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Is this America? You have to wonder… when your Chief Chancellor Andre Bouchard is once again making a Stalin-like decision to dissolve a solvent company, rather than letting the private sector solve its own problem — which it would do, if the Court would stay out of it.

Equity-only courts, like the Chancery Court in Delaware, have been officially outlawed in 48 of 50 States! Only Delaware and Tennessee allow judges such unfettered power without the checks and balances of a jury.

It’s a court run by a man who appears to be absorbed by making companies spend and spend to solve simple problems. You appear to have deadlock here. Why not do what Delaware Supreme Court Justice Valihura demanded in the TransPerfect Global case, and expand the Board? In my view, the answer to “why not?” is because these decisions do not allow for Chancellor Bouchard to enrich his so called, elite, Delaware, lawyer friends and Skadden Arps buddies!!

Why would Bouchard do the equivalent of dropping a nuclear bomb on employees, their families, the U.S. Constitution and all business law precedence in America before his regime? The fly-swatter of an expanded Board can solve any deadlock, but where is the money for greedy Bouchard in something so simple? Bouchard’s pals would not profit from such simple American logic if it were applied here.

Simply put folks: Bouchard’s court, in my opinion, has turned into a money-making machine for his friends and cronies. How much money will be spent in the process? How much money could get funneled to all of his pals in the court-system?

We must rise up and stop this nefarious trend by a self- serving Judge who seems to be using the system for his own advantage? The Bar Association always has to go in front of him and plead their cases for his entire 12-year term, so they are beholden to obey Bouchard’s will. Folks, “the fox is guarding the hen house”! From my perspective, our elected General Assembly must step up for the people, reign in this-what I call-“business-terrorist jurist”, and restore the balance of power in our State before it is too late.

Instead, Bouchard’s solutions are un-American and insanely expensive. Bouchard has yet to explain any of the details or unseal the case where he ordered $250 million of TransPerfect’s money to be spent. The solution should be that Bouchard expands a company’s Board and lets the private sector make these decisions.

Instead, it is obvious to me and many others, he chooses to make the company “government controlled” — where he can make his cronies and good old boys richer and richer. He can pay back those who supported him to become Chancellor with no bench experience.

To me folks–It’s a crime, I see it plain as day, and it has to stop.

I pledge to talk to the employees of this recent company fiasco in Bouchard’s Court as well — just like TransPerfect — and give you honest reporting of any atrocities that Bouchard’s lackeys commit when he puts them in charge. According to employees, one woman at TransPerfect is still in therapy from the intimidation of Bouchard’s appointed Custodian and the fear of losing her job.

Folks, it is my absolute opinion, If the hubris of this inexperienced, petulant, greed-ridden, all-powerful Chancellor is not reigned in, Delaware’s image as once the #1 place for corporations — whatever is left of it and what’s left of Delaware’s economy — will be gone.

I implore you, my readers: Please call your elected state legislators, and tell them you will not stand, for what I consider, this corrupt behavior in our judiciary! IT IS GOING TO BE AN ISSUE IN THE 2020 ELECTION !

Please read the article below and any feedback you send me will be appreciated.

Here is the Law360 story:


Dysfunction Leads Del. Chancery To Dissolve Pharma Co.

By Vince Sullivan

Law360 (May 17, 2019, 7:03 PM EDT) — A Delaware Chancellor ordered the liquidation and dissolution of a pharmaceutical development company Friday, saying disagreements among the company’s three managers have created a deadlock that has frozen operations and doomed its future prospects.

Chancellor Andre G. Bouchard said Inspirion Delivery Sciences LLC cannot move forward because its operating agreement doesn’t provide a mechanism to resolve the differences facing members Stefan Aigner, Raymond DiFalco and Manish Shah, and there is no practical way for the business to continue.

“Underlying the rupture in their relationship, Aigner, DiFalco and Shah have been at loggerheads over issues of fundamental importance to the company and its future … ,” Chancellor Bouchard said in his opinion. “In sum, the current state of play at the company is that the board consists of three managers, two of whom disagree vehemently on issues critical to the company’s management and business strategy.”

