+
More

In Vacating Former Chancellor Bouchard’s Orders Against Shawe as ‘Improper and Personal’

Dear Friends, A broad thank you for the overwhelming feedback on my recent column about some semblance of justice in the TransPerfect case. Victory and vindication for Phil Shawe from nearly 10 years of Andre Bouchard’s diabolical and premeditated abuse of power is now at hand — it took far too many years — but justice finally prevailed. I have done my best to shine a bright light on Bouchard’s Chancery Court corruption — and reading your many responses from this column truly makes me feel as though my efforts to fight corruption and make Delaware better have not gone in vain. His successors and Skadden Arps’ friends should know my watchful eye remains upon them. Respectfully Yours, JUDSON Bennett, Coastal Network Here’s the top 20. Your thoughts are always appreciated. Keep ’em coming! “Glad to see Bouchard’s diabolical plan didn’t work.” -Sam “The truth comes out. In our court system, it takes years!” -Gerard “Glad he’s not on the hook for these sanctions. Sounds like a white-collar way to steal someone’s money.” -Franklin “This feels like a vendetta against the judge who already lost his job. He’s been embarrassed and dethroned. How else should he pay?” -Joan “This Bouchard guy is a goon and he’s gone.” -Andy “Glad good is winning. Keep the coverage coming.” -John “This story is hard to follow, but I’m glad Darth Vader lost.” -Pamela “I’m not sure exactly what you’re saying here, Judson. I’m glad the good guy beat the bad guy. -Eric “Shawe has been unbending in his pursuit for justice. Have to tip my cap to for him not giving up. -Tim “I’m confused by this one, sir. Glad you’re covering this and not me.” -Robert “Someone has to prevail over this corrupt system. Good for him!” -Gary “I love when truth prevails. It most often does, but takes far too long.” -Sandra “Thank God the press got involved. No one would have ever known.” -Bobby “How could Bouchard get so close to stealing this company? How is this legal?” -Tom “Justice finally to these crooks. Good work, Judson.” -Ernie “Strine brought in Bouchard and together they sunk the ship.” -Keith “They deserve what they got for destroying the lives of the workers.” -Joanna “I still think whoever took their places will not learn from this injustice.” -Frank “Time for this court to pay for these deeds. Keep after them Jud!” -Jane “I remain incredulous. This is too deep rooted.” -WilliamThe media is once again doing their news spin, folks, in the Federal Judge ruling in the TransPerfect case, painting it as a win for Andre Bouchard. Yet if you read the Law.com story below, you’ll see it’s a huge victory for TransPerfect as the federal court found that Bouchard ordered the company to pay “$44 million in undocumented fees.” Whoa, folks, $44 million in undocumented fees?! That’s highway robbery in broad daylight! The company’s victory will help others not get screwed or bullied the way TransPerfect did in Delaware by greedy, manipulative Bouchard. TransPerfect is lifting the veil for all to see against Bouchard’s crony-istic, secretive Star Chamber Chancery Court. This has been long overdue folks. The ruling is a “clear admission of the inequity that was imposed upon TransPerfect and (its CEO) Shawe,” the company’s attorney said in the story. It also forced Bouchard to open his confidentiality order, which may have been ruled unconstitutional if he hadn’t. As Shawe himself put it, “It also put Bouchard and the Chancery Court on notice, which will help prevent future violations of civil rights.” Read the story below for the details. Is it any wonder why Bouchard is fleeing? As always, your feedback is welcome and appreciated. Respectfully Yours, [avatar user=”Judson Bennett” size=”thumbnail” align=”left” link=”https://twitter.com/Judson_Bennett” target=”_blank”]Judson Bennett, Coastal Network[/avatar]
US Judge, Aiming to Avoid Conflict With State Case, Dismisses TransPerfect Claims Against Bouchard U.S. District Judge Mark A. Kearney found the court didn’t have the jurisdiction over the constitutionality of a confidentiality order that’s no longer in place By Ellen Bardash | April 14, 2021 at 05:38 PM Chancellor Andre Bouchard of the Delaware Court of Chancery
A federal judge has dismissed TransPerfect’s claims against Chancellor Andre Bouchard, finding the U.S. District Court lacks jurisdiction and observing the potential for a federal declaration to interfere with pending state matters. Judge Mark A. Kearney’s reasoning for dismissing the claims stemmed in large part from Bouchard’s decision to unseal billing documents. Bouchard’s unsealing order, which came shortly after the lawsuit was filed, satisfied a key goal of the litigation begun by New York-based TransPerfect and its CEO, Phil Shawe. Kearney’s decision followed a hearing at the end of March in which William T. Burke of Williams & Connolly argued on Bouchard’s behalf that the case was moot with state-level legal options available, while counsel for TransPerfect argued Bouchard’s handling of the fee petitions in the TransPerfect custodianship case in the Court of Chancery should be declared unconstitutional regardless. TransPerfect and Shawe filed the federal suit alleging Bouchard’s order making billing records for a custodian confidential between November 2019 and January, when the order was lifted, violated their First and 14th Amendment rights. Kearney found the court didn’t have the jurisdiction over the constitutionality of a confidentiality order that’s no longer in place, barring proof Bouchard is likely to reinstate the order. Without the claim moot and the ability to have an order make any actual change in the custodianship case no longer a possibility, any ruling on a First Amendment claim would be an advisory opinion only. “So you may ask: no harm, no foul?” Kearney wrote. “The answer is yes at least in federal court relating to the First Amendment claim.” The court found several reasons it was unlikely to assume Bouchard might reinstate confidentiality. First, the only unresolved issues in the custodianship case are those of the fees themselves, giving the court no clear reason to re-seal documents as the end of the case looms. Second, the window in which Bouchard could do so is narrow, as he’s scheduled to retire in less than a month. As for the claim that TransPerfect and Shawe’s due process rights were violated, Kearney wrote the court couldn’t consider it either while the same issues are pending in the state court system. But unlike the First Amendment claim, he wrote, he disagreed with Bouchard’s counsel’s argument that the claim was moot. “Our Court of Appeals instructs we should ‘not dismiss a case as moot,’ even if the nature of the injury changes during the lawsuit, if ‘secondary or collateral injuries survive after resolution of the primary injury,’” Kearney wrote. “Because we find such ‘secondary or collateral’ injuries asserted here, we decline to dismiss the due process challenges in the amended Complaint as moot.” In total, Bouchard ordered TransPerfect to pay a $44.5 million in undocumented fees for custodian Robert Pincus, at the time with Skadden, Arps, Slate, Meagher & Flom, as well as $950,000 from an escrow account for Pincus’ work following TransPerfect’s sale’s closing. “We consider the ruling a victory in that the Federal Court found Chancellor Bouchard ordered TransPerfect to pay ‘$44 million in undocumented fees’ to his former law firm,” Shawe said. “It also put Bouchard and the Chancery Court on notice, which will help prevent future violations of civil rights.” TransPerfect maintains Bouchard’s rolling back the confidentiality order weeks after the federal suit was followed was done in an effort to eliminate the suit and that doing so served as an admission that the court didn’t have the authority to seal the documents in the first place. “The Chancellor and his highly paid lawyers orchestrated the reversal of the offending order to game the system and avoid the finding of unconstitutionality in federal court,” said Martin Russo, Shawe’s lead counsel. “It is a clear admission of the inequity that was imposed upon TransPerfect and Mr. Shawe.” Ryan Costa of the Delaware Department of Justice declined to comment on the case Wednesday.Dear Friends, Andre Bouchard, Chancellor of the Delaware Court of Chancery (a court with a unique 228 year tradition of providing equity and resolutions for companies incorporated in the State of Delaware) is quitting 5 years before his term is up. In the wake of controversy and intense criticism, especially in his seemingly biased handling of the TransPerfect case. In my view it was just a matter of time before some viable complaints put Bouchard in deep trouble. Frankly, any praises or compliments about Andre Bouchard stated by the Governor or other Judges ring hollow to my ears as I have observed this man in action and followed his rulings in detail. The arrogance and obvious conflicts of interest that encompass Bouchard have in my opinion reduced the standards of Delaware’s equity court and hurt Delaware’s credibility nationally.. “Confronting a court expansion, a burgeoning caseload, and a pandemic, Chancellor Bouchard led the Court of Chancery with humility, imagination, and grace,” Delaware Supreme Court Chief Justice Collins J. Seitz Jr. said in a statement.“ We thank him for his public service, and wish him the best in life after the bench.” How nice, and in my view a vociferous cover-up statement. I never saw humility, never saw grace, and the only imagination I witnessed were controversial, unprecedented, subjective rulings that were not based on decided law. Good riddance Bouchard, Delaware is better off without you. Read the story below fromThe Delaware State News. As always your comments are welcome and appreciated. Sincerely yours, [avatar user=”Judson Bennett” size=”thumbnail” align=”left” link=”https://twitter.com/Judson_Bennett” target=”_blank”]JUDSON Bennett-Coastal Network[/avatar] Head of Chancery Court to retire Dec 29th, 2020 · by Matt Bittle DOVER — Andre Bouchard, the leading member of the Delaware Court of Chancery, announced Tuesday he will retire at the end of April. Gov. John Carney, with the help of a special committee of legal experts, will pick a replacement next year. Chancellor Bouchard, who spent 34 years in the field of corporate law, made the decision out of a desire to spend more time with family and pursue other unspecified interests, according to the courts. He will leave almost exactly seven years after his swearing-in. “The Court of Chancery is a revered place with a 228-year tradition of excellence. But what ultimately makes the court so special are the people who dedicate themselves to its mission, not only in the high-profile world of corporate law but in attending to the needs of many of our state’s most vulnerable citizens and whatever else calls out for equity,” he said. The well-respected court handles corporate matters from around the world and is a big reason Delaware is the legal home of more than 1 million corporations. Under Chancellor Bouchard, it grew from five to seven members in 2018, the first expansion since 1990. “Confronting a court expansion, a burgeoning caseload, and a pandemic, Chancellor Bouchard led the Court of Chancery with humility, imagination, and grace,” Delaware Supreme Court Chief Justice Collins J. Seitz Jr. said in a statement. “We thank him for his public service, and wish him the best in life after the bench.” A resident of Delaware dating back to his youth, Chancellor Bouchard graduated from Harvard Law School in 1986. Prior to being named to the court, he was the managing partner of a Wilmington corporate and commercial litigation boutique firm. He has been a frequent target of criticism from a group called Citizens for a Pro-Business Delaware and from New York businessman Philip Shawe. The group was formed in 2016 after Bouchard ordered the sale of a translation services company called TransPerfect because Mr. Shawe and fellow co-founder Elizabeth Elting, his former fiancee, were hopelessly deadlocked over its management. Among his various rulings in the case, Chancellor Bouchard ordered Mr. Shawe to pay his ex-fiancee $7.1 million in fees and expenses as sanctions for his “deplorable behavior.” In the sanctions ruling, the chancellor declared Mr. Shawe had intentionally sought to destroy information, failed to safeguard evidence and repeatedly lied under oath. Last week, attorneys for Mr. Shawe and TransPerfect filed a federal lawsuit against Chancellor Bouchard over billings by an attorney the chancellor appointed as a custodian to oversee the sale of TransPerfect. According to the lawsuit, Chancellor Bouchard has ordered TransPerfect to pay more than $45 million in fees and expenses to the custodian, his law firm and other advisers while refusing to allow Mr. Shawe access to billing and fee details unless he agrees to “gag orders” preventing the information from being disclosed to the public. Last year, members of the Delaware State Bar Association, including several former judges, took the unusual step of holding a news conference to defend Chancellor Bouchard against attacks by Citizens for a Pro-Business Delaware, which has said it is interested in promoting judicial transparency and accountability. Bar association officials suggested the group, which includes employees of TransPerfect, is simply a front for Mr. Shawe. Mr. Shawe continued to attack Chancellor Bouchard Tuesday, saying through a spokesman the next chancellor must “have a true sense of justice, informed by real world bench and business experience — not white male privilege — and not political connections.” The Associated Press contributed to this report. Staff writer Matt Bittle can be reached at 741-8250 or [email protected]. Follow @MatthewCBittle on Twitter.

Please check out this victory for TransPerfect. The real story here as I see it folks is that Bouchard and his court-appointed custodian, Skadden’s Robert Pincus — his former law partner, to whom he has ordered TransPerfect to pay $14 million, without being able to see even one invoice — was using this case to bad-mouth TransPerfect and Shawe, saying they were litigious.

Pay attention carefully here lawmakers: In my opinion, this is proof once again of the Chancery Court misleading for two reasons: One, Shawe was the “Defendant” against an advisor trying to claim a false fee over a transaction that the Custodian backed out of — to line his and his friends’ pockets with a $250 million court auction. And two, because TransPerfect and Shawe won the case.

Check out the lawyer’s closing quote in the story below: “It was refreshing to litigate outside of Delaware with truly neutral jurists who make decisions based on the facts of the case.” How refreshing! What does that say about Delaware, folks?!

I wanted to keep you in the loop on how much other judges are, in my opinion, seeing Bouchard’s antics for what they are: A three-ring circus designed solely to provide payola to his pals. I say shame on Bouchard for continuing to destroy the Chancery Court’s once pristine image with every breath he takes.


TransPerfect And CEO Phil Shawe Score Major Arbitration Victory Stemming From Controversial Delaware Chancery Court Decision

March 5, 2020

NEW YORK, March 5, 2020 /PRNewswire/ — TransPerfect, the world’s largest provider of language and technology solutions for global business, and CEO Phil Shawe, today announced emerging victorious in a New York State Supreme Court–ordered arbitration related to disputed advisor fees stemming from a controversial 2015 Delaware Chancery Court decision.

The victory is a decisive step toward ending the residual litigation created by the Delaware Chancery Court’s unprecedented decision to appoint a Custodian to control a thriving and profitable company for three years and to then sell it at public auction. Shawe, TransPerfect’s original Co-Founder and CEO, ultimately prevailed in Delaware court and in the auction, raising questions about the necessity of Chancellor Andre Bouchard mandating more than $250 million in fees and expenses to achieve a result that was available and obvious since the beginning of the proceedings. 

Shawe stated, “This is the first major victory against those who sought, or are still seeking, to take unfair advantage of TransPerfect stemming from the Delaware Chancery Court’s unprecedented intervention into a private, profitable, and thriving business.”

A complaint for breach of contract was filed in New York State Supreme Court by Cypress Partners, and Justice Jennifer G. Schecter issued an order compelling arbitration of the matter with JAMS Commercial Arbitration Tribunal. Cypress claimed they were entitled to a full fee for any transaction involving the TransPerfect auction process despite clear contract language to the contrary. The neutral JAMS tribunal reviewed all evidence and found no merit to the claims. Further, the arbitrators notably disregarded Chancery Court findings and dicta as having no bearing on the adjudicated matter. From start to finish, this binding arbitration battle in front of a New York panel lasted over 18 months.

