I am constantly monitoring the decisions of Delaware’s Chancellor Bouchard and frankly, in my view, after his grotesque and extremely biased handling of the infamous TransPerfect case, and the well-known fiasco involving the corrupt appointment of one of his cronies as Clerk of the Sussex County Register of Wills office prior to the TransPerfect debacle, I believe he no longer passes the ethical standards of legality. These incidents have given this investigative reporter many reasons to bird-dog this political, poorly-vetted, and as I see it, predisposed, and subjective Chancellor of Delaware’s nationally acclaimed equity court.
Check out the recent decision in the Meso vs. Roche case covered in Law360’s story below. Here we go again with Andre Bouchard and, in my opinion, his court full of never-ending conflicts of interest. In this case, Chancellor Andre Bouchard apparently cost a legitimate company big time.
Bouchard, as a private lawyer, was hired by the Chancery Court in 2011 — which was run by his former intern at Skadden Arps, Leo Strine, then Chancery Court Chancellor — to defend the Chancery Court from a lawsuit filed by the Delaware Coalition for Open Government seeking to prevent the Chancery Court from holding their proceedings secretly. At the time of that lawsuit, Vice Chancellor Donald Parsons was sitting on the bench and obviously got to know his lawyer Andre Bouchard very well, as most clients do. Fast forward to June 2014 and Bouchard is now representing Roche Diagnostics GmbH in an intellectual property dispute with the Plaintiff Meso Diagnostics while he was still a private lawyer.
Prior to starting the case, it is required by all attorneys to inform their adversaries of any special relationships they might have had with the judge prior to the case starting. Of course, Bouchard made no mention of the glaring conflict of interest that he had defended Vice Chancellor Parsons just a few years before, which would have surely prompted the opposition to file a motion to have Chancellor Parsons recuse himself from the case. Seems to be a habitual problem with this Chancellor?
Sure enough, two months before Chancellor Parsons filed a decision dismissing the case against Bouchard’s client Roche Diagnostics and thereby costing the plaintiff, Meso Scale Diagnostics, millions of dollars, Bouchard withdraws from the case to become — that’s right you guessed it, folks — the new Chief Chancellor of the Chancery Court, effectively becoming Parson’s boss. It wasn’t until a few years later in 2018 that Meso discovered Bouchard’s huge conflict of interest with Chancellor Parsons.
This discovery prompted Meso to make a motion to vacate the judgment. The motion was heard by Chancellor Slights in the Chancery Court, whose office is a few doors down the hall from Bouchard. Of course, to no one’s surprise, Chancellor Slights ruled that it was ridiculous to think that this relationship between Bouchard and Parsons would have any effect on the case. While most people would recognize this as outrageous, in Delaware, it’s just another day. My friends, this kind of underhanded trickery, from my perspective, is exactly what’s wrong with Delaware these days, under Andre Bouchard. He’s apparently made a mockery of the Chancery Court while making millions representing them.
These vice-chancellors, under “Boss” Bouchard, in my opinion, stick together, collude and regulate accordingly! Folks– IT STINKS! It’s bad news for all concerned. It has become apparent to this lifetime Delawarean that making up laws to suit profitable friendships is a uniquely Delaware trait.
As far as I’m concerned, Bouchard never should have been given the job in the first place. Perhaps the Delaware Senate should spend some more time researching prospective candidates for judgeships. When he was confirmed, his friends on the judiciary committee led by now “thrown out” Greg LaVelle, didn’t ask one question! After years of observation, research, and poring over court documents, I truly believe Andre Bouchard is protected by a very friendly Bar Association, which provides cover for his arrogant incompetence! Delaware has evolved into an incestuous legal community with poorly-planned and ill-conceived appointments that betray the businesses incorporated there.
Folks, please read the Law360 news story below, written by Jeff Montgomery, who captures the difficulties that are created in a Chancery Court, where controversial rulings are constantly happening, caused indirectly or directly by Andre Bouchard. In my view, Delaware would be better off cleaning house and removing Chancellor Bouchard from the bench.
SCROLL DOWN and read the article and let me know if you agree.
As always your comments are welcome and appreciated!