The fissures began to show about two years ago, the opinion said, when Aigner, on one hand, and DiFalco and Shah, on the other, disagreed on supply contracts for the production of the company’s opioid abuse-prevention drug technology. The unique corporate governance structure required that Aigner and either DiFalco or Shah agree on corporate actions, but a dispute over DiFalco and Shah’s ownership of the company Inspirion contracted with to manufacture its drug led to the deadlock.

A series of acrimonious actions and reactions followed, with Aigner accused of trying to eliminate DiFalco’s veto rights using the conflict-of-interest provisions in the operating agreements, the opinion said.

Aigner filed suit in late 2018 seeking declarations that would cement his control of the company while limiting DiFalco’s management role, and DiFalco filed counterclaims seeking a dissolution of the company.

The agreement allows for the appointment of an independent representative to vote in DiFalco’s place when issues arise with supply contracts that implicate DiFalco’s other businesses, Chancellor Bouchard said. But DiFalco’s independent representative resigned in the fall of 2018, followed by Shah’s resignation, leaving just Aigner and DiFalco as voting members.

The opinion said the independent representative mechanism could work to resolve the differences between the two, but the chancellor determined it was highly likely the remaining managers would deadlock on the appointment of a replacement representative.

Even if there were a new representative selected or appointed by the court, the opinion said the mechanism is fatally flawed due to the ambiguous language in the operating agreement that gives no concrete definition of a conflict or when a manager would be required to disclose a conflict that would call the independent representative to the table to vote.

The deadlock has prevented Inspirion from selecting a contractor to manufacture its opioid abuse-prevention drug technology and has made it nearly impossible to monetize its valuable intellectual property, Chancellor Bouchard said.

“Under these circumstances, the court concludes that dissolution of the company is the best and only realistic option to force the parties to find a resolution where they have failed before, or if they cannot, to yield value for them by selling the company’s assets,” the opinion said.

William T. Reid IV of Reid Collins & Tsai, representing DiFalco, told Law360 Friday that the court’s decision will hopefully help in the development of new drugs to combat the opioid epidemic.

“This is an important victory for our client that will hopefully free up the technology so desperately needed to help those affected by the opioid epidemic,” Reid said. “We’re grateful that this court took the rare step of ordering a dissolution of the dysfunctional company.”

Representatives for Aigner did not immediately respond Friday to a request for comment.

Inspirion was formed in 2008 to develop drugs that would prevent the abuse of opioids by maintaining the time-release properties of opiate-based medications even after the pills were crushed and ingested, according to the opinion. It brought one such drug, MorphaBond, to market, and received regulatory approvals for a second drug, RoxyBond.

Aigner is represented by Peter B. Ladig and Brett M. McCartney of Bayard PA, and David H. Wollmuth and Michael C. Ledley of Wollmuth Maher & Deutsch LLP.

DiFalco is represented by Norman H. Monhait and Carmela P. Keener of Rosenthal Monhait & Goddess PA, and William T. Reid IV, Michael Yoder, Jordan L. Vimont and Ryan M. Goldstein of Reid Collins & Tsai LLP.

The case is Acela Investments LLC et al. v. Raymond DiFalco et al., case number 2018-0558, in the Court of Chancery of the State of Delaware.

–Editing by Jack Karp.