Martin Russo of Russo PLLC, lead outside counsel for TransPerfect, commented, “It was refreshing to litigate outside of Delaware with truly neutral jurists who make decisions based on the facts of the case. In fair jurisdictions and forums, the rules compel triers of fact to rule on the evidence and do not allow undue influence from or favoring of friends and associates of the Court. TransPerfect has spent the last two years cleaning up the messes left behind by a series of bizarre and unpredictable rulings by Chancellor Bouchard, and we are pleased that this matter has been justly closed.”

About TransPerfect
TransPerfect is the world’s largest provider of language and technology solutions for global business. From offices in over 100 cities on six continents, TransPerfect offers a full range of services in 170+ languages to clients worldwide. More than 5,000 global organizations employ TransPerfect’s GlobalLink® Product Suite to simplify management of multilingual content. With an unparalleled commitment to quality and client service, TransPerfect is fully ISO 9001 and ISO 17100 certified. TransPerfect has global headquarters in New York, with regional headquarters in London and Hong Kong. For more information, please visit our website at www.transperfect.com.

I was eagerly watching the college football national championship game this week. I’m a big fan and have traveled far-and-wide to see Delaware’s team play over the years. While watching the game, I thought about next season and couldn’t help but feel happy for the folks over at TransPerfect. The company — almost disbanded by Andre Bouchard’s Chancery Court — will take a victory lap of sorts.

Next year, TransPerfect will begin sponsoring a Top 10 College Football Bowl Game, “The Music City Bowl”in Nashville, Tennesse. The game will see a Southeastern Conference (SEC) team take on a Big 10 Conference team, in what should be a strong matchup. If you’re going to put your company’s hard-earned money on the line, this is the way to spend it, rather than spending millions on Skadden Arps’ billings, which continue to this day, to the tune of nearly six figures, on average, each month.

In my opinion, it’s shameful how Skadden Arps is raiding the corporate coffers over at TransPerfect. The company has to pay the bills without seeing them. No itemization. Nothing. Everything’s hidden like it’s Russia. How these bills continue to this day, nearly two years after the case has been closed, is beyond me! That must be maddening for CEO Phil Shawe, CFO Steve Tondera and the other executives at TransPerfect.

Last year in Wilmington, I was able to meet some of the executives and employees of this privately-held, fast-growing company. The group’s energy and enthusiasm was that of a company far younger than its almost three decades in business. After everything they’ve been through at TransPerfect, with, as I see it, Bouchard and Skadden Arps, raking them over the coals, this festive bowl sponsorship and the accolades that go along with it couldn’t be happening to a more well-deserving group of people.

As I look to the coming year, it’s heartening to see good things coming for TransPerfect, despite being treated so poorly by Bouchard, Skadden, and, in my view, some of our weak-in-the-knees Delaware legislators, who should be putting politics aside and making the needed law changes. Even well-known Reverend Al Sharpton has noticed something rotten at Skadden, writing a letter last week criticizing them for lack of diversity, especially in their Wilmington office!

As always your comments are welcome and appreciated.

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.

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.


TransPerfect, Shawe Win Bid to Access Details of Skadden Bills Incurred by Custodian

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.

By Tom McParland | October 21, 2019

Andre G. Bouchard

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…


Shawe, TransPerfect Hit With Sanctions by Del. Chancellor Over Custodian Billing Dispute

Thursday’s ruling was the latest turn in Philip 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.

 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


Delaware justice overshadowed by corruption after the Transperfect case

Corruption flies over the State of Delaware after the ‘TransPerfect case’

A series of suspicious and opaque practices overshadow the integrity of its judicial institutions and have cost many criticisms and complaints

GLOBAL CHRONIC WRITING

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.

Suspicious practices

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.

Bad criticism and citizen discontent

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.

Advertising pressure

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.

Citizen action

“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.

Serious deficiencies in the Supreme Court of Delaware

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.

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.

Why this NY businessman (and his mom) are still attacking Delaware — and Biden

Karl Baker | Delaware News Journal Published 11:14 AM EDT Sep 6, 2019 Joe Biden’s latest political attacker is the mother of a scorned businessman who for years has feuded with Delaware over a court order to auction off his New York translation company. Shirley Shawe purchased television ads in Iowa and New Hampshire that claim the former vice president supports a Delaware judicial system that “cuts out thousands of people who end up hurt by the court’s decisions.” The ads are the latest in a furious public attack, brought by Shawe and her son, Phil, against Delaware and its status as a hub for business formations and corporate legal fights. The offensive first arose in 2015 after the state’s Chancery Court ordered the sale of TransPerfect, a company that calls itself the “largest provider of language and technology solutions for global business.” Chancery Court Chancellor Andre Bouchard ruled that infighting between the company’s founders — and ex-fiances — Phil Shawe and Liz Elting, had created “irreparable” harm” to TransPerfect employees and clients. The two fought over corporate decisions with expletive laden emails and outbursts intended to thwart the other’s will.  At times, it became extreme, such as when Elting poured water on Shawe’s head to end a meeting or when Shawe hid under Elting’s hotel bed and refused to leave during a business trip, according to court documents. Shawe denied the claim. The New York Police even became involved after Shawe claimed Elting kicked him with her high heel. During the Delaware proceedings, Bouchard also ruled that Phil Shawe had repeatedly lied under oath and intentionally destroyed evidence. With Bouchard’s rulings effectively taking her side, Elting largely faded from public view. The Shawes took the opposite approach. The rulings triggered a backlash from the Shawes as well as from numerous workers within the company. Arguing that a sale would tear the company apart, employees hired a high-profile New York public relations company, called Tusk Strategies, which then incorporated an advocacy company called Citizens for a Pro-Business Delaware. What happened next were well-choreographed and well-publicized protests that appeared outside of Delaware’s Supreme Court in Dover. The demonstrations were composed largely of TransPerfect employees who had traveled from New York and Georgia, according to company officials. Inside the Supreme Court was Shawe’s appeal of Bouchard’s ruling. At one point during the proceedings a shouting match erupted between celebrity attorney Alan Dershowitz and Delaware’s outspoken Supreme Court Chief Justice Leo Strine. Separately, the Shawes attempted to lobby lawmakers to change state law to prevent the courts from ordering the sale of profitable companies. Phil Shawe also filed a federal lawsuit against Delaware, claiming the state law permitting Chancery Court to sell a private company violates the U.S. Constitution. In 2017, attacks spread to Amazon’s search for a second headquarters when Citizens for Pro-Business Delaware announced that it would write a letter to the retail giant’s CEO, Jeff Bezos, urging him “to recognize the risks of considering Delaware” for the facility.
Citizens for a Pro-Business Delaware hold a press conference outside the Delaware Supreme Court in Dover, Del., before oral arguments in the case of Shawe & Elting LLC. (Jason Minto, The News Journal)
Citizens for a Pro-Business Delaware hold a press conference outside the Delaware Supreme Court in Dover, Del., before oral arguments in the case of Shawe & Elting LLC. (Jason Minto, The News Journal) Today, the backlash has bled into national politics where Biden and about 20 other Democrats are vying for their party’s presidential nomination. With ads targeting early primary voters, Shirley Shawe appears to be using Biden as a proxy for Delaware’s corporate franchise, which for decades has supported the former vice president as well as boosted state government revenues by billions of dollars. The TV commercials are being paired with full page ads in national newspapers to form a half-million-dollar attack on Biden. It is being launched just as the primary race grows more intense during the months before the Iowa caucuses, early next year. It also comes as Democratic rivals, such as Massachusetts Sen. Elizabeth Warren, chip into Biden’s lead among likely Democratic voters. A spokesman for the Biden campaign said Shawe’s ads mischaracterize statements made during a tense exchange in 2005 between the then-Delaware senator and Warren.
Democratic presidential candidate former Vice President Joe Biden speaks to local residents during a community event, Wednesday, Aug. 7, 2019, in Burlington, Iowa. (Charlie Neibergall, AP)
Piggybacking on apparent criticism of the Delaware Chancery Court, the ad features an edited video of Warren stating that employees of companies with litigation in Delaware cannot hire lawyers to represent their own interests. What the ad doesn’t show is that Warren states in the unedited version of the brief exchange that her critique is directed at the federal bankruptcy court, located in Delaware, not the Chancery Court. “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,” Biden spokesman Jamal Brown said in a statement. In her own statement, Shirley Shawe said Biden expressed support for the Chancery Court in the video, “even if that is not the court Senator Warren was speaking about.” Shirley Shawe, a Republican, also said she does not necessarily want her ads to boost Warren’s candidacy. Instead, it is “just the first in a planned effort to drive awareness.” The Warren campaign did not respond to a request to comment.
Shirley Shawe, the mother of co-TransPerfect Chief Executive Phil Shawe and a 1 percent owner of the New York translation business, meets with Rep. Michael Ramone, R-Middle Run Valley, at Legislative Hall in Dover. (Jason Minto, The News Journal)

It’s the fees!

The Biden attack ads are the latest turn in an odd, yearslong saga that began with a battle over ownership of the profitable TransPerfect. Phil Shawe ultimately won the fight in late 2017 after Elting sold her half of the company. Still, Phil Shawe’s frustration with Delaware continued. He turned his ire toward what he said were millions of dollars of fees that a court-appointed custodian had charged the company following Bouchard’s ruling. He said those bills have ranged between $70,000 to $140,000 each month. “TransPerfect is still being charged,” he said in July. “And we’ve never been allowed to see an itemized bill.” Shawe has formally challenged the legality of those fees with a lawsuit he filed in August in Nevada, the state where he now incorporates TransPerfect. The custodian — Robert Pincus, an attorney at the lawfirm Skadden, Arps, Slate, Meagher & Flom — responded to the suit by asking the Delaware court to impose a contempt order on Shawe for failure to pay the fees. Pincus declined to comment for the story. Meanwhile, a separate line of public advocacy continues to build in Delaware.
Chris Coffey, campaign manager for Citizens for a Pro-Business Delaware, addresses the media during a July press conference outside the Delaware Supreme Court in Dover before oral arguments in the case of Shawe & Elting LLC. (Jason Minto/The News Journal)
While Citizens for a Pro-Business Delaware once said its advocacy was on behalf of TransPerfect, it now calls itself a defender a good governance among judiciaries. In July, the company launched an ad blitz in Delaware demanding transparency in courts and more diversity among its judges. The ads are airing on local radio stations, on Twitter and in The News Journal. The group also held a rally in July in front of Delaware Superior Court in Wilmington where protesters held up oversized foam fingers that stated “Corrupt Chancery.” While Citizens for a Pro-Business Delaware bears a resemblance to grass-roots advocacy, the group is led by Chris Coffey, a publicist who “specializes in creating major media campaigns that dominate news coverage for days and weeks at a time,” according to Tusk Strategies website. The advocacy organization is funded by TransPerfect employees. Its incorporation documents lists its principal address along a highway in Atlanta. Still, in a column submitted to the News Journal, the group implies that its roots are in Delaware by using the pronoun “our” when referring to the Delaware Chancery Court, the Delaware state budget and the Delaware state government. Coffey said he has never represented the group as one made up largely of Delawareans. “The people who are paying us and are most active are TransPerfect employees, or former employees,”  he said. “But did we go to the state fair? Did we go knock on doors and encourage people to sign up? … Yeah.” Contact Karl Baker at [email protected] or (302) 324-2329. Follow him on Twitter @kbaker6.If Former Vice President Joe Biden Doesn’t Win, Delaware Democrats Can Point the Finger at One Person: Andre Bouchard I told you so, folks! You heard it here first. You can’t go around doing, what I clearly see, as stealing $250 million and not expect to be held accountable for it! Andre Bouchard has led his band of cronies, happily, as I see it, milking a very-profitable, not-at-all “dysfunctional” and, in fact, quite successful company for millions upon millions of dollars. Did they think no one was watching? Did they think no one would see this injustice happening over the past few years? You read it here first folks and now you’re reading about this story EVERYWHERE! CBS, Bloomberg News, U.K.’s Daily Mail (see below). This story is not only getting national headlines, it’s getting international headlines and it’s being talked about as the Democratic debates are about to heat back up and Delaware’s own Joe Biden and Democratic presidential hopeful Elizabeth Warren are both part of this international story! You can’t have $250 million being siphoned off over the past few years from a very successful company without serious ramifications. While that money may have gone from TransPerfect to many lawyers associated with Andre Bouchard, and his comrades– Bob Pincus of Skadden Arps, Kevin Shannon of Potter Anderson, and Stephen Lamb of Paul Weiss — and now that missing money is now sparking a controversy the likes of which Delaware has never seen before! Folks, as I see it, we owe all of this negative attention and unflattering notoriety to Chancellor Andre Bouchard. What’s happening is Shirley Shawe, the 79-year-old shareholder at TransPerfect and mother of CEO Philip Shawe, is fighting the “Good Ole Boy’s Club” and taking on the role of an Anti-Chancery Court, Corruption activist. By doing so, she’s holding former Vice President and current 2020 Democratic Presidential candidate Joe Biden accountable for his blind support of Bouchard’s Chancery Court. This isn’t the first time she has taken on Chancery Court Corruption. Here are two examples of Shirley Shawe turning to the airwaves to fight Delaware Chancery Court corruption: I’ve been forewarning about this, pounding the table, and demanding action from the legislature for the last few years. In my opinion, Chancellor Bouchard is undermining our State’s reputation and is detrimental to our entire state economy. I applaud fellow senior-citizen Shirley Shawe for having the courage and grit to take on the establishment cronies. As always, your feedback is welcome!  

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 place

By 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.

What is a Court of Chancery?

