offer has been forthcoming. It appears Elting believes the Delaware Court will give her a better exit strategy than she can achieve through negotiation, and thus, is content to wait it out until Bouchard’s decision and all appeals, are rendered final.
TransPerfect is the largest privately-held company in the $35 billion translation services industry. With 4,000 employees in 100 cities on four continents TransPerfect is capable of translating more than 170 languages. It has a vast array of clientele, including almost every Fortune 500 company, such as USPS, IKEA, Johnson & Johnson, and Hilton Worldwide.
Elting has used a strategy of saying “no” to all routine decisions to create “deadlock” under Delaware law, and therefore wants the court to auction the company to the highest bidder. Unable to find a judge receptive to her case in New York , she filed a second lawsuit two years ago in Delaware. In the non-jury trial, despite the fact that Elting couldn’t produce one witness to corroborate her testimony, while Shawe presented 10 witnesses on his behalf, the judge sided with Elting on dissolution, and appointed a custodian to oversee a sale process.
This means for the first time in U.S. history, a private, profitable company that has not been accused of any wrongdoing or impropriety is being put on the auction block. Although the harm caused by Chancellor Bouchard’s use of the word “sale” has raised eyebrows with many TransPerfect employees and customers, Bouchard also said he believed that Shawe was the most logical buyer. In the meantime the court has put a middleman in charge of the company for the purpose of having it dissolved and force-sold against the wishes of two of its three shareholders. Elting owns half, while Shawe and his mother own the other 50%.
It appears the employees, TransPerfect’s most important assets, are extremely upset with Bouchard and his apparent willingness to rely on the uncorroborated testimony of one witness who serves no meaningful role at the company. Hoping to save the company they work for, as well as their jobs, the employees wrote to the judge before he rules on the bizarre case currently before him.
On April 26, TransPerfect’s employees sent two letters to Bouchard; Peter C. Schwartzkopf, the speaker of the Delaware House of Representatives; other members of the Delaware house; and the media to present their perspective before a final ruling in the case.
In order to inform the public of their situation, a group of 610 TransPerfect employees called Citizens for a Pro-Business Delaware ran radio ads on local Delaware stations. They also placed a two-page advertisement in the Delaware News Journal that reprinted the contents of each letter. So far, the employees have not received a response from Bouchard, who has issued a series of unprecedented decisions that are so unusual and blatantly one-sided that observers say they are not based on law and equity.
Shawe’s lawyer Martin Russo of New York law firm Gusrae Kaplan Nusbaum told Slator.com , “Ms. Elting has the right now to sell her shares on the open market without interference from, or affecting Shawe’s ownership rights; but that she chooses not to take the market price is an indicator as well. Shawe’s $300 million offer is magnanimous, and is surely better than (what Ms Elting) would get as a 50% owner on the market.” Russo told the website the value represents 10x the company’s after-tax cash flow profits of 30 million and described the $300 million offer for Elting’s 50% stake as “extremely generous.”
However, if Elting refuses the offer and forces the sale, this could provide a big opportunity for either Lionbridge or SDL to purchase TransPerfect and become the undisputed leader of the translation industry.
Sworn Testimony about Phil Shawe’s Devotion
Rick Bell’s Delawareinc.com | Source
Rick Bell
“Jud,
As you know, we form Delaware companies for people. In fact, we form more than 15,000 new Delaware companies per year for people from all across the USA and all around the world. On a good day, we’ll form more than 50 new Delaware companies. There are many companies like ours, except we are different in that we form ONLY Delaware companies. Most of the other companies in this business will form a company in all 50 states.
The Court of Chancery decision you are referring to is one of the most significant stumbling blocks to many entrepreneurs choosing Delaware. The decision may be justifiable to the chancellor, but it is a disaster for Delaware’s image.
When people are making a decision as whether to choose Delaware or their home state, they take a leap of faith that Delaware will be better for them. Specifically, they perceive Delaware as protecting Directors and treating stockholders fairly. This case has everyone thinking that Delaware is unpredictable and makes rogue decisions that could literally assassinate your company even if you’ve been successful in the marketplace.