In the past several months, I have written extensively about the astounding case still going on in Delaware’s Chancery Court involving TransPerfect Global, whereby Chief Chancellor Andre Bouchard has ordered the sale of a private, extremely profitable company. According to my expert legal sources, the Delaware Chancery Court is under no duty to insert itself, and replace the free market by adjudicating a solution when there are simply disagreements between stockholders that involve no wrong doing. This company should not be dissolved under the present circumstances. Chancellor Bouchard has seemingly made a radical, rogue, and reckless decision that could damage the state of Delaware’s corporate future. TransPerfect has annual revenue of approximately $500 million and 4,000 employees in 90 different cities worldwide. It also happens to exemplify the American dream, where two people had an idea and created a successful business. Unfortunately, Elizabeth Elting now wants an immediate exit strategy and is using the valuable resources of the court to manipulate a sale process that gives her a share price that she is not entitled to on the open market and is selfishly leaving the employees up in the air. Basically, Chancellor Bouchard has essentially applied family court principles to this business saying, in effect, that when two people get a divorce and cannot agree what to do with the house, the house must be sold to a third-party, and the monies received are to be split equally. Why is this wrong? Under Section 226 of the Delaware Business Law when two or more shareholders cannot agree, the court can order the sale of the company, but there is one key difference. There must be a showing of irreparable harm. The easiest way to determine irreparable harm is by a very simple indicator. Is the company profitable? TransPerfect Global has been extremely profitable every year of its 24-year existence and continues to thrive. So where is the irreparable harm Chancellor Bouchard? Just because one owner claims she doesn’t want to work with her partner anymore doesn’t mean the Court should intervene. Your “equitable” solution is a dangerous precedent which will not only scare companies away from Delaware, but clog our judicial system with merit-less cases whenever a stockholder wants a better deal than they negotiated. Interestingly this is only part of the problem, because in this case there are not just two stockholders, there is a third, and that changes things drastically under Delaware Law. Plaintiff Elting owns 50%, Defendant Shawe owns 49%, and Shawe’s mother owns 1%. Besides being clearly prejudiced against Shawe, ignoring the overwhelming testimony of 10 witnesses to Elting’s 0, and operating under the appearance of several improprieties, Chancellor Bouchard has overreached his authority in another way that is just as equally threatening to the incorporation business that Delaware relies so heavily upon. This type of judicial overreach is so outrageous that many legal experts are truly fearful of the future of this State’s reputation. The bottom line is that Chancellor Bouchard is ignoring the fact that there are three stockholders and saying basically that “because Shawe’s mother usually votes with him, it is the same as there being only two.” This action by Chancellor Bouchard is unprecedented, has the potential to create turmoil and needless litigation in the business community, and has prompted employees and concerned citizens to organize to bring about change in the law; whereby a Judge cannot arbitrarily order the sale of a company when legal precedent states otherwise. In reality, they shouldn’t have to change it, because Bouchard is already acting outside what the legislature intended his powers to be by fabricating the “irreparable harm” component. Senator Colin Bonini (R), much to his credit, proposed Senate Concurrent Resolution 91 which basically requested that the Delaware Bar Association review the law and come up with viable legal alternatives to rulings of this sort. The resolution was non-binding, harmless in all respects, and was intended to open the door for potential legislation if after review and discussion changes were determined to be reasonable. Unfortunately the proposal never came to a vote due to a lack of time and lack of understanding on both sides of the political aisle. Not really knowing the facts of the case, certain establishment politicians who wanted to maintain the “status quo,” regardless of this apparent inequity, planted their feet and closed their minds to positive change and clarification of the law. Senate Minority Leader Gary Simpson could have facilitated the vote on this issue, but chose not to do so. According to Senator Simpson, he contacted former Chief Chancellor Chandler who was a highly respected Sussex County Judge. Chandler advised Senator Simpson that often the Chancery Court orders the sale of companies when there are disagreements in 50%/50% partnerships, however Senator Simpson did not tell him that this was a highly profitable company, that the decision was unprecedented in the history of Delaware, and that there were three stockholders and not just two. As quoted in the News Journal– “We have a reputation in Delaware for having a Chancery Court where litigants and their attorneys know how Delaware law reads,” said State Sen. Minority Leader Gary F. Simpson, a Republican and opponent of changing the court’s authority. “To give uncertainty because a party may be able to persuade the Delaware Legislature to change things is just bad.” Well folks if something is wrong in the law, and something is inequitable, or