Chancery courts began with petitions to the Lord Chancellor of England, and developed into a parallel legal system along with common law courts. Chancery dealt with issues of equity, or what is fair, rather than matters of law, and had a looser set of rules to speed to pace of proceedings. Instead of judges, they had chancellors, and had jurisdiction over trusts and estates, guardianship over children and ‘lunatics’. They also handled lawsuits requesting something other than financial damages, such as an order requiring a party to perform a specific act. Some states in the early U.S. republic replicated this dual legal system, but the two systems were merged in England in 1875. Today, the U.S. Bankruptcy Court operates as a court of equity at the federal level, and several states maintain separate court systems for matters of law and equity. Delaware, Mississippi, New Jersey, and Tennessee still make a distinction between a ‘court of law’ and chancery court.OPINION My Readers Respond! And they Don’t Like the Stench Coming From Delaware’s Chancery Court Dear friends, As you can see from the responses below, informed Delawareans don’t want what they’re seeing, and what I believe is happening: It apparently seems that a corrupt, Chancery Court Chancellor is single-handedly dismantling our State’s reputation. I sincerely thank you for your feedback on this amazing story that continues to draw national media attention. With over $250 million of company and shareholder money unaccounted for, much of it ordered to Bouchard’s former law firm Skadden Arps, this is in my view, perhaps the largest case of court corruption in United States history. TransPerfect has not been permitted access to the bills that have been ordered by Bouchard to be paid. Want an example of how corrupt I believe Pincus and Skadden are? Nearly two years after the case has been closed, TransPerfect is still paying millions annually to Skadden Arps. I know this is hard to believe, but this is the information I am receiving from my reliable sources in the company. To receive a “litigation hold notice” — which I am told is a one-page standard letter — telling parties in law suits to preserve evidence – Skadden Arps charged TransPerfect a whopping $140,000. It is insane that Bouchard thinks he’s powerful enough and untouchable enough that he can just seem to rub corruption right in the face of the public by condoning what I see clearly as court-sanctioned theft. Below are a few of your recent responses that I have cut and pasted directly into this article. I have removed the last names to protect the individuals from possible reprisals by Bouchard, Pincus, Shannon, Strine and their powerful network of cronies: Here is how Delawareans feel about these recent events: 1) From Pete: For Bouchard to hold TransPerfect, et al in contempt only looks like a cover-up. This is corruption and it looks like these boys have a nice little act going. Skadden Arps is notorious for their iffy operation! Bouchard and Pincus are part of it! Thanks for your great work. -PETE 2) From Sarah: Thank you for your wonderful coverage of this. Bouchard must be investigated! Sarah 3) From Alfred: Judson, I believe there has to be an investigation by the Delaware Senate? Alfred 4) From Chris: This Judge Andre Bouchard has got to go! Thanks for keeping us informed! Chris 5) From Paul: Interesting commentary. I wonder if the Nevada Courts will come into conflict with the Delaware Courts and will the Chancery’s attempt at a Contempt charge be valid now that TransPerfect has moved its corporate headquarters? Regardless, the system is layered with back-covering throughout. 6) From John: Dear Jud, They apparently are all in it together. Nobody has ever addressed the Chancery Court’s operation like you have. We in Delaware always prided ourselves on a pristine state with positive economics and honest courts. These appearances of impropriety are shocking. Keep up the great work. JOHN 7) From Tom: Judson, It seems in life, if there are loopholes people always find them. If there are flaws in the law, they find a way to be corrupt. The integrity of the justice system must be upheld at all costs. This stuff is outrageous and very disturbing. Thanks for writing this. TOM 8) From Patty: Jud, Your great work is the talk of the town. This is amazing — you can’t make this stuff up. How does this guy Robert Pincus think he can get away with this? Bouchard must be so arrogant and comfortable in his position to operate the way he does. Who has the guts to do what is necessary??? Jud you are something else. LOL. All the best to you and keep it up. PATTY 9) From Dennis: VERY INTERESTING! 10) From Laurence: Hey Judson, How can this happen? It seems logical that TransPerfect’s lawyers need to start talking to the AG’s office?? 11) From Richard: Remember the old saying, you can’t beat city hall. It is such a shame that we now have to be suspicious of an institution that was once so respected. I feel sorry for Mr. Shawe to have to go through this BS. Thanks for all you do. All the best, Dick 12) From Doug: Judson, This is scary stuff when the people we have to go to receive justice, could be corrupt. I won’t incorporate in Delaware anymore. Doug 13) From Laurie: An amazing and thorough expose of something that needs to be exposed. What a story—there is a movie in this for sure. We wait for the outcome. Keep up the great work. Laurie 14) From Sally: Judson, My first time responding to you in quite a while. This is heavy stuff. It seems that Bouchard is attempting to use every angle to maintain control and cover his tracks. The only way change will be made in the judicial system is for Delaware to make political change. You have done an excellent job bringing this to light. Keep up the good work. I ask you, folks, who are seeing what’s happening here, could Andre Bouchard actually be attempting a cover-up? Will the Nevada courts rule in favor of TransPerfect? Can Chancellor Andre Bouchard actually and legally withhold evidence on the un-itemized and unexplained invoices in the amounts of millions of dollars submitted by the law firm of Skadden Arps? The appearances of impropriety are mounting and you the citizens of Delaware are demanding action! I appreciate your interesting feedback; please keep your responses coming! We are making a difference! Respectfully Yours, JUDSON Bennett-Coastal Network

OPINION

Dear Friends,

Folks, more developments are happening with the Skadden Arp’s law firm and Chancery Court Chancellor Andre Bouchard, who in my view, are working collaboratively to continuously bilk TransPerfect, nearly two years after the case!

What happens when you demand to see Skadden Arps’ bills after being Court-Ordered to pay the Chancellor’s friends millions blindly? Well, if you demand it in a fair forum like Nevada, what happens? Suddenly Skadden Arps — seemingly to hide their bills and deflect from allegations of massive over-billing — runs to their “never-lose-a-motion” buddy Bouchard, in what I see as a home-court advantage, that in my book violates every principle on which United States Justice is based.

Skadden Arps, Bob Pincus, and Andre Bouchard appear to be desperately trying to deflect attention from what I’ve seen as the real issue all along: Skadden Arps, show your bills!!! To the public, to the payor TransPerfect, to someone, anyone?

If you did the work you say you did, why engage in a deception and deflection, “Contempt” motion? Just show your ordered and itemized bills. It’s obvious to this journalist and my confirmed opinion, that your buddy Bouchard gave you a blank check and you possibly misused it!

In my opinion, TransPerfect should not have to defend a “Contempt” motion, being made so Skadden and Bouchard can divert attention from the real issue: Ordering TransPerfect to pay Skadden Arps millions after the Custodian retired, with apparently no explanation whatsoever.

Folks, it is my belief that Bouchard’s Chancery Court reeks of rampant appearances of impropriety with disconcerting suspicions of collusion and corruption.

Something must be done and I see from the onslaught of feedback you’ve been generously sending, it’s resonating with you as well. I’ll share the excellent feedback with you soon. Keep it coming! Together we can do something important here and bring about change in Delaware’s Court of Chancery.

Please stay tuned because yours truly will keep investigating and sharing with you frequently.

Respectfully yours,

JUDSON Bennett-Coastal Network

OPINION Dear Friends, My sources have told me that after taking only 15 minutes to examine the motion, Bouchard has now granted a new motion clearly encouraging the Infamous Skadden Arps law firm, who I believe is acting in coordination and on behalf of the Chancery Court, to further retaliate against TransPerfect (now a Nevada Corp), Philip Shawe, and Shirley Shawe (79-year-old senior citizen). How? Through a “Contempt of Court” motion? Outrageous and Absurd! Why? Because after still being looted by Pincus and Skadden Arps more than 1-year after the case, TransPerfect was forced to seek the protection of the Nevada Courts. Can you blame TransPerfect for wanting to litigate in a fair forum?! For years Bouchard has made his buddies rich and now that TransPerfect is in Nevada, he needs a way to keep TransPerfect under his control and to keep the gravy train going. This comes after the world’s longest series of arbitrary and capacious rulings, all coincidentally against TransPerfect and the Shawes and ALL FOR THE BENEFIT of his former law partners (Pincus, Lamb) and his best friend for 20 years, Kevin Shannon. $250 million was spent with lawyers and Bouchard’s friends, and sealed documents prevent the public from knowing why? Want more proof that they are in cahoots? My understanding from folks I’ve talked to about this is that Pincus is contractually bound NOT to say bad things publicly about TransPerfect and Shawe — that’s one of the things Shawe paid for with his $385 million in Bouchard’s rigged auction — but now Bouchard has granted an extra-long motion for Pincus to basically do an end-run around his contractual guarantees not to talk negatively about TransPerfect or Philip Shawe. Mark my words, Bouchard granted this unusually large extension motion, purposefully so he could aid and abet Pincus’ continued, and in my view, illegal, disparaging, defaming and looting of TransPerfect. In my opinion folks, Delaware’s Skadden office and their thinly-veiled coordination with Bouchard are a form of incestuous, organized crime. How else does it look, I ask? Watch for what I think will happen based on conversations with a few of my attorney friends: Former appointed Custodian Robert Pincus writes a nasty motion with false claims and then illegally leaks it to the press — so that the Chancery Court can further retaliate against TransPerfect, Phil Shawe, and Shirley Shawe. OUTRAGEOUS FOLKS ! This is exclusive coverage brought to you by the Coastal Network! I have worked hard to cultivate sources inside the organization, who spoke with me under the strict condition of anonymity — out of fear of reprisal from Bouchard. Sound American? Not to this journalist! Stay tuned! Your comments are welcome and appreciated. Yours truly, JUDSON Bennett-Coastal Network

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:

http://www.delawaretoday.com/Delaware-Today/November-2015/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:

HTTPS://WWW.PAULWEISS.COM/PRACTICES/LITIGATION/LITIGATION/NEWS/DELAWARE-SUPREME-COURT-AFFIRMS-71-MILLION-SANCTIONS-AWARD-IN-FAVOR-OF-ELIZABETH-ELTING?ID=23702


FEBRUARY 13, 2017

Delaware Supreme Court Affirms $7.1 Million Sanctions Award in Favor of Elizabeth Elting

“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.”

OPINION
Dear Friends,
Here are some predictions from Citizens for Pro-Business Delaware “OVER THREE YEARS AGO” in Reuters. This was back when Delaware’s business rating was still number #1. We are now not even in the Top 10 any more?!?
If legislators had stepped in to limit the Chancellor’s power and addressed what I, and thousands of others, view as corruption in the Chancery Court, perhaps Delaware wouldn’t be #11. We can’t change the past, but we can sure as hell change the future.
Former Delaware, Chief Supreme Court Justice, Leo Strine has stepped down. The Puerto Rican Governor is stepping down. Perhaps it’s time for Andre Bouchard to step down and let the Chancery Court modernize, move forward, and return to its former glory?!
As always your comments are welcome and appreciated.
Sincerely yours,
JUDSON Bennett-Coastal Network
https://www.reuters.com/article/delaware-court-media-idUSL1N18Y28P
JUNE 6, 2016 / 6:51 PM / 3 YEARS AGO (Reuters)

Unusual Media Blitz Rips Top Judge of Delaware’s Corporate Court

Tom Hals
(Reuters) – A bitter boardroom battle has prompted an unusual media blitz in Delaware that warns residents that the state’s nationally renowned corporate court is on the cusp of destroying Delaware’s pro-business reputation.
The ads by employees of TransPerfect Global Inc stem from a ruling in August that was aimed at breaking years of deadlock between the translation services company’s co-owners, Elizabeth Elting and Philip Shawe.
Elting convinced the Court of Chancery to order the company sold, a move opposed by Shawe. Last month, employees of New York-based TransPerfect wrote to the judge, Chancellor Andre Bouchard, saying they feared for the survival of TransPerfect, which despite years of dysfunction, had grown to have $500 million in annual sales and 4,000 staff.
As Bouchard prepares to issue a final order any day detailing the sale process, radio and print ads, a website and 20,000 flyers have been sent to Delaware residents blasting the judge for his “stunning act of governmental overreach.”
“Tell Chancellor Bouchard to leave our company alone and our business is our business,” said the flyers, which included the direct phone number for Bouchard’s chambers. “Chancellor Bouchard is turning Delaware into a bad place for business.”
The state prides itself for being friendly for business, and the U.S. Chamber of Commerce has named the Court of Chancery as the nation’s best for more than a dozen years.
I had the unique experience of covering an unusual day for Delaware and the Coastal Network, on Wednesday, July 10, in Wilmington, Delaware. It involved a rousing and heavily attended press conference, a fascinating hearing in the Court of Chancery with Andre Bouchard presiding, and a fabulous party and TransPerfect summer celebration at the Hotel DuPont later that night. The activities began about 12:30 PM with a Press Conference — in 90 degree heat that felt like 105 degrees with unbelievable humidity — in front of the Delaware Court of Chancery which was organized by the “Citizens for Pro Business Delaware.” This group, led by articulate activist Chris Coffey, has 2,700 members, made up of TransPerfect employees who were negatively impacted by Bouchard’s decisions along with other concerned Delaware citizens. The group now appears to be dedicated to making changes to modernize the controversial rules governing Delaware’s Chancery Court. Having covered the TransPerfect case for years, and Andre Bouchard for even longer, I was pleased to take the opportunity to observe all these players face off live and in person. During the press conference on the front lawn of the Chancery Court, yours truly, like a dummy, chose to wear a dark suit — and the Delaware establishment almost had their wish for my complete demise, as I was about to pass out from the heat. Weather and wardrobe aside, I was extremely impressed with Coffey’s platform and passion. It is unquestionable that this group shares my desire for increased transparency in the Court of Chancery, as they are proposing much needed common sense reforms. In my opinion, the legislature cannot act quickly enough to decrease perceived (or actual) corruption surrounding the Court’s activities. The obscene and disgraceful court-ordered looting of TransPerfect continues!!! Skadden Arps gets paid more in a month for secretive and undisclosed “legal services” than normal people make in a year. It appears to me that Skadden and the judges are truly modern day Pharaohs, living extravagantly off the sweat of the thousands of innocents. I believe without a doubt that these (potentially, colluding, former law partners, “Bouchard and Strine”, both Skadden alumni) are truly a biblical plague on Delaware’s reputation. During Bouchard’s tenure, our once-great state has dropped to a dismal 48th out of our 50 U.S. states in overall business confidence, and after 15 years as the undisputed #1 in business litigation, we fell to #11. I challenged Coffey with the following direct question, “Sir, do you think the fact that Chancellor Bouchard engaged in “boondoggle”, travel excursions with one-side’s attorney during the decision-making phase of the TransPerfect case actually created a conflict of interest and an appearance of an impropriety?” Coffey’s answer was firm and unequivocal, “Absolutely-YES!” Folks, for those of you that couldn’t hear Chris Coffey’s speech live, I am telling you his answer and his entire speech sounded statesman-like and remarkably credible. I believe this group represents the best chance Delaware has for reform, positive change, and a fresh start — but, they must defeat a well- off Bouchard and his establishment, “good old boys” club to get it done. Make no mistake, there will be a significant battle for Delaware’s; future playing out in the 2020 election! Buckle up!!! I then observed the Chancery Court argument. Former TransPerfect co-CEO Elizabeth Elting’s attorneys (after Bouchard handed them a $400 million check) are arguing for another $200,000. With each side lawyered up, according to the TransPerfect employees I interviewed at the Court House, this hearing will cost over $500,000 for each litigant. What judge allows $1 million to be spent to argue over $200,000??? So again, I expect payola is responsible for why this Chancellor would even have this hearing at all. In my view, it might be because his lawyer buddies could bank yet another payday on the backs of the dedicated, TransPerfect employees. It’s shameful and disgraceful!!! In a packed courtroom, with many TransPerfect employees who believe they are all victims of Bouchard’s corruption staring at the Chancellor, I had two observations worth mentioning that won’t be found in any other transcript: 1) Bouchard appeared judicial and didn’t even resort to his biased name-calling. 2) His best pal Kevin Shannon of Potter Anderson said ABSOLUTELY NOTHING and left via a secret exit to avoid my questioning. If someone hadn’t seen Bouchard in action before this hearing, they may have mistaken him for actually being an ethical judge on this specific day. I guess when there are a courtroom full of antagonistic folks staring you down, it must engender self-reflection. Like the many TransPerfect employees, I will wait for the ruling — but having seen Bouchard’s judicial antics for years, I’m not sure this subjective Judge will ever rule against his best buddy, Kevin Shannon, no matter what facts are presented. Then the fun began with a huge TransPerfect party with a fancy sit-down dinner at the Hotel DuPont. At least 300 people packed the place to celebrate that TransPerfect had survived Bouchard’s “DISSOLUTION” order, and despite these trials and tribulations, is still doing quite well as a company. (Never did their revenue slow, not even during the case.) Besides TransPerfect employees, participants included concerned Delaware citizens, a great band, the winning legal team ( including Alan Dershowitz), Villanova basketball star Kris Jenkins, Super Bowl Champion Philadelphia Eagles tight end Brent Celek, Cindy Green – Registrar of Wills office in Sussex County, Delaware Senator Colin Bonini, Sam Waltz of The Delaware Business Times, and to top it all off, a great show by Saturday Night Live star Colin Jost. TransPerfect CEO Philip Shawe gave a gracious speech, praising all of his employees for their dedication and loyalty. Without a doubt, this man has earned the love and respect of an army of people over his 27 years in business. No one should spend their whole life building a company, and have court corruption seize it and try to auction it off to a competitor. These employees were great, happy, and thankful to still have jobs. During the evening, it really hit home to me how much Bouchard’s obvious lies and defamatory name-calling must have hurt these families over the Chancery’s 5-year occupation of TransPerfect. Bouchard called these hard-working normal folks “Dysfunctional” — In my view, this grotesque misrepresentation, was made so he could take over the company and enrich his friends. Its just unacceptable!!! Make no mistake folks, what happened to TransPerfect in Delaware wouldn’t even happen in Russia — it’s disgusting. Regardless, I saw a company on Wednesday night that had overcome perceived corruption, while keeping the American Dream alive for themselves, and hopefully for entrepreneurs all over the world. Delaware’s business future however, will be in the hands of our Elected Officials. Lastly and on a personal note, it was gratifying for me, as I was actively acknowledged by the employees — many who felt they were silenced and oppressed by Chancellor Bouchard and Skadden Arps Custodian Bob Pincus. They felt that I have helped give them a voice through my reporting. I told them I am honored to shine a light on injustice and corruption, and that I will continue to do so for my readers. As always your comments are welcome and appreciated. Yours truly, JUDSON Bennett-Coastal Network