If it is reversed by the Supreme Court Delaware will be better off.”
Richard H. (Rick) Bell, II
Chairman & CEO
Harvard Business Services, Inc.
16192 Coastal Highway
Lewes, Delaware 19958
Delaware is the Corp Capital
What should Judge Bouchard do?
This TransPerfect Case Just Gets More Tangled
I have written several times about the TransPerfect Global fiasco; the one where Delaware’s Chief Chancellor Andre Bouchard ordered the sale of this very profitable company. A decision that will most likely result in the loss of jobs and even destabilization of the entire company.
Here you have an American success story, and a Delaware Judge who has overstepped his authority by making an arbitrary and capricious decision, which is resulting in an un-American situation. This decision is not only bad for Delaware, butbad for America.
What is even more interesting and disconcerting, the temporary custodian of the company appointed by Chancellor Bouchard has now decided to apparently inhibit/prevent employees of TransPerfect from exercising their First Amendment rights. Apparently, 600 employees of TransPerfect are openly speaking out about the Court’s decision and the happenings within the company.
Please read the memo below that was sent to the Management Team of TransPerfect requiring spin to be propagated to employees and threatening disciplinary action including job termination. I was copied with this threatening memo by my internal source.
Custodian: TransPerfect is Doing Very Well
Custodian Robert Pincus says TransPerfect is doing well. If so, why is Bouchard looking to auction the firm?
Robert Pincus to TransPerfect Staff
To the Management Team:
TransPerfect is performing exceptionally well and growing quickly, thanks to your hard work. We are committed to keeping it that way, and our highest priority is supporting you and the continued success of the business.
It has come to our attention that some of our employees have recently spoken with the media about the pending litigation between the shareholders of TransPerfect, and in some instances seemingly have sought to attempt to pressure the Delaware court. We believe that those actions are counterproductive and that they should stop.
If you receive a call from a reporter or member of the media, our Company policy is now that you must refer that person to Joel Mostrom, who will respond directly or designate another spokesperson. We want to remind you, and we ask you to remind your colleagues, that: this policy covers all forms of responses to the media, including, without limitation, off-the-record and anonymous statements.
Any deviation from this policy may lead to disciplinary action up to and including termination. Your strict adherence to this policy is expected, as well as appreciated by management and your colleagues. [TransPerfect Employee Handbook] The purpose of this policy is to avoid media and other actions that may negatively impact TransPerfect’s business. Please be mindful of the policy and its importance going forward. We ask each of you as our key managers and leaders to continue to focus on your responsibilities and serving the needs of our clients. All of our efforts should be aligned in that direction. To the extent that your colleagues have questions regarding the litigation, we have included the attached FAQs. Thank you.
Frequently Asked Questions for Employees
Bouchard wasted no time in leaving his mark on the court with one of his first big cases, Elting v. Shawe C.A. No. 9700-B. It makes it clear that Bouchard is going to do things his way whether or not the law and evidence agrees with him. This decision is not so surprising considering Bouchard’s history of cronyism at the Register of Wills office in Sussex County. This case couldn’t help but remind me about the piece I wrote, on April 8, 2016, when I learned that one of the attorneys was Kevin Shannon from Potter, Anderson and Corroon. Mr. Shannon and Chancellor Bouchard have an illustrious history together, both working on the infamous case “In Re The Walt Disney Company Derivative Litigation” when Bouchard was a practicing attorney. In that case, a derivative action was brought on behalf of the shareholders disputing the $100 million payout Disney gave to Michael Ovitz after he was fired. Bouchard represented Disney and Mr. Shannon represented a fellow Board member Sanford Litvack.