allows a freshman judge to interpret it in an inequitable way, then the law needs to be changed. I disagree with Senator Simpson and others who failed to support this positive attempt at making Delaware’s Chancery Court and state laws better and more business friendly, with less uncertainty. Corporate litigants, who have disputes, should be able to count on Delaware for fair and equitable solutions under the law; and our laws should not be frozen in time when they are ambiguous enough for Chancellors to abuse their discretion by way of an unclear loophole. Frankly, according to my sources in the legal community, Chancellor Bouchard has already tarnished his own personal reputation with his handling of TransPerfect case. Regardless, there is a larger cause for all Delawareans that hangs in the balance. Our business-friendly reputation as the nation’s corporate capital and all the thousands of jobs this creates is now at stake. Our state’s reputation for predicable and reasonable adjudication of business disputes is essential to the economy and the people of Delaware. If Bouchard wants to gamble, he should go Dover Downs with his own money. He should not be betting Delaware’s reputation from the bench with arbitrary and capricious decisions. Regardless, this writer will continue watching and reporting on this remarkable case in Delaware’s Chancery Court with the Honorable Chancellor Andre Bouchard presiding. The “rub” in this case is not going to go away and there is no doubt that appeals will be taken and there will be another campaign at correcting the law again in January. As always your comments are welcome. As always, with Delaware’s best interest in mind Respectfully Submitted, JUDSON Bennett-Coastal Network Delaware Companies at Risk  Article about Rudolph Giuliani and Chancellor Bouchard Dear Chancellor Bouchard—An unAmerican decision that hurts Delaware’s corporate credibility The article linked here was written by Jeffrey Mordock at Delaware Online, and is a follow up to the looming decision that had been scheduled for Wednesday, April 27th by Delaware’s Chief Chancellor Andre Bouchard – who initially had seemed to be siding with one party, rather than take an equitable stance. The Court of Chancery is Delaware’s equity court and decides what is to happen when there are disputes or legal problems involving a Delaware Corporation. From the rulings so far, the indication was that Bouchard was going to make an extreme decision where a successful company will be forced to be sold. What would you call a situation where a Delaware Corporation named TransPerfect Global, a very successful $500 million dollar company operating in New York City, that hires 4000 people, is being forced by the Chancery Court to be sold, just because one stockholder chooses to be ridiculously unreasonable? What if it is apparent that Delaware’s Chief Chancellor, Andre Bouchard refused to address the evidence presented to him? I call it inequitable, especially when the company will most likely be put up for sale and the many jobs may go overseas, thus risking putting 4,000 people out of work. Does this sound equitable? He balked at it instead. Is it right, is it fair to force a company to be sold and to put sanctions on one of the owners based on irrelevant and misleading information that has nothing to do with fairness. Is it not suspicious or at least the appearance of an impropriety when the presiding Judge who is the sole decision maker on this company’s outcome sits on an educational panel with the plaintiff’s attorney? The bottom line is that a single Judge named Andre Bouchard, Chief Chancellor of the State of Delaware’s Chancery Court is able to arbitrarily make or break a viable company. Seems un-American to this writer. Former Mayor Rudy Giuliani agrees—read the fascinating article below. Samuel Waltz, a writer for the Delaware Business Times, also wrote on this topic and explained the fact of Elizabeth Elting’s desire for a control premium, and how it seemed as if Chancellor Bouchard was considering offering it. 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 Employees Rally to Save Company As the story continues, 600+ employees of TransPerfect rallied to save the company.They signed and mailed a public letter to Chancellor Bouchard begging not to permit the company the sale to an outsider, and paid for a two page ad featuring the public letter in a Delaware newspaper. On April 27, 2016, Chancellor Bouchard seemed to have yielded a little and taken heed of the various warnings. He blasted the idea of imposing an arbitrary non-compete on half owner Phillip Shawe and suggested he would not allow one. Bouchard also pushed his decision off 30 days and demanded that the parties settle it outside of his courtroom. Court Involvement Should Chancellor Bouchard Demand the two parties settle outside of court? Top of Form Bottom of Form See results without voting Elizabeth Elting’s Position One Elizabeth Elting, 50% owner of TransPerfect, seems to be holding up the equitable sale of TransPerfect. Phillip Shawe, the other owner, has offered her 50% of the value and Elting turned it down. She wanted Chancellor Bouchard to offer the control premium, impose a noncompete and force the company to an open sale – hoping to command higher than the $300M offered (higher than 50%).   Link to Rudolph Giuliani Article Jeffrey Mordock’s Article on the Hearing  
Full Page TransPerfect Employee Ad to Bouchard

Full Page TransPerfect Employee Ad to Bouchard

    SOURCE: http://hubpages.com/travel/Dear-Chancellor-BouchardAn-unAmerican-decision-that-hurts-Delawares-corporate-credibility