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OPINION Dear friends, Folks, in the famous TransPerfect case in our home state of Delaware, the two founders have settled all of their differences, according to a Law.com/Delaware Business Insider story put out Wednesday. Now it’s time for Andre Bouchard and his Chancery Court to sever all ties with the company. He’s still collecting money through his court-appointed Custodian Robert Pincus, YEARS after the case was settled and now that the founders have settled all disputes, there’s no reason for him to keep his hand out. Hundreds of millions of dollars could have been saved, INSTEAD of hundreds of millions of dollars being spent on Bouchard’s buddies and former co-workers at law firm Skadden Arps. Summed up in the Law.com story (see the story below), even better than I could say it, by an attorney representing the company, “If Bouchard, instead of ordering the sale of the company, had done what the New York judge, Judge (Melvin Schweitzer) did, and just said, ‘Nope, neither one of you is entitled to this relief. Go solve your problem yourselves,’ there would have been hundreds of millions of dollars in fees saved.” The depths of Bouchard’s corruption are apparent to me in how he abused his power in this case. I was all over Bouchard even before TransPerfect came along for him to start ringing the court’s cash register as he seemingly likes to! I’ve covered the Delaware Chancery Court and Chancellor Andre Bouchard from day 1 of his regime, because of injustices and poor planning by Bouchard at the Register of Wills office in Sussex County, which my friend Cindy Green had to endure as the elected Register of Wills under his arrogant authority. Folks, this can’t go on or our state is doomed with this guy in charge of our vaunted Chancery Court. At least now it should stop for TransPerfect. The question is, will it? Or will Bouchard’s abuse of power continue?! Scroll down for the Delaware Business Insider/Law.com story: TransPerfect CEO Settles 6-Year Legal Battle With Co-Founder, His Lawyer Says While the custodianship case between Philip R. Shawe and Elizabeth Elting has been sorted out through mediation, TransPerfect’s legal saga in Delaware isn’t over, as Shawe and TransPerfect continue to contest attorney fees charged by Skadden, Arps, Slate, Meagher & Flom as custodian in the case during the company’s 2015 sale for $770 million. By Ellen Bardash | September 30, 2020 A dispute between the founders of TransPerfect Global Inc. has been resolved with a settlement agreement, ending a battle that began in the Delaware Court of Chancery nearly six years ago. But while the custodianship case between Philip R. Shawe and Elizabeth Elting has been sorted out through mediation, TransPerfect’s legal saga in Delaware isn’t over. Shawe and TransPerfect continue to contest attorney fees charged by Skadden, Arps, Slate, Meagher & Flom as custodian in the case during the company’s 2015 sale. That sale was for $770 million, TransPerfect is also mid-discovery in a case in the Southern District of New York. TransPerfect is also mid-discovery in a case in the Southern District of New York. “We don’t think there’s anything left to the custodianship at all,” said Martin Russo, an attorney representing Shawe and TransPerfect, on Wednesday. “Of course, we have this very big hurdle, which is the Lionbridge H.I.G. case where we’re trying to remedy the damage that was done by the court-ordered custodianship; the disadvantages that TransPerfect has now based on having been forced to hand all this sensitive data and trade secrets to a competitor.” A letter to Chancellor Andre Bouchard (https://drive.google.com/le/d/1kF-FAMjCS4Ln 8zSkahrWehaTodsoeNn/view?usp=sharing) written by Jeremy D. Eicher on Shawe’s behalf Wednesday indicated the settlement agreement frees Elting from any liability or financial responsibility in two multi-million dollar settlements which Shawe and TransPerfect entered into in December 2019. “If Mr. Shawe’s good faith efforts produced an agreed Settlement with Ms. Elting, a feat this Court once deemed so impossible as to require the novel extraordinary remedy of a forced sale of an extremely profitable, privately-owned enterprise, a similar result must certainly be achievable with a Court-appointed Custodian bound to act in good faith,” Eicher wrote. Attorneys with Skadden and with Potter Anderson & Corroon, which represented Elting in the case, did not immediately respond for comment Wednesday. In exchange for the releases, according to that letter, Elting will not claim that Shawe and what is now TransPerfect Holdings LLC owe her more than $210,000 in legal fees—a claim she brought before the court previously and that Bouchard said would require another motion by Elting to continue. Elting’s ownership interest in two real estate properties—one in New York and the other in California—is also being transferred to Shawe. Russo said he could not disclose dollar amounts Shawe is expected to pay Elting in the settlement. The agreement, according to Russo and the letter to Bouchard, resolves a conflict involving WordFast, a separate company that created the code behind much of TransPerfect. Prior to the sale of TransPerfect, Russo said, WordFast was treated as though it were part of TransPerfect and was also for sale, with Skadden partner Robert Pincus, along with Elting, asking the court to rule that WordFast had granted TransPerfect a license to use its software royalty-free. As part of the settlement, Shawe is to purchase Elting’s 50% interest in WordFast. Russo said the agreement is significant in that after years in the Court of Chancery, it was reached in mediation without court intervention. “If Bouchard, instead of ordering the sale of the company, had done what the New York judge, Judge (Melvin) Schweitzer, did, and just said, ‘Nope, neither one of you is entitled to this relief. Go solve your problem yourselves,’ there would have been hundreds of millions of dollars in fees saved,” Russo said.