Breaking news on TransPerfect Global: Just 1-year after the company was “dissolved” and auctioned off by Chancery Court Chancellor Andre Bouchard in what I see as the most radical and corrupt decision in American business law history, TransPerfect is now the darling of Wall Street.

How is it possible that a company deemed the most “dysfunctional” in the world, requiring a 3-year government occupation ordered by our own Andre Bouchard’s Chancery Court, $250 million spent (much of which remains still undisclosed, Mr. Bouchard), and then dissolved and auctioned off — is now so successful that the world’s leading banks are happily lending money to it?

It’s clear to me that the whole thing was a LIE. Read the Slator story below about Bank of America, JPMorgan and Citigroup lending TransPerfect hundreds of millions and reflect back on how the Chancery Court treated this company and draw your own conclusions.

As always, your comments are welcome and appreciated. Especially upon reading this news.


TransPerfect Refinances USD 445m Loan Used in 2017 Buyout, Gears Up for M&A

By Florian Faes (20 June 2019)

TransPerfect is cutting its interest expense. The world’s largest language service provider by revenue is refinancing a USD 445m credit facility used to buy out the company’s co-founder Liz Elting after a years-long legal battle ended in late 2017.

In a process that saw him compete against H.I.G. Capital, private equity owner of arch rival Lionbridge, TransPerfect CEO Phil Shawe eventually succeeded in gaining sole control of the company he co-founded.

According to a press statement, the new USD 450m credit facility (consisting of a USD 400m term loan and a USD 50m revolving credit line) will replace and terminate the previous USD 445m credit facility.The relatively quick refinancing of a higher-interest loan can be seen as a vote of confidence in a business that generated USD 705m in revenue and USD 92.3m in EBITDA in 2018. The new loan will shave off around USD 15m from TransPerfect’s annual interest expense and was provided by a syndicate arranged by Bank of America, JP Morgan, and Citibank with Bank of America acting as the sole administrative agent.

Asked how he is planning to reinvest the funds freed up by the refinancing, Shawe told Slator that “one of the reasons I was able to put together a compelling bid for the company, was because I was not interested in pulling money off the table, so to speak. This USD 15m in savings per year will be used to finance growth through any or all of the following: M&A, Technology R&D, Talent Acquisition, Geographic Expansion, and General Corporate Purposes.”

“We have sufficient ‘dry powder’ to complete a major acquisition”—Phil Shawe, CEO, TransPerfect. 

To maintain its current growth trajectory TransPerfect will have to diversify into new verticals and offerings. Shawe confirmed that while he sees continued growth in the company’s traditional business lines, he expects areas such as “Media, Gaming, AI training and several other areas of focus for us in 2019/2020” to outperform.

So far TransPerfect has largely stayed on the sidelines while competitors have been busy doing deals over the past two years. But this may be about to change. “One of the advantages of this current financing is the opportunity it has given TransPerfect to forge deeper relationships with several of the world’s leading banks,” Shawe said. “Given our current leverage position, we feel very comfortable that we have sufficient ‘dry powder’ to complete a major acquisition should the right opportunity arise. Fortunately, because of the investments we’ve made over the years, such in our sales force and in our technology products, we are not dependent on M&A to drive growth.”

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.


TransPerfect Hits Rival Lionbridge With $300M Secrets Suit

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.

“Delaware’s Chancery Once Again Makes a Bizarre Decision that Will Hurt Business” — That’s an actual headline in the Israeli newspaper one week ago. Read the article below.   How long is Delaware going to allow the detrimental pattern of behavior by Chancellor Andre Bouchard to continue? In my view, the man’s appearance of corruption has tarnished our once great Chancery Court, and thus, our state’s once great reputation for being a fair and equitable home to businesses. The man is an international embarrassment, and no one would be telling Delawareans what these foreign journalists are writing about Chancellor Bouchard, if it were not for me.   I believe the man is a menace ! When will Delawareans have had enough of Bouchard’s antics and demand change from our elected officials?   How can this be good for Delaware? We must investigate Bouchard and his cronies and have them account for every cent of where TransPerfect’s $250 million went. Employees at the company are in the dark as to where all the money went?   All they know is that the Chancellor somehow drives a Rolls Royce Bentley, while they go another year sacrificing raise money and benefits.   We need to unseal the bills that Bouchard is illegally ordering to stay sealed to protect his former firm Skadden Arps — the Chancellor’s state-sponsored TransPerfect cover-up continues, and our state’s once-coveted image and national ranking plummets into the abyss.   To my Democratic readers excited about the prospect of Joe Biden running, you can bet your bottom dollar that if Delaware continues to turn a blind eye to Bouchard’s corruption in the TransPerfect case, it will blow up in Democrat faces during the election. Encourage your elected leaders to investigate and follow the money trail, and as always, please share your thoughts.  
   

The Times of Israel:

Delaware’s Chancery Once Again Makes a Bizarre Decision that Will Hurt Business

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.

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 details of the ‘Transperfect case’ are still hidden by order of the judge

Contrary to what US law dictates, Judge Bouchard has decided to prevent the public from accessing the records of the conflict that put 5,000 workers at risk, 500 of them in BCN

Delaware TransPerfect

The American justice dictates a resolution on the company Transperfect / FOTOMONTAJE CG

By IRENE BENAVENT

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 .

Opacity and obscurantism

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.

Out of the law

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.

Delaware, exposed

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.

Sustained growth

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.

Increase in employees

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 Wilmington History Society Hosts “A Deep Dive into the TransPerfect Case” and Welcomes TransPerfect CEO as a Surprise Guest Speaker

  On Wednesday, October 17th, The Wilmington History Society convened for an evening discussion with the purpose of taking “A Deep Dive into the TransPerfect Case.” The event would begin with Jacob Jeifa of the University of Delaware, giving society members an overview of the case. Following Mr. Jeifa’s presentation, the floor was open for questions, and an unlikely guest, Philip Shawe, CEO of TransPerfect Global, made an appearance to help aid the discussion.   At least one news outlet reported this was Mr. Shawe’s first foray south into Delaware since he wrested control of his successful company back from the Delaware Chancery Court. The court, in my view, has spent the last few years fleecing the pants off this successful company by forcing Shawe, with court orders, to pay $1,475 an hour for years to the Chancellor’s friend, Bob Pincus of Skadden Arps, not to mention an army of Pincus’ friends. From what I can see, given the amount of money Bouchard passed to engineer a $250 million wealth-transfer out of the company coffers (which ultimately came from the employees) and into the pockets of Bob Pincus, and other lawyers and Delaware elites, it is fair to say that Shawe could have been entering enemy territory going to this meeting in Wilmington. Many believe Shawe and TransPerfect to be the biggest victim of government corruption in modern history, courtesy of Chancellor Andre Bouchard.   I had the opportunity to interview Nathan Field, President of the Wilmington History Society, about how the evening’s events unfolded. While one might have expected a showdown at the OK Corral, I’m told it was a pleasant and informative evening with good questions and a lively debate.   “To hear so directly from a primary source, who was willing to answer any questions directly, was unusually informative,” Field said of Shawe being at the meeting. “It’s not often you get people like that in a bar, willing to answer any question you ask, so that part of the discussion was highly informative as well.”   I wish I could have been there — this man and his company are arguably the greatest victims of judicial corruption in our lifetime — and yet he’s willing to come down to help Delaware understand the case and it’s far reaching implications. I placed a call to Mr. Shawe’s New York offices, but did not hear back before press time.   Still, I commend both Shawe and the Wilmington History Society for their interest in fostering discussion aimed at educating the Delaware public on the case. In my view, the people of Delaware will be paying for the Bouchard-TransPerfect corruption in lost state income, lost jobs, and lower wages for long long time. Our incorporation rankings have definitely taken a beating like never before, and this is our state’s main source of income.   The study of history is largely premised in the notion that by society examining the mistakes of the past, it can avoid them for the future. I can only hope that history will not repeat itself. Shawe had to move his company out of Delaware to escape corruption– with Bouchard’s tentacles no longer siphoning TransPerfect’s bank accounts, it seems Shawe has little to gain by traveling to Delaware and sharing his view and his experiences, so I commend him for doing so.   I’m told a good deal of discussion centered around Justice Karin Valihura’s courageous Dissenting Opinion, in which at great personal peril, she took on Chief Justice Strine and Chancellor’s Bouchard’s ” Good Old Boy Network” — Declaring that Chancellor Bouchard as a neophyte judge had gone “Too far, too fast.” If anyone in Delaware would like to understand the Constitutional Issues at stake with Bouchard stealing Shawe’s stock and putting it up for auction, I encourage you to read Justice Valihura’s decision. It makes it fairly clear that Bouchard putting Shawe’s stock up for sale to benefit his former partner (and not-so-coincidentally, Bouchard’s bosom-buddy Kevin Shannon) was not only unconstitutional, but illegal under Delaware law.   What is the one huge mistake history will judge Delaware by? When faced with obvious abuse of power, abuse of process, and corruption, our legislature did very little. We can take solace in this from Election Day results: The righteous Senators Bonini and Richardson — who tried to stand up against the rich elites, the lawyers, and the “Judges Gone Wild” — got re-elected. Conversely, sell-outs like Greg Lavelle who ran Bouchard’s ZERO-QUESTION confirmation hearings, and stood by his side as if he was paid to do so — was handed walking papers in the form of an election defeat.   Please read the article below. While the title seems sensationalized based on the positive reports I’ve heard about the Wilmington History Society meeting, the article is solid. The establishment has some funny comments, basically: Yes, our Chancellors are unpredictable, but others are more unpredictable; and the Corporate Bar has lined up behind the Chancellor — shocker — given those folks have to go in front of him to argue for 9 more years (less, if there is any justice in this world!).   Finally, while the election didn’t go the way I’d envisioned for Republicans in Delaware, what’s most important is seeing Democracy thriving. No matter which party you side with, a sincere thank you to everyone who got out the vote on Tuesday!    Please click on the link below and read the article which is right on point.    

In Parting Shot, Shawe Hits Actions of Del. Courts as Reason for TransPerfect’s Nev. Move

By Tom McParland | October 23, 2018 at 05:45 PM

Explaining his decision to reincorporate his business in Nevada, TransPerfect co-founder and CEO Philip R. Shawe returned to Delaware last week to deliver a parting shot to the state’s legal establishment, saying the Delaware Court of Chancery was too quick to order the profitable translation software company to the auction block.

Despite ultimately prevailing in what came to be known as one of the most vexing and contentious cases in the recent history of the Chancery Court, Shawe said last week that the 2015 decision to force the sale of the deadlocked, but profitable, translation software company could have wide-ranging ramifications for Delaware, which sells itself to the corporate and startup communities as a stable, predictable court system.

“If that’s the standard, you could dissolve any company in America,”

Shawe said at an Oct. 17 event hosted by the Wilmington History Society.

The critique has gained some traction, including with one state Supreme Court justice, who said Chancellor Andre Bouchard had gone “too far too fast” in appointing a custodian to oversee a public auction. However, the bulk of the state’s corporate bar has lined up behind the chancellor, arguing that he followed the proper blueprint for resolving corporate deadlock under Delaware law.

The dispute centers on a rarely used provision of Delaware law, which grants the Chancery Court authority to breakup firms when their directors have reached a point of permanent impasse. Under the statute, codified in Section 226 of the Delaware General Corporation Law, a custodian is required to continue the business of a corporation, “except when the court shall otherwise order.”

Shawe, who initially opposed TransPerfect co-founder Elizabeth Elting’s petition to dissolve the company, argued that Bouchard opted to impose an “unpredictable application of Delaware law,” when other, less-intrusive steps could have been taken to resolve TransPerfect’s corporate deadlock.