Mr. Shannon and Chancellor Bouchard as recently as March 16, 2016 were co-panelists together in New Orleans at a Tulane University law panel. Considering Chancellor Bouchard’s history, it comes as no shock that Mr. Shannon’s client not only won the case but as far as I can see, every motion as well. He even held a hearing to sanction Mr. Shawe for, in part, reading his partner’s emails that were open and available on the company server – stating that the company privacy rules did not apply to her. Could this have been done as a means to make Shawe pay Elting’s outrageous buyout demands? For the record, as a few publications reported this week, Shawe offered her $300 million this week and if she declines or refuses to make a counter offer, this should tell any reasonable person which party wants to come to a settlement and which one is playing games?
While I have fervently criticized Chancellor Bouchard in the past, it seems he has truly gone off his mandate in this instance by ignoring evidence indicating the possibility of tampering, and intent to take down a company from within? Instead he has focused on intemperate emails between the two partners to dissolve a thriving and profitable company, while ignoring suspicious irregularities whereby there were, according to Phil Shawe’s defense team, serious breaches of fiduciary duty?
Employee Campaign
In case you haven’t seen the case, which I’ve written about twice in recent weeks, let me sum it up for you here: Bouchard’s Delaware Court of Chancery ordered the sale of a $500 million profitable translation business because one of the partners who has a very limited role at the company claimed there was a deadlock. The fact that the company has been and continues to make record profits makes this decision all the more disturbing because this has never happened before in the history of Delaware!
After reading the various papers in the court file it is very obvious in my opinion that Ms. Elting seems to be manufacturing deadlock and using the court to gain a payout she could never get if she sold her shares on the open market. So why is this a concern for the people and the great state of Delaware? Chancellor Bouchard is sending a message to corporate America that if you are having any squabbles at a board meeting then by incorporating in Delaware you risk the court selling your company out from under the rightful owners.
The decision was so outrageous that former New York Mayor Rudy Giuliani chimed in and has been strongly critical of the decision. Giuliani said, “it is unAmerican for the court to break up a thriving successful company just because two directors are having some disagreements.” The last thing Delaware needs with all of its other economic problems is a mass exodus by corporate America.
I applaud Giuliani’s efforts because someone needs to come to Delaware with a big broom and sweep out this mess. I said it before and I’ll say it again… the bottom line is that a very well politically connected lawyer who was appointed Chief Chancellor of the State of Delaware’s Chancery Court — even though he never served a single day on the bench, is in my opinion, making arbitrary decisions that seem to have no basis in law or fact. He apparently favors a single litigant (the plaintiff) whose attorney has a long-standing relationship with the Chancellor himself. This is indeed the appearance of an impropriety and most likely will be part of an appeal by Shawe’s legal team, if they so desire.
From my perspective, I believe it is no coincidence that Chancellor Bouchard either got this totally wrong, or is making sure “his” people are taken care of. Nothing could be more compelling than the dissatisfaction of more than 600 employees of TransPerfect themselves who took out two full page ads in the Delaware News Journal expressing their opinion that there was no dysfunction at TransPerfect and that the Chancellor’s decision will inevitably result in the loss of many jobs, if not the total downfall of this extremely successful business.
Chancellor Bouchard should know and care that people’s livelihoods are at stake and the corporate world is watching. This is his first big case, and it will not only define his career, but risks the future of Delaware as the state of choice for corporate America.
Open Letter to Chancellor Bouchard
600 TransPerfect employees are urging Chancellor Bouchard to maintain the company management and leadership teams | Source
Prepared by Judson Bennett
Contact Judson Bennett
References:
Website for TransPerfect Global:
http://www.transperfect.com/
Link to Conference in New Orleans:
http://www.law.tulane.edu/tlsLifeAfterLS/Files/CLIAgenda-Revised.pdf
Respectfully Submitted,
JUDSON Bennett-Coastal Network
What Should Chancellor Bouchard Do?
[polldaddy poll=9549700]
Chancellor Andre Bouchard
Misguided Delaware Chancery Court Chancellor Andre Bouchard | Source
Other News Stories on TransPerfect
Full Page TransPerfect Employee Ad to Bouchard