The Court of Chancery’s Inequity in Handling the WeWork Case

The Court of Chancery in Delaware handles corporate cases, as a top incorporation state in the United States. At the Chancery level, the court does not include juries, and the presiding judge has the final verdict in each case. Notably, with this type of system, and no watch dogs in place, there is room for judicial overreach and corruption. While the Delaware Court of Chancery is famous for incorporating 60% of Fortune 500 companies and countless businesses, the court has most recently been in the news for injustice that’s seeped into its handling of multiple cases, including office share space company WeWork.

The Court of Chancery and the WeWork Case

The Court of Chancery continues to make headlines alongside WeWork for the injustice that continues to seep into the case, but how did it start? Two independent directors in WeWork, Lew Frankfort, and Bruce Dunlevie, approached the Chancery Court through their lawyer William B. Chandler 111 due to its history of being a pro-business state. The primary aim of the current lawsuit that has landed in the court is to hold SoftBank accountable for its breach of contract with WeWork. WeWork’s contract with SoftBank required SoftBank to buy WeWork shares up to $3 billion from Chief Executive Officer Adam Neumann and other shareholders. Upon the completion of all the legal requirements of the contract, SoftBank will, in the future, have full control over the current WeWork’s management. However, SoftBank decided to end the contract on April 1, 2020, leading to the two directors filing for a lawsuit.

The Case Ruling by Andre Bouchard

The presiding judge, Chancellor Andre Bouchard, authorized the appointment of two new directors. The appointed directors’ role is to investigate if Lew Frankfort and Bruce Dunlevie have the right to sue SoftBank. The ruling offers the parent company access to the privileged company’s information through their representative Skadden Arps. William B. Chandler III argues that allowing the appointment of new directors is harmful to the case and Chancellor Bouchard is disregarding important laws and opting to side with the parent company. Both directors expect compensation of $250,000 each in two months.

Parallels Between the WeWork and TransPerfect Case

With the current state of press surrounding the case, those who are aware of the court’s history have drawn parallels between the WeWork case and other significant cases in the past where Chancellor Bouchard and the Court made harmful decisions that impacted the company. One company that took the brunt of the Court’s decision was global translation company, TransPerfect. In the TransPerfect case, Elizabeth Elting filed a lawsuit against business partner Phil Shawe. In the lawsuit, Elting makes a demand for the sale of the company. During the lawsuit, the company has an average of $470 million in total revenue. Shawe put forward a reasonable deal wanting to buy Elting’s shares for $300 million. Chancellor Andre Bouchard, the presiding judge on the case, discarded the offer and proceeded to use a strict and rare custodian appointment method to put the company up for auction. Bouchard granted the custodian, former employee of Skadden Arps, Robert Pincus, authority to oversee billings and hire consultants. Pincus did not allow Shawe to view any of the bills. The unjust rule led to the company’s auctioning, requiring Shawe and other bidders to buy out the company. Shawe won the bid and bought the company at a high price of $770 million. Both the WeWork and TransPerfect cases expose the Court of Chancery’s ignorance of the law and execution of unfair rules to Delaware businesses. Additionally, the fact that Andre Bouchard was an employee at Skadden Arps—the firm that gets the upper hand initially in both cases—illustrates favoritism to the firm.