Earlier this year, Shawe won his bid to purchase Elting’s 50 percent stake for $385 million, finally putting to rest a four-year legal saga between the former business partners and one-time finances over control of the company that they had started together out of a college dorm room. An outspoken critic of the Delaware judiciary, Shawe in late summer changed TransPerfect’s state of incorporation to Nevada, in part so that he would never have to litigate its internal corporate disputes in Delaware again.

“I think there’s a lot Delaware can learn from this case, if it wants to be a hospitable home for entrepreneurs,” he said in an interview.

Shawe said in an interview that Bouchard’s sale order had stretched the company’s resources and shaken the confidence of his senior management team. Instead, Shawe argued, Bouchard should have allowed the custodian to expand the company’s board in order to reach an internal resolution.

Last February, Delaware Supreme Court Justice Karen L. Valihura had recommended the appointment of a custodian in her lone dissent to a 4-1 opinion of the high court upholding the sale. In her opinion, Valihura said that Section 226 had never before been used to sell stock over a shareholder’s objection.

“The absence of authority grounded in the statute, the conceded absence of any similar cases under Section 226, and our common law’s strong preference for the least intrusive remedies in cases involving court-appointed custodians suggest that the chancellor went too far too fast in ordering the modified auction,” she wrote.

Shawe has since seized on Valihura’s dissent to argue that Bouchard’s decision had upset the stability that Delaware corporate law is known for.

But Francis G.X. Pileggi, vice chair of Eckert Seamans Cherin & Mellott’s commercial litigation practice, said Section 226 had functioned as it should in a case of corporate deadlock. Pileggi acknowledged that Valihura’s dissent had a “substantial amount of merit,” but he said that Section 226 cases are, by their nature, “almost inherently unpredictable.”

“Whenever there’s discretion involved, one vice chancellor may reach a different conclusion than another vice chancellor,” he said. “The predictability is that 226 is available to break the deadlock. The unpredictability is how the court decides to break the deadlock.”

Section 226, Pileggi said, only applies to a small group of tightly held companies that incorporate in Delaware, and its application in one case would not have much affect on the broader business community.

It is hard to predict the outcome of any lawsuit, he said, but Delaware has a history of applying the statute on a case-by-case basis and would be better equipped to handle the cases than its counterparts.

“If you don’t know how the Delaware court is going to rule,” he said, “it’s even more difficult to predict how another court is going to rule outside of Delaware.”

It pains me to say this: But having covered the TransPerfect Global case closer than anyone for the last couple of years and talking to many employees who had their lives turned upside down by the Delaware Courts, I am happy to see the American success story known as TransPerfect finally being able to escape the tentacles of our Chancery Court and Chief Chancellor Bouchard. Thankfully, it wasn’t sold to a private equity shop, which may have laid off thousands of workers with the intention of trimming the company and flipping it a few years later. Ultimately, the employees won, and jobs were not lost.   But at what price? Did the Court of Chancery really do equity here by causing the litigants to incur $250 million in fees to resolve ownership of a company that does $600+ million in revenue? It would take years for the company to recoup those costs! It’s obscene, it’s outrageous and in my opinion — nothing less than a money grab by the Delaware Bar and what amounts to State sanctioned theft.   Why would corporations want to incorporate here when they start to realize that their biggest business losses can occur when they try and get something done in Delaware. Let’s be clear folks: The greed of the Delaware judiciary and its lawyers have made Delaware a “business unfriendly” state. The only people who won here were lawyers, Delaware elites, and those hired by them. The legislature should form a special committee to investigate the whole TransPerfect case so that the Delaware attorneys and Chancellor Bouchard can explain their actions and open their books to the public (which they have shockingly refused to do to date ). In order to survive, Delaware needs transparency, now!   When litigants come to Delaware and see Chancellor Bouchard pulling up in his Bentley, they will probably be thinking about the TransPerfect case.    Reading the piece below about TransPerfect moving its corporate headquarters from Delaware to Nevada, I thought, bravo TransPerfect! Very smart for those guys to get out of the state where we have no checks and balances on the judiciary’s power. I mean, the Chief Justice of Supreme Court was Bouchard’s summer intern! I am erxtremely sad for Delaware, but overjoyed for TransPerfect.    TransPerfect employees and shareholders weren’t the only losers here. What Delaware lost and is losing in our reputation and our image is priceless. Frankly, in my view, it is lost at the hands of a greedy bunch of powerful cronies who have the ability to bleed companies and their shareholders dry. Judges who legislate from the bench and have relationships with attorneys, creates the appearance of an impropriety and all the while, it seems our elected officials just stand by and do nothing. If you followed the recent Facebook case in Delaware, the fees requested in that case were $129 million! We have reached a seminal moment for the Delaware judiciary and for the people of this great State! Can the corruption run any deeper?    Under the leadership of Chief Chancellor Bouchard, our state fell from #1 to #11 after 15 years of dominating the corporate confidence survey and I’m worried that the Delaware Bar Association and Delaware’s Supreme Court will continue to turn a blind eye as more and more corporations question the reliability and impartiality of the Delaware Chancery.   The story below says that TransPerfect Global and 7 of its operating subsidiaries have moved to Nevada. The move has been called “Dexit”, as in Delaware-exit.   Some of TransPerfect’s employees in my 6,000+ readership-base think I’ve been their only voice, yet now I ask them to be my voice: To the employees and to TransPerfect CEO Phil Shawe, I say this:   I understand why you’re leaving — if someone took a quarter-billion from me, I’d leave too — but stay! Please don’t turn tail and run now that you’ve won. Delaware is a good state with good people. You are the only business people who are bold and dogged enough to challenge the cronyism that is rampant in Delaware, and to possibly get legislation passed that will reform a judiciary gone amok. With you leaving, what about the rest of us? You have the means and the motivation to make a real difference here — to save Delaware from itself. How will you feel when the next $100 million in legal fees is awarded? Beyond Delaware, think about how many future management teams and shareholders you can save from the heinous, legal crap that befell you at a cost of millions of dollars.   Speaking for Delawareans as a whole, we don’t want more private jets for plaintiffs attorneys and Bentleys for judges. We want change and we want our reputation back. Consider coming back to Delaware and being part of the solution? Now that you have nothing to gain or lose, perhaps our legislators will listen. Please read the article below.  

Industry News

TransPerfect Moves Corporate Headquarters to Nevada

by Andrew Smart on August 13, 2018

TransPerfect wasted no time in moving its corporate domicile from Delaware to Nevada once the deadline for Co-founder Liz Elting to file an appeal with the U.S. Supreme Court passed on August 1, 2018, without incident.

The move puts closure and distance between the world’s largest language service provider (LSP) and the Delaware Court of Chancery, which had appointed Custodian Robert Pincus to auction the company.

TransPerfect Co-founder Phil Shawe eventually won the competitive auction process and completed the buyout in May 2018, enabling the company to restart acquisitions and relocate to Nevada.

Expensive Litigation

For four years beginning 2014, the legal battles for control of TransPerfect were amongst the most acrimonious seen in American corporate history. While Shawe declined to comment on the legal and custodian costs for this story, Crain’s reported that USD 250m in legal fees were spent by all parties on at least 20 lawsuits involving 30 law firms.

The Court of Chancery in Delaware, where TransPerfect was domiciled, would take center stage in these battles. In June 2016, it ruled that the company would be sold in an auction in which Shawe would be forced to participate while he contested its legality at the same time.

The auction began with 97 potential participants, ran four bidding rounds and ended with Shawe securing the bid for USD 770m in a neck-and-neck finish with H.I.G. Capital, the private equity owner of Lionbridge.

In an email statement to Slator in May 2018, Shawe said “Personally, I feel both pleased and vindicated to have won the auction and to now be in a position to ensure that TransPerfect’s successful business model will be maintained into the foreseeable future.”

Debt Financing

Shawe purchased all of Elting’s shares for USD 385m in cash, yielding her about USD 287m in after-tax net proceeds. “TransPerfect and I used Owl Rock’s debt financing to buy out my former partner,” Shawe confirmed to Slator for this story. He declined to provide the type and amount of debt raised.

Shawe added that “Property rights advocates should perhaps be happy to know that TransPerfect’s third shareholder, Shirley Shawe, was, in the end, able to keep her (1%) stake in the company – private property which she feared could have been taken by the government, against her will, and sold to a third-party – a litigation outcome unprecedented in U.S. history for a private, profitable firm.”

With the purchase approved by the Delaware Supreme Court and completed in May 2018, Liz Elting had until August 1, 2018 to file an appeal with the United States Supreme Court. The deadline passed and TransPerfect wasted no time moving its corporate domicile to Nevada.

TransPerfect’s Dexit

Shawe confirmed to Slator that “as of August 6th, our parent company, TransPerfect Global, Inc. and all seven of its operating subsidiaries which were domiciled in Delaware, have moved to Nevada.” The move has been called “Dexit” by insiders.

“For years, most companies – including ours – considered Delaware the default option for incorporation” Shawe told Slator. “But times and circumstances have changed and other states, Nevada chiefly among them, now represent a compelling alternative.”

He added that “Nevada has a reputation for low taxes, privacy, lower litigation costs, a rational and predictable judiciary, as well as for protecting officers, directors, managers, employees and stockholders. It is an extremely business friendly locale.”

A Return to M&A

TransPerfect has emerged as a formidable player in the language industry, with revenues up 12% to USD 615m in 2017. Even more remarkably, the company managed to organically grow revenue by nearly 20% to USD 337m in the first half of 2018.

The growth, according to Shawe, is broad based across “every industry vertical we service. We’re also seeing significant growth in both our services and technology revenue streams. Geographically, it’s the same story, the Americas, Europe, and Asia are all up compared to last year.”

“If we had an extremely compelling use of funds, we’d raise the capital necessary, either in the private or public markets”

When asked if M&A would also be part of its growth strategy going forward, Shawe replied “Yes. We are looking for M&A candidates in the services space (…). In the technology space, we are looking for strategic software purchases that would fit well in our existing technology stack.”

Less certain is whether TransPerfect will go public and use its shares as a source of capital in acquisitions as RWS, Keywords Studios and SDL have done.

“We’re more apt to view ‘going public’ as we would any other means of raising capital” said Shawe. “If we had an extremely compelling use of funds, we’d raise the capital necessary, either in the private or public markets.”

I would first like to thank my loyal readers for their continued and supportive feedback on my investigative journalism with respect to the TransPerfect case. It is a good feeling for this writer, having shed light on the many issues surrounding this amazing case over the past few years. I am very hopeful that the conversation will be steered toward future reforms that will prevent another successful company from ever having to go through the three-year government takeover that TransPerfect did.   Simply the thought that I and my readership may have played a small role in protecting and restoring Delaware’s business reputation, which is the main-driver of our beloved state’s economy, is very satisfying. When it has to do with the government (and courts are part of the government), the public has a right to know, and is one of the main reasons I began reporting on controversial and political issues as far back as 1998, and my subscriber base is now over 6,000 strong.   I’ll share some of your much-appreciated feedback in a future column. First though, justice prevailed in this case, for the employees — if indeed no one else. When I look back over the history of our country, I think back to when the US was originally created, when kings, or lords, could take property from one and grant it to another. The fight against that unbridled power is at the core of the Declaration of Independence. Our founders knew property rights were essential to freedom and prosperity.   Not to sound too preachy folks, but that is what was at stake in the TransPerfect case. Americans didn’t like that lords could take something from one and give it to another. It’s why we fought the British in the American Revolutionary War and became an independent country. Americans don’t want “equity court judges” to wield that same power that the British once did over us.   Delaware Court of Chancery Chancellor Andre Bouchard, orchestrated sanctions and merits, the likes of which have never been seen in American jurisprudence. So many unanswered questions here? Who benefitted? Few people understand what was really at stake in the Chancery decision to force a public sale of the company’s privately-owned shares — and now, unfortunately, this case has been cited as law along with 3 other cases nationwide involving corporation dissolution.   Shawe prevailed as he won the bid to buy the whole company; yet he had to pay a large premium, massive legal fees, and court-ordered billings to the Custodian. Former co-CEO Elizabeth Elting also fell victim to her corrupt lawyers. Sources at the company say that the settlement price of Shawe’s offer to Elting in 2013, when you factor in a percentage of gross sales over the next 5 years, would have put her price where she is now. So she lost $150 million to attorney fees, as did Shawe. Over $300 million wasted by Delaware elites that could have been used to expand the company and create more jobs.   In the end, for what? So many of our freedoms, that our founding-fathers intended, could be chipped away??    The Delaware governmental system has few checks and balances left, if indeed someone oversteps their power. This situation screams for serious reform! A system built on this type of adversarial process eventually ceases to work, when fear of the Chancellor, turns everyone into pals — cooperating and colluding, which is definitely the appearance of an impropriety by any reasonable standards. That is one of the important lessons I learned while following this case. It became obvious to me that we have a judicial system run by special-interest groups (like the Bar Association), which is too beholden to Bouchard, who is all-powerful, as he was appointed to a 12-year term. This situation screams for serious reform.    Folks, your feedback is really appreciated and I urge you to send me your opinions or thoughts on the TransPerfect Case that rocked the nation’s business world and Delaware’s credibility.   Thank you for your continued input.  It is upsetting for me to watch what I view as one of America’s greatest business success stories, TransPerfect Global, a Delaware corporation, crumble under the Chancery Court’s apparent improprieties, which have made this once esteemed institution now appear suspect. It is truly inequitable as the actions by this court have filled the pockets of Skadden Arps and the court’s other “consultant” friends, while TransPerfect employees lose raises and bonuses, as this great company suffers. Chancellor Bouchard, I hope you and your cohorts enjoy all the money you seem to be plundering from this 25-year-old company… started in a NYU dorm room and now being picked apart by a careless custodian all with your approval. Know that when you try to fall asleep at night, is it not only the TransPerfect employees’ lives you are destroying, but Delaware’s business reputation, Delaware’s jobs, and in turn, Delaware’s economy. I’m shaking my head as I write this. What you have done is grotesque by any reasonable legal, business standards. Please see below… the resignation letter of the company’s CTO, Mark Hagerty. He cites Custodian Robert Pincus’ corruption, and how Pincus forced him to make a pirated copy of the Wordfast software (see my last article). The letter reported by Doug Rainey on “Delaware Business Now”, appears in full below. According to the CTO’s affidavit and testimony, from what I can see, Elting’s allegations and Bouchard’s conclusions are completely false. Also, it looks like this guy is clearly a heavy-hitter in the technology world, having worked for Larry Ellison at Oracle, and the founders of Abode as well. Read his letter and feel his frustration, and his venom towards this court-corruption. It leaps out at you. With what’s happening to TransPerfect and now Wordfast (which was not even a part of the trial!), it is a joke to think Amazon or any other technology company would want to incorporate in Delaware, much less put their second headquarters in our great state! Thank you, Chancellor Andre Bouchard. What you are doing is truly despicable. The company is currently in a sales “auction” process, run by Custodian Pincus. From my perspective, folks the whole thing looks like a rigged money-making machine for Credit Suisse, Alvarez and Marsal, Skadden Arps and other “consultants” who are friends of the court — and their “other client” HIG (who owns TransPerfect’s #1 competitor, Lionbridge)? For proof of conflict and impropriety, see this quote: “Robert Pincus, an attorney appointed by the Delaware Court to sell TransPerfect, said “business remains ‘very strong’ and the 4,000-employee firm has ‘a deep bench of talent’.” But he then added, “that more executive departures might loom, which could make TransPerfect less attractive to a potential buyer and drive down its sale price.” – Crains New York Business Magazine. What receiver or custodian or seller of any business, in their proper mind, would make these kind of comments to the press? By his own astonishing admission, Pincus looks to be violating the courts (ill-conceived) mandate and stating that his own idea of running an expensive auction will not “maximize shareholder value”… so why is he doing it then?? To maximize his own value?? You have heard me try to fight through my articles, what I view as clear, judicial corruption within the State of Delaware from the outside as an educated and informed observer for over a year, but now I urge my readers to please read carefully the letter below and see how it feels from the inside, when it affects someone’s job and his family! Scary and heart-breaking. I again call upon our elected officials to make changes in the law that will prevent future arbitrary and capricious actions by arrogant and rogue judges who think they can legislate from the bench.    