Law360 (May 18, 2020, 6:08 PM EDT) — The Delaware Chancery Court dismissed with prejudice on Monday a suit seeking to vacate a 2014 ruling allegedly tainted by Chancellor Andre G. Bouchard’s work on the case before taking the bench while also representing the court in a separate lawsuit.
In a telephone ruling, Vice Chancellor Joseph R. Slights III rejected Meso Scale Diagnostics LLC’s claim that now-retired Vice Chancellor Donald Parsons should have recused himself because of alleged conflicts created by Chancellor Bouchard’s representation of Meso adversary Roche Diagnostics GmbH in an intellectual property dispute while still at the helm of Bouchard Margules & Friedlander PA.
Then-litigator Bouchard left the Meso-Roche case a month before taking his current position, and two months before Vice Chancellor Parsons ruled against Meso on June 25, 2014, finding that Meso was not a party to a license agreement Roche acquired in a merger. Meso had claimed that Vice Chancellor Parsons had been influenced by Chancellor Bouchard’s representation of the Chancery in unrelated litigation over the closing of arbitration proceedings presided over by members of the court.
But Vice Chancellor Slights said there was no reasonable inference of harm from Vice Chancellor Parsons’ actions or the claims made by Meso in connection with the overlap of Chancellor Bouchard’s work for Roche and his work for the Chancery Court and the state in that case, which involved First Amendment issues.
“The best the complaint can muster is that Vice Chancellor Parsons may have felt a debt of gratitude to then-attorney Bouchard,” Vice Chancellor Slights said, rejecting Meso’s due process claims that “the typical judge in Vice Chancellor Parson’s position would have had an unconstitutional potential for bias while presiding over the Meso v. Roche litigation.”
Vice Chancellor Slights pointed to a string of state, federal and appellate decisions supporting a finding that Meso’s claims failed to meet court rules for relief from judgment, and failed to support claims that the decision should be automatically void because of the lack of recusal.
“Notwithstanding our judicial system’s strong interest in the finality of judgment, Meso argues, in essence, that I should completely ignore that it is seeking to vacate this court’s final judgment in Meso v Roche long after it was entered,” the vice chancellor noted.
In particular, the vice chancellor rejected arguments that a 2010 U.S. Supreme Court decision in United Student Aid Funds v. Espinosa supported the idea that “any due process violation” will trigger relief from a decision. He also said that a 2016 high court decision in Williams v. Pennsylvania , which found an impermissible risk of bias in a judge’s personal involvement with a prosecutor in a case before him, did not apply to the facts in the Delaware case.
Meso’s argument, Vice Chancellor Slights said, would mean that any decisions or judgments in a case that was before Vice Chancellor Parsons during the First Amendment case in Delaware “are now instantly void, without any assessment of materiality.” He added: “Such a holding would, to borrow from Espinosa, ‘swallow the rule.’
Also working against Meso’s position, the vice chancellor said, is that a separate part of the court’s rules require prompt action on motions to vacate a judgment.
Meso argued that it learned of Chancellor Bouchard’s involvement in the overlapping First Amendment case only during an internet search in 2018. The company said that it took another year to find Delaware counsel for the suit to void the ruling and require a new trial.
“Meso has not requested relief in a reasonable time nor has it identified the type of extraordinary circumstances that might justify relief,” the vice chancellor said. He described as “conspicuously absent” any information on whether or not any of Meso’s attorneys were aware of Chancellor Bouchard’s involvement in the First Amendment case.
“Meso maintained it had reached out to its agents, including its former counsel’s law firm, but that is not pled in the complaint,” the vice chancellor said, adding that “Meso is not entitled to reasonable inferences flowing from facts it has not pled.”
Neither Meso nor Roche immediately responded to requests for comment.
Meso is represented by David L. Finger of Finger & Slanina LLC, and William S. Consovoy and J. Michael Connolly of Consovoy McCarthy Park PLLC.
Roche is represented by Donald J. Wolfe, Matthew E. Fischer, Timothy R. Dudderar, J. Matthew Belger and Andrew H. Sauder of Potter Anderson & Corroon LLP, and Thomas L. Shriner Jr. and James T. McKeown of Foley & Lardner LLP.
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 Vince Sullivan, Caroline Simson and Vin Gurrieri. Editing by Adam LoBelia.