Coastal Network

The Coastal Network is an outlet committed to providing a voice against corruption and advocating for transparency in the Delaware court system, business world and beyond. For more on corruption in the United States, including the Delaware Court system, visit www.coastalnetwork.comThe Delaware Court of Chancery is known as one of the oldest and most prestigious courts in all the United States. On the surface, their reputation seems impeccable. Which begs the question, “Who watches the watchmen?” Who ultimately provides the Delaware Chancery with oversight?

Establishing Oversight of the Delaware Chancery Court

While Delaware’s governor appoints judges to the Delaware Court of Chancery, and the senate confirms them, the Delaware Chancery works with a high level of autonomy in their day-to-day business. The senate and governor would only intervene in the case of serious criminality.  Fortunately for the state, Citizens for a Pro-business Delaware, in conjunction with the Better Business Bureau, have taken it upon themselves to carry the torch of accountability on behalf of the people of Delaware. More than 1/3 of Delaware’s economy is contingent upon the businesses that the Delaware Chancery serves. Among Delaware Pro-business’ many platform points are three key point of oversight: Delaware Pro-business has made it a mission to enforce accountability, which has become a necessity given the events of the TransPerfect case. 

Conflicts Of Interest in the Chancery Court of Delaware

At the heart of Delaware Pro-business’s push for oversight is the behavior of the Delaware Chancery’s chancellor, Andre Bouchard and his former associate at Skadden Arps, Robert Pincus. The two men had previously worked together at the prestigious law firm, so when Bouchard appointed his former colleague as the court-ordered custodian of the forced sale of TransPerfect, Citizens for a Pro-business Delaware responded with a fair amount of justifiable skepticism. 

Requiring Law Firms and Custodians to Provide Financial Receipts when Billing

It wasn’t just the blatant nepotism involved in the appointment; it was the fact that Robert Pincus engaged in deceptive billing practices while serving as custodian. Pincus billed TransPerfect almost $1,500 an hour for nondescript services. When taken to task regarding the inappropriate charges, Pincus’ associate, Bouchard, had no choice but to back pedal and side against Skadden Arps. The resulting decision was not only a legal fiasco, it also weakened the reputation and prestige of the Delaware Court of Chancery. 

Ensure Chancery Court Chancellors Cannot Select Cases Based on Self-Interest

As a result, Citizens for a Pro-business Delaware has called for more oversight on the Delaware Chancery, including pushing for formal legislation forcing the Chancery to abstain from choosing cases that result in a conflict of interest, or worse yet, outright promote their own self-interests.  There’s a hard road ahead, and Delaware Pro-business is just getting started, but through their efforts, and the involvement of Delaware’s citizens, the Delaware Chancery will get the formal oversight it so desperately needs. 

COASTAL NETWORK

The Coastal Network is an outlet committed to providing a voice against corruption and advocating for transparency in the Delaware court system, business world and beyond. For more on corruption in the United States, including the Delaware Court system, visit www.coastalnetwork.com 

Philip Shawe, Elizabeth Elting, and the Ongoing Fight Over TransPerfect

TransPerfect, a global translation company, started out as the combined dream of two college sweethearts: Phillip Shawe and Elizabeth Elting. Ever since a feud landed the company in the Delaware Chancery Court in 2014, Chancellor Andre Bouchard and custodian Robert Pincus have meddled in the company’s affairs. Here are some facts and key takeaways from the case.

Heading to the Delaware Chancery Court for Litigation

Phillip Shawe and Elizabeth Elting founded TransPerfect and both served as co-CEOs and the two members of the board of directors. The company had 100 shares of common stock; Etling owned fifty, Shawe owned forty-nine and Shawe’s mother owned one. The former lovers broke off their engagement in 1997, five years after founding TransPerfect, and have endured a tense business partnership since. In 2014, the Delaware Court of Chancery became involved in the company’s affairs after Elting petitioned the court to appoint a custodian to sell the company. 