RESIGNATION LETTER OF FORMER TRANSPERFECT CTO, MARK HAGERTY

Dear Mr. Pincus, By this letter, I officially tender my resignation as Chief Technology Officer of TransPerfect, effective immediately. I am submitting this letter to you because it is my understanding that you are for all intents and purposes in control of the company. As the Delaware Court of Chancery appointed Custodian for TransPerfect Global, Inc. for over two years now, you have been, and continue to be, in a unique position of power over the employees at TransPerfect. You control the future of the company by virtue of the power the Court has bestowed upon you and your ability to vote on company issues as a member of the Board of Directors. While my tenure at TransPerfect has come to an end, it is my sincere hope that by stating the reasons for my resignation in this letter you will consider the impact your decisions have on employees of TransPerfect and ultimately on the value of the enterprise itself. What I have witnessed firsthand during these past two years is that you do not value, and do not care about, the employees of TransPerfect. I thought you were supposed to be a neutral third party appointed to the board of directors to make decisions that were in the best interests of TransPerfect during this ongoing court ordered process. I thought that being a Custodian for TransPerfect meant caring about its employees, who are the ones that have made it into the success it is today, and who are the lifeblood of the company. Without the tireless dedication of the employees, TransPerfect would not be what it is today, and they all deserve to be treated with respect and motivated to continue to grow the company. I know how important the employees are, and how much they have contributed to the growth of TransPerfect because I have been a loyal employee for over 14 years, witnessing it firsthand. When I joined TransPerfect the company had no technology at all, it licensed Trados and SDLX and products from competitors. TransPerfect was unable to even get to the table for large enterprise sales deals that involved technology because they had none, zero technology. Starting with GlobalLink Content Director (which I personally coded and supported and extended for clients like Avis and Dollar/Thrifty), I created the architecture of TransPerfect’s technology products and have hired, trained, mentored, and led an incredible technology team that is now the industry leader. I created the initial GlobalLink Project Director product with a small development team for the Yahoo/FIFA World Cup in 2006. In addition to currently being the technology leader in the space with major enterprise customers like HPE and Dell/EMC, GlobalLink Project Director is now the cornerstone of the entire TransPerfect production operation, translating billions of words per year for our clients, improving gross margins for our internal production centers, reducing employee turnover and improving the quality of life for our project managers by eliminating manual tasks and increasing efficiencies. I am responsible for GlobalLink OneLink, our website translation proxy product, brought to market in just one year by creating the architecture and code for the first version with a talented senior software developer who I recruited and convinced to join the company because I knew he could deliver. The list goes on, but you should already know about all of our great technology products, created during my 14 years as CTO, during your preparation to sell the company. So far in 2017 our GlobalLink branded technology products, which I am responsible for creating and evolving over the past 14 years, are directly responsible for roughly 35% of TransPerfect revenue, and even for customers that do not license our technology, our internal production teams at TransPerfect use GlobalLink Project Director and the suite of products for over 90% of all translation jobs that the company delivers. In the last 6 years, one such product, GlobalLink OneLink, alone has brought in $31 Million dollars in technology licensing revenue, and over $107 Million dollars in total revenue including services, while GlobalLink Project Director has brought in $40 Million dollars in technology licensing revenue and over $311 Million dollars in total revenue including services. That is well over $400 Million in revenue directly related to these two GlobalLink products in just the last 6 years. Our year over year growth for technology and services through three quarters from 2016 to 2017 is over 40%. Clearly as CTO who is responsible for these technologies, one would think I would be congratulated and rewarded for this kind of success. Then I look at my paycheck and my compensation has not changed in 2 years. I make the same salary today that I was making in 2015. Mr. Pincus, you are on the board of directors, the board controls my compensation. You are responsible for this unfair treatment of me. Have you been able to force TransPerfect to pay you whatever you want, increase your hourly rate, and hire as many other Skadden lawyers to enrich your firm and your pockets? Is it really fair and just that Skadden makes millions of dollars annually from TransPerfect, and I don’t get a raise for two years when I am responsible for generating 35% of the revenue and profits that are used to pay you and your firm and the firms you hire to assist you? Money, Greed, Power, Arrogance: these things corrupt people, have they corrupted you? I have dedicated the last 14 years of my life to TransPerfect. I am directly responsible for hundreds of millions of dollars in revenue. I am responsible for millions upon millions of dollars in profits over the years that went directly to Liz Elting and Phil Shawe as shareholders. By creating the technology platform that increased the value of TransPerfect by hundreds of millions of dollars, I have delivered in my role as CTO. Who is going to profit from all of my hard work besides the owners of TransPerfect? Robert Pincus will profit. Skadden, Arps, Slate, Meagher & Flom will profit. Credit Suisse will profit. Joel Mostrom will profit. Alvarez and Marsal will profit. EY will profit. Every firm you hire to assist you will profit. But there is no recognition of my contributions to the value of the company, and there is no upside for me. In fact, the only possible upside for the TransPerfect success that I, Mark Hagerty, ever had was Phantom Stock. The Phantom Stock program was created at my urging to Phil Shawe for the company to give some upside to employees as the company grew, since as a private company there was no opportunity for real equity for employees. There was always the hope that as the company grew and continued to be profitable the Phantom stock would be worth something significant. In fact the Phantom Stock price had been increasing every quarter, every year, along with the company success. But then, it began to decline after you became Custodian. How is that possible? Company revenues have continued to increase every quarter, one would expect the Phantom Stock price would go up too. But there was always a profit component to the formula for Phantom stock, and the millions of dollars in money spent by yourself as Custodian on Skadden and Alvarez and Marsal and others you hired, devalued the Phantom Stock, driving the price down even as the company grew. I wonder, when you and your investment bankers calculate EBITDA for TransPerfect for the sale, I bet you exclude all of these legal costs and other millions of dollars of costs from that calculation, right? You probably say it is a one-time extraordinary expense that will not exist after the sale, so you exclude that from the calculations, right? That helps you sell the company at a higher valuation, right? But, for the Phantom Stock calculation, did you apply that same reasoning? No. Did you care about the value of the Phantom Stock to the employees? No. When I cashed in my Phantom Stock, the payout was far less than expected because of this. I lost a lot of real money as my Phantom Stock declined in value, the only possible upside in the company that I ever had, as a direct result of you and your law firm billing TransPerfect for millions of dollars in fees. You had the power to amend the Phantom Stock plan to keep your extraordinary fees from depriving TransPerfect employees of the true value of their labor. But you didn’t. How is that fair to me? How is that fair to the other TransPerfect employees that actually contributed to the incredible growth in the value of TransPerfect as a company? On the topic of being fair to employees, I have attached an email I sent you back in February of 2016 regarding employee health benefits. TransPerfect CUT employee health benefits in 2016 compared to what they were in 2015. You had a choice, you could have done the morally right thing and kept benefits the same, you had the power. You could have shown that you do care about the TransPerfect employees. It was a tiny amount of money, nothing compared to what you make annually and the millions of TransPerfect dollars that goes to your Skadden law firm and the firms and consultants you hire. But you chose to cut employee benefits because that meant spending a few TransPerfect dollars on actual TransPerfect employees. If you are so convinced cutting employee benefits is a good decision, have recommended to your own Skadden law firm that they should cut employee benefits too? Shortly after you became Custodian, on Dec 1, 2015, I emailed you directly about another employee related issue. I asked you to please resolve the Yu-Kai Ng employee situation, regarding the unfair treatment regarding his pay. As Custodian you had the power to do the right thing and solve that issue quickly and easily with very little cost to TransPerfect. Instead you chose to spend TransPerfect money. You hired an investigator to write a report (how much did that cost?) that was, in my opinion, completely flawed. The investigation was flawed because the investigator never bothered to speak with me, Mr. Ng’s immediate supervisor, at all during the investigation. Wouldn’t any competent investigator seeking the truth have at least taken an hour of his time to interview Yu-Kai’s boss and get clarification on the situation. By not resolving the issue, you forced Yu-Kai to sue TransPerfect, causing him unnecessary stress and duress by having to sue his employer to receive his proper back pay and future pay. No employee wants to have to go through the hassle of hiring an employment lawyer and suing his own employer. You forced a situation that went on for many months and required mediation to settle. How much TransPerfect money did you waste to settle that case when you could have solved it by paying him fairly what he was due and spending nothing extra? How much money did Skadden and other firms you hired bill TransPerfect related to settling the Yu-Kai lawsuit? If you had just been unbiased and fair and focused on your duties as Custodian, TransPerfect would have saved a lot of money. I would venture to guess that the total money spent on lawyers and investigators exceeded what Yu-Kai was owed. Who profited from that? Not Yu-Kai. Not TransPerfect. Only lawyers and investigators. How many other employee related lawsuits have you directly caused by your decisions on the board? Continuing on the topic of how you choose to treat TransPerfect employees, and how you do not value their contributions to the company, I received an email from Carol Chuang in HR on September 5th where I was informed Keith Brazil’s title promotion to Senior Vice President was rescinded. I had subsequent follow up with her and her response on September 14th where she says the board “specifically also discussed his promotion and voted to rescind it.” As the controlling vote on the Board of Directors, that means you had the power to decide on this issue. This is such a petty issue, has no bearing on the sale of the company whatsoever, and the only goal of voting to take away a deserved title promotion from Keith Brazil is to send a clear message that the Board does not care about the employees. It is clear from the email thread that Keith was promoted before any new rules were put in place regarding titles. Also, the Board did not even bother to ask me, his manager, to actually give the reasons for his promotion, which would have clearly illustrated why he clearly deserved it. The bottom line is you decided to embarrass a critical technology employee, someone who has been with the company even longer than me and who has had a huge impact on the success of our technology. There is no valid reason for you voting to strip his title, but the message was clear to this and other hardworking employees: you are in charge and they don’t matter at all. We are talking about a title, not money. If you sent out a poll to all of the employees in the company and asked them if Keith deserved to be promoted to Senior Vice President, I am certain the vote would be overwhelming in favor of his new title. Everyone on his team, everyone in Sales, everyone in Production would agree he deserves it. But somehow, the all powerful Mr. Pincus gets to decide and chooses to rescind his title instead of affirming it. What effort did you even take to find out if he deserved it? I know the answer, since you never asked me about it …. None. I believe you are aware that the social security numbers, home addresses and annual salary information of TransPerfect employees were handed over to criminals who specialize in identity theft. As a result, I and every other TransPerfect employee have to lose sleep worrying about someone possibly stealing our identity, filing false tax returns on our behalf, or raiding our social security benefits in the future. I personally had my IRS refund delayed for 4 months because I had to schedule an in person meeting to prove my identity before I could get my refund. These are hassles and stresses I don’t enjoy that I have to worry about forever, for the rest of my life, just like every other U.S. TransPerfect employee. Why? It is my understanding that after your hand-picked head of Accounting, Joel Mostrom of Alvarez and Marsal took over the department, someone under him responded to an obvious phishing scheme and sent out all of the company W-2s with employee names, addresses, and social security numbers to someone that specializes in identity theft. That person must have been untrained for the job they were doing, because anyone with any knowledge of privacy laws and anyone that understands anything about keeping social security numbers confidential would never have replied to that email even if it came from Liz Elting herself rather than an impersonator. There is no reason to ever send all of the Social Security numbers of the employees to Liz Elting or anyone that might ask for them. If a CEO or Board member asks for employee compensation information, that can be supplied without giving out the actual W-2s and comprising employee social security numbers. By hiring Mr. Mostrom, by extension you caused this breach that impacts me and every TransPerfect U.S. employee now every day for the rest of our lives. Throughout this sale process over the last two years, I have continued to keep my head down, tried to ignore the noise and just do my job. By any fair evaluation, I have done an exceptional job, improving our technology products, increasing our reputation as the leader in technology in the translation space, increasing our customer base, and growing our revenues with remarkable growth over the last 2 years. During 2017 I have been asked to provide lots of information and I have done everything asked of me. You hired EY to prepare a report on the company to give to prospective buyers. I provided information to EY whenever they asked for it, spending considerable time to give them very detailed spreadsheets and information. I met in person with EY when they asked for it and answered all of their questions. I fully cooperated with them. The same goes for Joel Mostrom every time he asked me for information. I participated in phone calls with Joel, and even with you, whenever I was asked. I answered every question asked of me. The same goes for Adam Mimeles, TransPerfect’s corporate attorney, whenever he asked for anything related to due diligence for the sale, I have provided it, in detail. The only time I hesitated for even one minute was when James Pak of Skadden asked me about Wordfast source code. On Wednesday, August 9th, James sent me an email asking for a conference call. I immediately replied that I could do it the following day, Thursday, August 10th and asked him what he wanted to talk about, so that I could be prepared. When he replied that it was about Wordfast source code, I was very concerned. I had provided Wordfast employee, cost, and product information to EY for their technology report. When they finalized their report, they had removed Wordfast as a category. I was told that was because Wordfast was not part of the sale. I later had a call with you and Joel Mostrom where you asked me what other CAT tools TransPerfect owned (I mentioned Alchemy Catalyst) and what it would take to replace Wordfast after the sale. These interactions made it clear to me that Wordfast was not owned by TransPerfect and not included in the sale. That was made clear to me by you, EY, and Joel. When Mr. Pak asked me to discuss Wordfast source code, I reasonably felt very uneasy because I did not want to be exposed to liability for discussing third party proprietary information, such as source code, related to Wordfast. On Thursday I told Mr. Pak I couldn’t do the phone call until this issue was resolved. It then took until the end of the day on Friday, August 11th before I received a letter from you, Mr. Pincus, granting me indemnity related to Wordfast. Over the weekend and on Monday I was on a scheduled vacation in Maine with my family hiking, and Tuesday I was driving back to Boston from Maine and flying back from Boston to San Jose, CA so that I could be back in the office on Wednesday. I had an out-of-office message indicating that I could be reached on my cell phone in the case of an emergency. When I returned to the office I immediately emailed Mr. Pak and set up a call with him that morning. I spoke with him and answered all of his questions and educated him about our products and the source code. It was only after I had spoken to Mr. Pak that I saw the letters Skadden had sent to my attorney threatening Board action against me. I was actually shocked by that when I found out, but then I realized it was in line with the standard bullying and intimidation tactics that you and your Skadden firm use in dealing with TransPerfect employees. I immediately called up Mr. Pak and asked him to apologize to me personally, as I had been fully corporative and my vacation was planned months in advance. I pointed out to him that he could have just called my cell phone on Monday if it really was so urgent, and such an emergency that it caused Skadden to threaten my job for being on vacation for 2 days. He said my cell phone was not in my out-of-office message so he couldn’t call me. I never put my cell number in my OOO messages because that message goes to every person that emails me, and I don’t want to give out my personal cell phone number to every person that sends me spam or any external person that emails me. It is really quite astonishing to me that Mr. Pak could spend the time to write threatening letters but couldn’t take the time to contact someone inside of TransPerfect and ask for my cell number. It is not a secret to anyone in the company, my cell phone number is available in outlook and in the company directory. I was actually suprised that Mr. Pak refused to apologize after he fully understood everything. He was quite nasty about it and simply said, “You will NEVER get an apology from Skadden!” I know I did nothing wrong, I was just being cautious and trying to not get in any future legal trouble, and I was fully available if Mr. Pak had just even attempted to reach me on my cell, which he did not. I then proceeded to actually find a way to give him access to the source code in the most secure and quickest way possible. I personally set up a virtual machine in AWS and secured access to it and granted him access right away. It then took Mr. Pak multiple days just to provide the proper forms for the IT department so that access could be given to another Skadden lawyer and two experts hired by Skadden. If everything was so urgent, I don’t know why it took so long for that to happen. Delays caused by Mr. Pak and Skadden don’t seem to matter, but if I am on vacation for 2 days that requires me to be threatened by Board action (a Board which you control and hold all of the power as the deciding vote Mr. Pincus). All of this once again proves to me how much Skadden is biased against me, even though I have been totally cooperative. Despite how Mr. Pak had treated me, I continued to do everything he asked of me. I got on conference calls with him and his experts. I set up a call with Chris Cowperthwait when Mr. Pak asked for that, keeping it a secret what the call was about, because that is what Mr. Pak asked me to do. I sent email to Jean-Philippe Odent when he asked for that. I answered every question he asked of me. Despite my complete cooperation with Mr. Pak, he remained totally condescending and rude to me when he directed me in email to transmit the source code electronically to him on Sept 19th. I even forwarded the email to Adam Mimeles to get his opinion and his response was “I am also troubled by James’ tone in the other email”. Even with the poor, unprofessional treatment of me by Mr. Pak and Skadden, I personally copied the files onto a secure drive, working late into the night, and hand-delivered them to Mr. Pak in his office instead of delivering it to him in an insecure way (he originally requested insecure unencrypted ftp). I still don’t feel right about being forced to give over Wordfast source code, and I hope I don’t get sued for delivering a copy of it to Skadden and your experts. I am still totally unclear why Mr. Pak and Skadden had to hire TWO experts to look at the code, neither of which ever asked me even one question about the source code over the course of the past two months. When we had a patent litigation trial, we only needed to hire one expert. The other side only hired one expert. Why Skadden had to pay two experts, spending more TransPerfect money, is beyond me. But I guess when you are not spending your own money it doesn’t matter, just spend, spend, spend. I had trouble sleeping all weekend long. I kept thinking about the conference call I was asked to participate in on Friday by Credit Suisse with Citi financing bankers. This was the very first call I was asked to participate in related to the sale of the company. I answered all of their technology questions, I explained some of the culture of the company and the growth potential for the future. I gave them my background and how we have grown technology over the past 14 years. At the end of the call I felt really good about myself – reflecting on my fourteen years as CTO I felt that I really have done a lot of great things for TransPerfect. I was proud of what we have built here, and my contributions to TransPerfect. Then, as the weekend went on, I kept thinking about this being the very first time I have been asked to talk at all to anyone during the sale process. I have clearly been purposely excluded from every other call. I have been given zero indication that I might have a future with the company post-sale, quite the opposite. When the sale process started, I was informed that TransPerfect management would have a seat at the table. There was hope that the senior management of TransPerfect would be able to participate and submit a bid and be a part of the process. Then that promise went unfulfilled. Senior management does not support a sale to H.I.G., and wanted a chance to compete for company ownership. Our senior management team was told “NO”: you cannot submit a bid, you cannot participate in the process, you have no chance. You, with your actions, have made it abundantly clear that I have no future with the company post-sale, and in fact you don’t really care about the future of the employees of TransPerfect at all. Once you sell the company, you cash out, go back to your wealthy law firm, enriched with unchecked TransPerfect fees, and wait for the Court of Chancery to give you the next opportunity to bill millions of dollars in fees with no accountability and unlimited power. I, on the other hand, will be out of a job with zero compensation beyond my past salary for the hundreds of millions of dollars in value I created for TransPerfect over the last 14 years of my life. So I thought about that all weekend long and came to the conclusion that I am not going to keep coming to work every day continuing to create value for TransPerfect, just waiting for the day the company gets sold to a competitor and I am out of a job. I just got back from the third annual GlobalLink Next conference in Chicago. It was so uplifting to hear our customers talk about how happy they are that they chose GlobalLink technology, how great TransPerfect is to partner with, how we solve their problems and how our technology is so much better than the competitors in our space. They know this firsthand because many of them switched from a competitor solution to GlobalLink and sing the praises of the GlobalLink technology. I love our customers. I love the technology I have created here. I love my senior technology team, many of whom have been working for and with me for ten years or more. I love our senior management team. Fourteen years I have been working to build something great, working tirelessly, with so much pride and dedication in my work that I never use up my annual vacation days and thus max out and lose vacation days every year. That has kept me here through all the turmoil, and I have kept my team together through it all. But my contributions are clearly not valued, as evidenced by the lack of a raise in 2 years, and everything else I have outlined in this letter. I just kept asking myself all weekend, “I have no future here, so why am I still here?” This resignation letter is the answer to that question. Sincerely, Mark Hagerty, Former CTO of TransPerfect Translations International, Inc.
   