Read more at: https://www.law360.com/articles/1274491?utm_source=ios-shared&utm_medium=ios&utm_campaign=ios-shared?copied=1
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:
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.
Once again folks, we have the U.S. Department of Justice chiming in on Skadden Arps and our Chancery Court. And, it ain’t pretty! The mess Bouchard and Pincus made while emptying TransPerfect’s corporate coffers, in my opinion, to benefit themselves and it keeps getting worse. Please remember who has been telling you that the many awful black-eyes will keep coming and coming for our state, and for our Chancery Court, under the inauspicious leadership of Andre Bouchard.
The latest headline: The DOJ just accused TransPerfect of discriminating against dual citizens and non-U.S. citizens when helping Clifford Chance’s staff organize a project in 2017.
NEWSFLASH folks: TransPerfect Management wasn’t in charge in 2017, our Delaware Chancery Court was. And it is plain-as day to me that Skadden was so busy fleecing and mismanaging the company as I see it with its illegal 3-year $1,475-per-hour occupation of the company that apparently it supervised conduct that the DOJ believes is absolutely illegal.
THIS IS OUTRIGHT CRAZY!! WHEN WILL WE STAND UP TO THIS PERCEIVED CORRUPTION IN THE DELAWARE CHANCERY? WHEN, I ASK?!
For more on how Chancellor Bouchard, Custodian Robert Pincus, and repeat DOJ offender — Skadden Arps — used the Chancery Court’s power to direct what the DOJ calls a “pattern of discriminatory and illegal behavior” — Please read the story below.
Folks, It’s only going to get worse and worse for the Chancery Court, who still will not, despite repeated requests, unseal the documents in the case.
MORE THAN EVER, I would love to hear your thoughts on this situation, and any comments on how honest on-lookers can bring these Delaware elites to justice.
Originally published by Law360:
By Dani Kass
Law360 (May 9, 2019, 11:36 PM EDT) — The U.S. Department of Justice has accused TransPerfect of discriminating against dual citizens and non-U.S. citizens when helping Clifford Chance staff up a project in 2017.
The DOJ’s complaint, filed Wednesday in the Office of the Chief Administrative Hearing Officer, claims the staffing company violated the Immigration and Nationality Act when it honored the firm’s request to only recruit and hire people who were citizens of the U.S. exclusively. Clifford Chance LLP ended the DOJ’s probe into it in August by paying a $132,000 penalty, without admitting liability.
TransPerfect’s attorney, Martin P. Russo of Kruzhkov Russo PLLC, told Law360 that the alleged misconduct took place while the company was under a court-ordered custodianship. As part of a high-profile fight between TransPerfect’s founders, Philip Shawe and Elizabeth Elting, for control of the company, a Delaware Chancery Court in 2015 placed Skadden Arps Slate Meagher & Flom LLP’s Robert B. Pincus as custodian, namely to sell the business. Shawe ended up buying Elting out in a deal the court approved in February 2018, effectively ending Pincus’ custodianship.
The DOJ says the firm — which it does not identify in the complaint — used TransPerfect to staff up on attorneys for a temporary document review project. For several months in 2017, TransPerfect only recruited and hired U.S. citizens, and for most of the time only hired citizens who didn’t hold a second passport, the government claims.
The INA bars employers from intentionally discriminating against U.S. citizens or nationals, lawful permanent residents, asylees, and refugees during the hiring process, unless it falls under a legal carve out, the DOJ said.
“TransPerfect maintains that it did not violate the statutes alleged or engage in any conduct that was outside the bounds of the law,” Russo said.
In August, the DOJ said the U.S. arm of Clifford Chance violated anti-discrimination provisions of the INA by terminating three employees and refusing to consider eligible job candidates for 36 document-review roles because of their citizenship status from March to July 2017.
Clifford Chance had told investigators that it placed a citizenship-based staffing restriction on a specific document-review project because it believed it was required by the International Traffic in Arms Regulations, or ITAR, which in certain circumstances requires only a “U.S. person” to review highly sensitive materials.
But the DOJ said the firm misunderstood its obligations under the ITAR and that the regulations did not excuse discrimination on the basis of immigration status or nationality.