Chancellor Andre Bouchard Chooses Skadden Arps

Following the decision to appoint a custodian, Chancellor Andre Bouchard chose Skadden Arps to handle the appointment. There have been no statements defending or justifying this choice from Andre Bouchard, leaving room for skepticism on his intentions. 

Selection of Robert Pincus as Custodian

Chancellor Andre Bouchard approves former colleague and friend Robert Pincus as custodian to preside over the case. There has yet to be a statement from the Chancellor or Delaware officials about the lack of disclosure involving their relationship.

Custodian Robert Pincus and the Selling of TransPerfect

In an unprecedented example of overreach, misconduct, and conflict of interest, custodian Robert Pincus moved that the company should be sold privately at auction, rather than given directly to either co-CEO. This led to an uproar from the group Citizens for a Pro-Business Delaware and appeals from the case are continuing to this day. Dozens of senior staff at TransPerfect resigned both out of protest and pressure from Pincus. 

Delaware Chancery Court Billing Scandal

That’s when the bills started piling in. In June 2017, amidst the finalization of the sale of TransPerfect, Shawe began appealing to the court for Skadden Arps to release proper billing records and statements. After giving citations of increasingly exorbitant amounts, Pincus rushed to finish the auction. Recently, Chancellor Bouchard has finally ordered Skadden Arps to release the statements to TransPerfect. 

Global Translation Company TransPerfect: Today

Refusing to be beaten, Shawe managed to buy his company back at auction, leaving Elting enraged and seeking to overturn the sale, an effort that failed when Bouchard (and the Supreme Court) approved the purchase in 2018. Still, Shawe sought justice for the corruption he faced in Delaware, moving to Nevada to seek a non-biased court. In October 2019, TransPerfect was found in contempt by the Delaware Court, and was fined $30,000 per day until the Nevada litigation was dropped. As of today, it is still unclear whether the corrupt handling of this case will ever be resolved, though the lawsuits are still ongoing. COASTAL NETWORK The Coastal Network is an outlet committed to providing a voice against corruption and advocating for transparency in the Delaware court system, business world and beyond. For more on corruption in the United States, including the Delaware Court system, visit www.coastalnetwork.com 

Who is Chancellor Andre Bouchard?

Andre Bouchard is a public figure and career politician from the elite of Delaware. After working as an attorney for many years, Bouchard joined the Court of Chancery and has been at the heart of a few Delaware business scandals. He is now Chancellor Andre Bouchard of the Delaware Chancery Court.

1. Chancellor Bouchard’s School and Education 

Chancellor Andre Bouchard, raised primarily in Delaware, dedicated himself to education early on. Bouchard first attended Salesianum High School, an all boys private Catholic school located in Wilmington, Delaware. Following his upbringing at Salesianum Catholic School, graduating in 1979, Andre Bouchard attended Boston College for his Bachelor’s degree and later attended Harvard Law School with his juris doctorate.

2. Andre Bouchard’s Career Summary

With a history of privilege among the Delaware elite, Andre Bouchard has a lengthy list of cushy jobs from working as a corporate litigator at Skadden Arps to starting his own law firm Bouchard, Margules & Friedlander. Now, Andre Bouchard sits as the Chancellor Bouchard at the Delaware Court of Chancery.

3. Chancellor Bouchard’s Additional involvements beyond the Court

With privilege comes connections, and Andre Bouchard has a network of very powerful friends. Because of this, Chancellor Bouchard has also had many opportunities to work in various government positions.

4. Notable Cases from Bouchard’s Chancery Role

There are multiple cases worth noting, both from Andre Bouchard’s time as an attorney and as the Chancellor for the Delaware Chancery, however, the following cases from the CBS Merger to custody battle over TransPerfect and Meso Scale Diagnostics, showcase a similar theme for Bouchard. A theme runs through all of these cases: unprecedented intervening and oversight from government to business/organizations. For more information, visit Delaware State CourtConnect and Courtroom View Network (CVN).