Please note new e-mail address, [email protected]
Please note new Twitter account, https://twitter.com/Judson_Bennett
The TransPerfect saga has just taken a new twist, as the original plaintiff Elizabeth Elting, who through nefarious cronyism, which included her lawyer and the Delaware Chancellor, in the most controversial and biased corporate case in US history, was able to prevail, unjustly in my opinion, in the Delaware Courts (Chancery and Delaware Supreme Court). However, in New York where equity, justice, and the law are still alive and breathing, there is a different story brewing. Apparently when falsehoods are instituted in a court of law and damage is done to the harmed recipient (in this case Philip Shawe); and when it appears the Delaware Chancery case (where Elting had no witnesses) rested on Elting’s attorneys repeating these lies, fraud, and fallacious accusations as evidence has now been decided wrongly, you just can’t say, “Whoops, we now withdraw these offensive claims in the interest of judicial expediency!” As a matter of interest, I was told by an attorney friend, if Elting’s lawyers were aware of the falsehood of these filed claims, they could be disbarred. Indeed the stench I have smelled from the beginning is not emanating only from Bouchard, but also from the Elting camp, and her lawyers might have stepped in it in New York!   From my view, it also appears that Elizabeth Elting’s mental history could now come into question and be public record for all to see, considering her probable, false claims of emotional distress. Objectively, this writer and investigative reporter has to consider Elting’s claims and method of operation as to her unfounded attacks on Philip Shawe, her unreasonable positions, her refusal to settle amicably, and her captured-on-tape misrepresentations to the Delaware Courts and the New York Court as reprehensible. One must ask why has Chancellor Bouchard and his Custodian, Robert Pincus from the law firm of Skadden Arps, become an accomplice in her witness-less case? When something makes no sense, one must follow the dollars, and in this case, my opinion is that the money-trail will go all the way to the tailpipe of Bouchard’s Bentley!   In my view, If indeed justice is served, Philip Shawe should be vindicated and the Delaware decision will eventually be reversed and corrected. Her attorney makes malicious accusations, that in my opinion, a judge could only believe if he were in cahoots, and boom: The damage is done. Now that Bouchard relied on all those false stories, and in New York, she’s basically saying: “Well, I didn’t mean it, I can’t prove any of it, so now, I want to withdraw all my claims.” It’s outrageous.   Please read the fascinating piece in which Shawe’s New York attorney discusses the case. Stay tuned folks, this case is incessant in its fluidity and yours truly is going to be on top of it until justice is done.   As always your comments are welcome.   Sincerely Yours,   JUDSON Bennett-Coastal Network  

Philip Shawe’s Attorney Discusses Transperfect Co-CEO Liz Elting And Legal Team Seeking Permission From The Court To Discontinue All Offensive Claims Against Co-CEO Shawe in New York Supreme Court

NEWS PROVIDED BY

The Edelsteins, Faegenburg+Brown,llp

 

Oct 09, 2017, 17:40 ET

NEW YORK, Oct. 9, 2017 /PRNewswire/ — After three years of contentious litigation, numerous motions and unyielding delay tactics, TransPerfect Co-CEO Elizabeth Elting and her Legal Team consisting of Kramer Levin, Paul Weiss and Gerald Lefcourt are now asking New York Supreme Court Judge, Debra James, to discontinue Elting’s claims against Co-CEO Philip Shawe. This comes after the judge made a recent determination that the exchange of discovery would proceed in the New York Tort case.

Shawe’s attorney Glenn Faegenburg of The Edelsteins, Faegenburg & Brown LLP said, “Elting’s legal team should not be permitted to unilaterally discontinue claims they have already presented and aggressively litigated in New York County Supreme Court, in order to avoid providing discovery regarding those claims.”

“Among Elting’s frivolous claims against Shawe, that she and her legal team now want to drop, are false allegations of defamation, assault and intentional infliction of emotional distress,” Faegenburg continued. “Absent the Court’s permission to withdraw their claims, discovery supporting Shawe’s contention that Elting and her legal team filed a false defamation action against Shawe they knew was untrue will likely be uncovered.”

Faegenburg said, “We believe that the false defamation countersuit is the product of a scheme by Elting, in concert with her advisors, to manufacture false claims against Shawe, and that many of those schemes are memorialized in Elting’s emails. If their motion to discontinue Elting’s counterclaims is denied, emails regarding these schemes may be required to be turned over to Shawe as part of the discovery proceedings in the New York Tort action.”

“Now that Elting and her team know that the discovery process may, in fact, reveal nefarious planning on their part, she is seeking to petition the Court to ‘take-back’ the claims she previously swore to and fiercely litigated,” Faegenburg said.”Notably, this same tactic was used in the Delaware case where Elting withdrew over 250 allegations from her complaint the day before an expedited trial was to begin. In that case Shawe alleged that Elting and her lawyers had fraudulently manufactured deadlock to convince the Chancellor to put the company up for sale,” Faegenburg added.

The court’s edict also subjects Ms. Elting’s mental and psychological history to the scrutiny of the Court. Elting and her attorneys know that by claiming physical, emotional, and psychological damages, Shawe will be entitled to copies of her medical records including mental health records. In light of the Court’s recent ruling to permit the discovery process to proceed, Elting’s only hope of keeping her personal records from being revealed to the court and to the public is to ask the Court for permission to withdraw the claims that she herself intentionally made against Shawe.

“My time is important. Mr. Shawe’s time is important. Elting and her lawyers have wasted our collective time litigating non-meritorious claims against Shawe for years. What really disturbs me is that the only reason they are backing out now is because they don’t want the discovery process to expose that they used an e-mail that I myself wrote in an effort to protect both parties, as a basis to file a knowingly false defamation claim against my client,” Faegenburg said. “Now, they want to just snap their fingers and make their prior misdeeds magically vanish without repercussion!”

Faegenburg said, “We find it laughable and preposterous that Elting and her legal team are now claiming in their motion papers that they want to ‘streamline and simplify the litigation, and to bring it to an expeditious conclusion.’ If that was their desire why did they bring and litigate these unsupported and false claims for years in the first place. The truth is that, this time, their plan is not playing out the way they wanted it to; now they are running for cover. We can only hope that the court sanctions them accordingly.