The new suit is against Chancery Staffing Solutions LLC, which is the successor to TransPerfect Staffing Solutions LLC. The company does business now as TransPerfect Staffing Solutions and TransPerfect Legal Solutions, the DOJ said. The government is hoping to get civil penalties, back pay on behalf of the workers who faced alleged discrimination, and other relief to “correct and prevent discrimination.”
“Staffing agencies must be diligent in satisfying their obligation under the INA to avoid citizenship status discrimination against U.S. citizens and protected non-citizens, even when that discrimination is requested by a client,” Eric Dreiband of the DOJ’s Civil Rights Division said in a statement. “The Department of Justice is committed to challenging such unlawful and discriminatory hiring practices.”
Skadden and Clifford Chance didn’t immediately respond to requests for comment late Thursday.
The government is represented by Gloria Yi, Julia Heming Segal and Sejal Jhaveri of the DOJ’s Civil Rights Division.
TransPerfect is represented by Martin P. Russo of Kruzhkov Russo PLLC.
The case is U.S. v. Chancery Staffing Solutions LLC et al., case number unknown, in the Office of the Chief Administrative Hearing Officer.
-Additional reporting by Sam Reisman. Editing by Adam LoBelia.
Source: Law360Possible Legal Precedents In TransPerfect Global
By Melvin Schweitzer August 2, 2017, 11:53 AM EDT August 2, 2017, 11:53 AM EDT In 2015, the Delaware Chancery Court ordered the sale of the translation services company, TransPerfect Global, as part of resolving a dispute between the company’s largest shareholders, Phil Shawe, Shirley Shawe and Liz Elting. The Delaware Supreme Court earlier this year affirmed the Chancery Court decision with one of five justices dissenting. In the aftermath of the TransPerfect decision, much remains open regarding how much deference the Chancery Court should give to directors to resolve internal disputes, and when a directed sale is an appropriate remedy. The Delaware Chancery is considered the gold standard among corporations globally, and for that very reason, many find it hard to consider the possibility that the court could occasionally be wrong. This may be one of those cases. To bring attention to the issue, Philip Shawe began a scholarship competition among law school students to publicly explore the case as if it were being challenged at the U.S. Supreme Court level. The final oral arguments were heard on July 20 in Brooklyn before a panel of judges who also helped narrow the field of entry briefs to the final 10. Myself, retired Justice Carmen Ciparick, my former director of interns Joseph Hansen, and Harvard professor Alan Dershowitz served as the mock Supreme Court and we directed the moot court proceedings. Steven Hermosa, a recent graduate of the University of Florida, Levin School of Law, student turned in the top-scoring brief and had the best oral defense. TransPerfect was started in 1992 by two New York University business school classmates, Philip Shawe and Elizabeth Elting, while they were still in school. The privately held Delaware corporation has 100 shares outstanding, 50 owned by Elting, 49 owned by Shawe, and one share owned by Shawe’s mother, Shirley Shawe. Though the corporate charter provides for three directors, Elting and Shawe have served as the only directors since 2007, and have managed the company as two equal shareholders. Since 2012, despite the company’s successful performance for two decades, Shawe and Elting’s personal relationship deteriorated. Litigation between these principals ensued. The principal case was heard in the Delaware Court of Chancery, which ordered a sale of the profitable company. The Delaware Supreme Court affirmed the Court of Chancery, with one justice filing a lengthy dissent. This has now led to a federal court action by the Shawes, which raises alleged violations of the United States Constitution by Delaware’s courts and ultimately may reach the U.S. Supreme Court. The Delaware Court of Chancery has broad statutory powers to address corporate deadlocks that it deems detrimental to corporate shareholders, employees and the corporation itself. The Court of Chancery may appoint a “custodian” if the business of the corporation is suffering or threatened with irreparable injury or if required action by the board cannot be obtained. The purpose of such intervention is to protect the company, and the means used to achieve that goal are required to be tempered to be the least intrusive possible. Here, the Court of Chancery held a bench trial and found that both sides had engaged in “mutual hostaging.” Shawe, by not agreeing to large distributions demanded by Elting, and Elting remarkably exerted leverage over Shawe by refusing to exercise her fiduciary duty to act on important business decisions. The court found that the company’s business was threatened with irreparable harm even though it was extremely profitable. The court pointed to corporate morale, relationships with clients, and Elting’s refusal to agree on acquisitions. It appointed a custodian to be