5. Andre Bouchard’s Firm Represents State in a Federal Lawsuit

As previously noted, Bouchard founded and worked for Bouchard, Margules & Friedlander, a law firm that was once used (before Bouchard became Chancellor) to defend the Delaware Chancery Court in 2011. This case was important, as the Delaware Coalition for Open Government was attempting to prevent the courts’ ability to use confidential arbitration, which would significantly invade the rights of businesses and individuals. The Coalition prevailed, and Bouchard lost the case.

6. Chancery Case: Meso Scale Diagnostics V. Roche Diagnostics

In the midst of the Delaware Coalition for Open Government litigation, Meso Scale Diagnostics was in the middle of a Chancery Court suit against Roche Diagnostics, a case where Bouchard had more bias than Meso Scale knew, including the following: Andre Bouchard never admitted any relationship, yet information was covered up until recently. Meso Scale was not given the chance to request an unbiased judge and therefore claims it was an unfair trial.

7. A Voice for the People? Conflict of Interest in the Chancery Court

Though Chancellor Bouchard claims that he desires more than anything to protect the vulnerable, his case history would suggest otherwise. He consistently rules in favor of those in power, while leaving Delaware citizens without unbiased representation. The TransPerfect case, the Koch case and the Meso Scale Diagnostics case demonstrate the conflicts of interest that have been present in the Delaware Chancery Court for years since Bouchard has taken over.

8. Andre Bouchard and Skadden Arps

Before his career as Chancellor and running his own practice, Andre Bouchard worked as an attorney for Skadden, Arps, Slate, Meagher, & Flom LLP for 10 years. It is important to note Bouchard’s close relationship with the firm, as it has monopolized businesses in Delaware for decades. Bouchard not only worked as an attorney there, but also kept in close contact with many of his previous coworkers and employers, including Robert Pincus—who he brought on as the custodian in the TransPerfect case.

9. Andre Bouchard and Robert Pincus 

Both of these men are seemingly part of the Delaware “Old Boys Club” and worked for Skadden Arps at the same time; Bouchard as an attorney and Pincus primarily as an arbitrator. Yet, the close relationship didn’t seem to be a ‘conflict of interest’ in Chancellor Bouchard’s eyes when he brought Robert Pincus on to be the custodian for the TransPerfect case.

10. Chancellor Bouchard’s role in the TransPerfect case 

In the TransPerfect case, Andre Bouchard seemed to utilize his personal connections when making decisions. He appointed his friend and previous coworker, Robert Pincus, as custodian of the case. This led to mishandling of the case—for years, Bouchard did not require Pincus to hand over receipts for millions of dollars in bills directed at the company.

Coastal Network

The Coastal Network is an outlet committed to providing a voice against corruption and advocating for transparency in the Delaware court system, business world and beyond. For more on corruption in the United States, including the Delaware Court system, visit www.coastalnetwork.comIn 2019, Chancellor Andre Bouchard of the Delaware Chancery Court said he was “sympathetic to some of the concerns [TransPerfect] has raised,” subsequently ordering Custodian Robert Pincus and Skadden Arps to provide itemized billing details in support of the many non-itemized fees charged back to Phil Shawe and TransPerfect. At the time of the ruling, TransPerfect CEO Phil Shawe said the ruling was “a major win for transparency and openness in the Delaware courts.” However, amidst court closures due to Coronavirus, Skadden Arps decided to hide more of its documentation, believing it would go unnoticed or that the Delaware Chancery Court would yield to its traditional practices. Finally, in a motion that upset Chancellor Bouchard, Skadden Arps submitted what it thought was an appropriately redacted motion that hid most everything. On June 8, after TransPerfect requested Skadden Arps to clarify its redacted petition, Chancellor Andre Bouchard ordered for Skadden Arps to provide an unredacted record for TransPerfect. In what seems will finally provide just results, the Delaware Chancery Court told Skadden Arps in is not the sole arbitrator of what is secret and what is open. TransPerfect, Skadden Arps and the Delaware Chancery, including Chancellor Andre Bouchard, have continued to go head to head for a fair outcome in what has now become a five year legal battle. A legal battle that started when TransPerfect co-founders Phil Shawe and Liz Elting went to court for custody over the translation company, which is now the world’s largest. Original story in Medium.