involved in managerial decision-making, but also to conduct an auction sale of the shares held by the Shawes and Elting. The Shawes remain unalterably opposed to selling their stock. The Delaware Supreme Court affirmed the Chancery Court’s decision and declined to hear the constitutional argument advanced by Shirley Shawe that a forced sale of her share violated the due process and takings clause of the Fifth and 14th Amendments. Accordingly, the Delaware Supreme Court did not consider the constitutional safeguard that provides, “No person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” The principal “takings” argument is that Delaware defines stock ownership as personal property and that the forced sale over the Shawes’ objection deprives them of their rights to possess, use and dispose of their property as they see fit. Such sale is violative of the Constitution because it is for a nonpublic use, (i.e. breaking a deadlock is a decision of what is best for the corporation and its shareholders and employees collectively). Things like employee morale, customer uncertainty, and damage to the company’s reputation are private harms. No public purpose is involved. The U.S. Supreme Court has long recognized in cases involving real property/economically depressed areas (Kelo v. City of New London, 545 U.S. 469 [2005], Justice Anthony Kennedy concurring but urging that a legitimate public purpose be a fact-based test) and intangible property (Ruckelshaus v. Monsanto Co., 467 U.S. 986 [1984]), for example, that there must be a broad public benefit to sustain a taking. To be sure, the “public use clause” is not satisfied simply when one person’s property is taken for the benefit of another private person, even if compensation is paid. Delaware’s argument presumably is that the state’s broad statutory power to regulate the internal affairs of the corporations that it charters is a “public purpose,” and that if it has the right to dissolve companies and approve the transfer of stock in a merger, then its public purpose surely extends to ordering the sale of stock in a deadlock situation adversely affecting one its corporations. Shawe’s argument with respect to due process is that the Court of Chancery issued the sale order without proper notice. Due process is met where the state can show that a particular procedure bears the “sanction of settled usage.” Due process in any proceeding must be reasonably calculated to apprise parties about the legal remedies for a deprivation of property by the state. Here, the Shawes argue that the relevant provisions of the Delaware General Corporation Law failed to give the Shawes fair notice that the Chancery Court could exercise a power analogous to eminent domain in forcing them to sell their shares against their will. Eminent domain cases in Delaware are heard in a different court — the Superior Court. Also, Section 226 only speaks of liquidating a corporation’s affairs and distributing its assets. Nothing in the statute contemplates the seizure and sale of an individual’s stock. Finally, as the lengthy dissent in the Delaware Supreme Court noted, the parties could not point to a single case in the history of Section 226 jurisprudence where a court ordered a custodial sale of shares over a shareholder’s objection. Along these lines, the Shawes argue that they could not have reasonably known that their property was in jeopardy of such a manner. Delaware, though, would argue that its statutory scheme, which allows dissolution of companies and hostile mergers, puts all shareholders on notice of the Chancery Court’s broad power to affect corporations, including forcing a sale. Should the case reach the U.S. Supreme Court, the justices will have to weigh Delaware’s argument for its public-purpose “taking” against TransPerfect’s facts of shareholders in a highly profitable company being made to sell their shares because of corporate deadlock — even when the Chancery Court has less draconian remedies in its statute. As for due process, the justices will have to weigh Delaware’s argument that its broad corporate statutory powers amply put a litigant on notice that such a sale could have been reasonably anticipated as one of Chancery’s options, even though there is no express statutory provision authorizing such action and it has never been done before over the objections of a shareholder, as is the case here. Author’s note: Some of the facts and arguments discussed in this analysis are based on excerpts from the briefs that were submitted to The Philip R. Shawe Scholarship Competition. Melvin L. Schweitzer, now a counsel at Liddle & Robinson LLP, served 10 years on the New York state bench, including as acting Supreme Court justice (Commercial Division, Manhattan) handling complex commercial cases, and as a judge of the New York State Court of Claims. DISCLOSURE: The author is one of four judges for the The Philip R. Shawe Scholarship Competition, which is sponsored by one of the litigants in the case discussed and asked law school students to prepare the best argument for reversing the Delaware Chancery Court ruling.