SOURCE The Edelsteins, Faegenburg & Brown LLP

              Please note new e-mail address, [email protected]     Please note new Twitter account, https://twitter.com/Judson_Bennett  Please make absolutely no mistake about it, Delaware is in huge financial trouble. After a few legislative band-aids were implemented to temporarily balance the budget in 2017, next year is going to be five times worse. Unemployment is rampant and Delaware’s incorporation bonanza is going to disappear, not only because of the increase in the cost of franchise taxes, but because business people nationwide no longer trust Delaware’s Chancery nor the Delaware Supreme Court to render fair and equitable decisions based on logic and legal precedent. The responsibility falls mainly at the feet of Chancellor Andre Bouchard whose controversial and subjective rulings in the TransPerfect case have rocked the nation’s business world. The appearances of improprieties in this unprecedented adjudication exposes the extreme bias, rampant cronyism, and corruption that has long plagued Delaware and has now caused the precipitous drop in Delaware’s ranking in the U.S. Chamber of Commerce Survey as the best place to incorporate in America, from first place to eleventh place!   Interestingly, a few lawyers, a Court-appointed Custodian, and the law firm of Skadden Arps with the help of Delaware’s Chief Chancellor Andre Bouchard and Delaware’s Chief Justice Leo Strine of the Supreme Court (all interconnected and members or former members of the same law firm) have become filthy rich at the expense of TransPerfect. Protected by opposition from the Delaware Bar Association and certain ESTABLISHMENT LEGISLATORS who apparently have no interest in positive change, absolutely nothing has been done to repair the now broken reputation of Delaware. Senate Bill 53 (sponsored courageously by Senator Colin Bonini) was released from committee, but does not yet have the support needed to pass. My sources have reported that the combined fees to TransPerfect, based on Bouchard’s ridiculous manner in which he handled the case, are now over $150 million dollars… Insanity!   I have followed and researched this case in detail, read all the transcripts, and interviewed many involved. I believe I know more about this case than any person on earth. I know when there is a grotesque injustice happening, and folks this TransPerfect case is the most grotesque I have ever seen. I predicted that Delaware would suffer the consequences of its recklessness, and what many are calling criminal behavior, a long time ago. I have also recognized when serious consequences are happening to the detriment of Delaware’s citizens. Hopefully this time someone will finally listen and do something about it.   That being said, one of my readers forwarded one of my recent articles to a State Senator from Milford who is a Republican, voicing his concerns about this situation. The Senator’s reply, knowing about the fleecing of TransPerfect, the incestuous connections in the judiciary, the dissenting opinion by Justice Valihura, and the national criticism of Delaware’s unfriendly business reputation – dropping from # 1 to # 11 in a national survey, rudely said, “consider the source”. It is obvious to this writer and investigative reporter – that like this State Senator – there are many on both sides of the political aisle in the Delaware General Assembly, whose only care is to keep the status quo and keep everything within the good ole boy network, regardless of the damage to our state’s reputation and financial well being.   Please read the article below and seriously take it under advisement when casting your future votes for choosing our state’s leaders.   As always your comments are welcome.   Respectfully submitted,   JUDSON Bennett-Coastal Network  

Transperfect case part of why Delaware’s business law is losing ground: Delaware Voices

Chris Coffey

Published 10:06 a.m. ET Oct. 7, 2017

tuskventures_headshot_chris_coffey

Although the regular troupe of Delaware judges and lawyers shrugged off the troubling fall from the number 1 spot to number 11 in the U.S. Chamber of Commerce’s business litigation survey, Delaware residents are acutely aware of the state’s recent rankings plunge.

Delaware has always shouted its top ranking in the chamber’s review, and rightly so. However, now that Delaware has tumbled out of the top 10 in most areas of the well-respected poll, the survey has been disregarded by the same groups that have taken pride in that ranking for over 15 years. They now focus on the methods of the survey instead of the content of the results.

Citizens for a Pro-Business Delaware began as the voice for the thousands of silenced TransPerfect employees who have been impacted by the uncertainty of an unprecedented decision by the Delaware courts. However, the message resonates so vividly for Delaware residents that thousands more have joined to express their concern for the employees who live in Delaware and neighboring states.

When legislators passed the TransPerfect bill out of committee last summer, it was because they heard from thousands of Delaware residents who saw the future ramifications of the court-ordered TransPerfect sale.

While many supported the bill, it appears that some legislators hoped that they could remain in good graces with a very powerful band of judges, lobbyists, and lawyers, dismissing their constituents’ voices. Many, including the chair of the Senate elections and government affairs committee, proclaim they want Delaware to be the beacon for corporate law, but then they refuse to listen unless the jobs are Delaware jobs.

If this keeps up much longer, Delaware jobs will fast follow as the state continues to plummet in the business rankings. If these jobs go overseas, the 11th ranking will look like a pleasant memory.

Unemployment is already on the rise in Delaware. Do we need more uncertainty? Average Delawareans, on the other hand, empathized with the families about to lose their income and saw how the TransPerfect sales will be perceived: A state court meddling in the affairs of a private company, risking thousands of American jobs and Delaware’s ability to keep and attract businesses incorporated in the state.

Now, the U.S. Chamber of Commerce has reported that over thirteen hundred business executives and lawyers who control companies that earn $100+ million in annual revenues no longer believe Delaware is even in the top ten of business-friendly states. And if Delaware’s litigation leaders’ reaction is to disregard this long-treasured ranking, how much further will Delaware drop?

As the TransPerfect sale continues, thousands of Americans may move closer to losing their jobs to overseas workers, a common translation industry practice. Citizens for Pro-Business Delaware will focus its efforts on keeping jobs here in the United States.

We want to see any potential winner of the custodian’s process to include a commitment that 80 percent of the   domestic TransPerfect employees will remain in the United States for five years. We are calling on the governor and legislature to demand that any future outcome of this company involves leaving the jobs in the United States.

Every day, I speak with hard-working people who live in uncertainty about a process that feels rigged. A New York judge threw out the TransPerfect case based on its lack of merit yet after a second try in Delaware, an unprecedented ruling had led us to this scary place. The decision enriches a few Delaware elites, and one owner who wants to sell.

It subjects thousands of workers to massive uncertainty, and very possibly the loss of their jobs. The decision has helped to drop Delaware’s reputation for being the most business-friendly state, yet the courts continue.

If TransPerfect is sold and thousands of American jobs move overseas, how far will Delaware’s ranking fall? Will other companies incorporated in Delaware, like Ancestry.com and Dole, wait to see if Delaware disbands a company that is a global leader in translation services?

Citizens for a Pro-Business Delaware will continue to be the voice of thousands of TransPerfect employees and Delaware residents, as well as the supporters across the nation who recognize that Delaware is willingly leading the exodus of thousands of well-paying American jobs.

The custodian has tried to silence our efforts, but we will not kowtow to threats or intimidation. We will continue to fight for TransPerfect, and in turn Delaware. We will not back down from standing up for Transperfect employees. Delaware’s economy shouldn’t suffer even more because of a short-sighted unprecedented decision which could cost this country 3,500 jobs.

Chris Coffey is the campaign manager for Citizens for a Pro-Business Delaware, a group of TransPerfect employees and Delaware citizens working toward a solution in the case that preserves current jobs and the company.

Folks, beyond destroying, in my opinion, Delaware’s reputation for business, Chancellor Andre Bouchard may cost Delaware plenty of cold hard cash. Like I said back in February, Delaware’s Chancery Court’s Chancellor Andre Bouchard has put himself squarely in the crosshairs of Shirley Shawe who owns 1% of TransPerfect. While it would appear that her shares are only 1/100th of the company’s value, this does take into account that she is the swing vote! Therefore, her share isn’t worth 1/100th, but more like 20 percent of the value of the firm. Think about it this way, Elting should have had to pay Shirley Shawe to get the vote required for a sale, which experts may value as high as $50 million. But Chancellor Bouchard, by wanting to give all of Shirley’s value to Elting and his 20-year buddy, Kevin Shannon of Potter Anderson for free, has forced the sale of the whole company, per Shannon’s request. Putting aside that the “public use” requirement is not met, the State of Delaware also has a “just compensation” requirement. Delaware is responsible for transferring “market value” to the owner at the time of any “taking”, if this taking is deemed legal — so I logically believe Delaware tax payers will likely have to pay at the very least another $30 million plus to Ms. Shawe. The moment Bouchard steals her share against her will, she will undoubted file what is known as a “just compensation” case and it can be easily proven (I’m told by legal experts) that Shirley’s “swing vote” is worth 10- to 20-times what a normal share would be. I’m also told by folks close to the case that it is open and shut. If Bouchard operated in the real world of honest business people, Elting would have to pay Ms. Shawe somewhere around $50 million to $100 million for her share to get the control premium and dictate the exit strategy. In my view Chancellor Bouchard is robbing this 76-year-old retired mother of an absolute fortune! If this is proven, Delaware tax payers will then have to pay for his mistake!!! Think about it this way… if Shirley Shawe sues and wins, Delaware tax payers will owe her not her 1% stake, because that is not the value of the swing vote, Delawareans will have to pay 10% to 20% of the value of this company. And, for what? Why should Delaware tax payers have to pay for the arbitrary and capricious actions of a rogue judge? Bouchard is not only responsible for dropping us from #1 to #11 in the minds of corporate America, but mark my words, he also could cost our state millions of dollars for jilting Ms. Shawe! The press will have a field day writing about Bouchard’s age-discrimination against this female senior citizen (as well they should!). Folks, this assumes everything is on the up and up — but we all know better. In short and in my opinion, Bouchard is a horror show, and Delaware is buying tickets for everyone to watch. The problem is the tickets are extremely expensive!!! If TransPerfect co-CEO Elizabeth Elting wanted to take control of the company and sell it, she could have paid Ms.Shawe for her stake and taken control. Instead, she found a lawyer who was Chancellor Andre Bouchard’s buddy who was able to convince him to rule in her favor in an unprecedented illegitimate “taking” based on no evidence. Delaware may be on the hook to pay the price if Ms. Shawe sues and wins. I again call upon the General Assembly to pass SB-53 and restore integrity to our judiciary! See the story below which discusses Bouchard’s approved fleecing of TransPerfect’s coffers which has the appearance of nothing more than payola to his friends. It is hurting Delaware’s reputation and economic future. It must be stopped and respect and confidence restored to the Delaware judiciary. As always your comments are welcome. Respectfully Submitted, JUDSON Bennett-Coastal Network  

TransPerfect Mom Wants To Investigate Custodian’s Expenses

Source: Law360 By Matt Chiappardi Law360, Wilmington (October 2, 2017, 8:53 PM EDT) — Shirley Shawe, mother of one of the co-founders warring over control of the legal translation firm TransPerfect, launched a books and records demand to investigate the $21 million expense bill for the custodian appointed by the Delaware Chancery Court to sell the company. The lawsuit is another chapter in the ongoing saga of the business divorce between TransPerfect co-founders Philip Shawe and Elizabeth Elting. Chancellor Andre G. Bouchard ordered TransPerfect sold under court supervision in 2015 to break bitter infighting and a deadlock between the pair that the chancellor said threatened the profitable company’s financial future. Philip and Shirley Shawe have both staunchly opposed the decision, and in her records demand Shirley Shawe, a 1 percent shareholder in the company, is seeking to investigate “potential wrongdoing, mismanagement and corporate waste” connected to the custodian stemming from what she claims is “a lack of any meaningful oversight” over his invoices. Shirley Shawe claims the custodian, Robert B. Pincus of Skadden Arps Slate Meagher & Flom LLP, refuses to provide detailed invoices for his or his law firm’s time spent as custodian over the TransPerfect sale process, and has provided the court with contradictory reasons why, as well as falsely claimed that no group has raised objections or made allegations of abuse of discretion. “The custodian’s steadfast refusal to provide the requested information in spite of the extraordinary costs being incurred, and the attempts to prevent disclosure of the information, including through his counsel’s incorrect statements to the court, presents more than ‘some evidence’ to suggest a ‘credible basis’ for at least the following potential wrongdoing: mismanagement and corporate waste by the directors and officers of the company, related to, at least, a lack of any meaningful oversight of the invoices being paid vis-à-vis the services being rendered,” Shirley Shawe said in the demand. Philip Shawe told Law360 in an emailed statement Monday that Pincus would not allow any transparency into his “enormously large” itemized bills. “To my mother and I there is nothing more disheartening than seeing the court-sanctioned looting of our company,” Philip Shawe said. “The combined cost to the company and the parties, of the legal and custodian-related fees in front of Chancellor Bouchard, have now surpassed the $150 million mark. In my view, this provides the perverse motivations and incentives that driven the whole Delaware process.” Pincus and his counsel did not immediately respond to requests for comment Monday. Under Delaware law, shareholders can seek to have the Chancery Court compel a company to hand over records if they can show a “proper purpose” for doing so, usually to investigate a credible suspicion of wrongdoing. Shirley Shawe’s demand is the latest in a long line of court actions in multiple forums she and her son have filed after Chancellor Bouchard’s 2015 sale order, which was affirmed by the Delaware Supreme Court in a 4-1 decision. U.S. District Judge Gregory M. Sleet last week threw out a lawsuit Philip Shawe filed in Delaware federal court claiming the sale order violated due process and the takings clause in the U.S. Constitution, ruling it was an improper attempt to appeal a state court’s decision. The younger Shawe also sued Pincus in New York federal court, claiming the custodian was trying obtain authority to restrict him from the sale process. Shirley Shawe had filed a Chancery lawsuit to force a TransPerfect stockholder meeting where she said she would break the deadlock by voting her 1 percent stake with Elting’s 50 percent stake to Philip Shawe’s 49 percent. Elting had refused the overture because of what she said were strings attached that would alter the structure of TransPerfect’s board, and Chancellor Bouchard ruled any such meeting would be futile. Shirley Shawe’s bid for interlocutory appeal was denied by both Chancellor Bouchard and the Delaware Supreme Court. Elting and Philip Shawe have been locked in a very public battle over TransPerfect since at least 2014, when Elting petitioned the Chancery Court to break their deadlock. The pair founded the company in a New York University dorm room roughly 25 years ago and grew it into a global powerhouse that takes in hundreds of millions of dollars in revenue annually. The two were once engaged to be married, before breaking off romantic ties in the late 1990s. They remained business partners until a spectacular falling out that resulted in a tangle of messy litigation and accusations, some deeply personal. Shirley Shawe is represented by Jeremy D. Eicher of Eicher Law LLC. Pincus is represented as custodian by Jennifer C. Voss of Skadden Arps Slate Meagher & Flom LLP. The new case is Shawe v. TransPerfect Global Inc., case number 2017-0679, in the Delaware Court of Chancery. The other Chancery cases are In re: TransPerfect Global Inc., case numbers 9661, 9686 and 9700, and Shirley Shawe v. TransPerfect Global Inc., case number 2017-0306. The Delaware federal case is Shawe et al. v. Pincus et al., case number 1:17-cv-00277, in the U.S. District Court for the District of Delaware. The New York federal case is Shawe v. Pincus, case number 1:17-cv-06673, in the U.S. District Court for the Southern District of New York. –Additional reporting by Ryan Boysen, Jeff Montgomery and Chelsea Naso. Editing by Marygrace Murphy.
Please note new e-mail address, [email protected] Please note new Twitter account, https://twitter.com/Judson_BennettThe picture below says it all!  In the Barcelona newspaper, the picture of court appointed custodian Robert Pincus in the TransPerfect Global case surrounded by his money is an indication of the rip off of the century! Robert Pincus, according to my information, with the absolute approval of Chancellor Andre Bouchard, has apparently charged exorbitant and unnecessary fees to the complete detriment of this successful company and its employees. Pincus and his buddies are literally becoming multi-millionaires at TransPerfect’s expense. This is a legal bilking to profit friends of the Judge. In reality, I believe it is intrinsically criminal and Chancellor Bouchard is responsible. There needs to be a criminal investigation by the Attorney General of the State of Delaware or perhaps the FBI ! Please read below what a mockery of our state has been made around the world:    

The forced sale of TransPerfect has cost the company $ 20 million in lawyers

A US association claims that several companies are enriched by the conflict while 4,000 workers fear for their jobs

CARLES BALLFUGÓ 14.09.2017 11:35 h     Delaware Supreme Court Judge André Bouchard’s decision to order the forced sale of the Transperfect translation multinational  has cost the company more than $ 20 million to hire a variety of law firms , investment companies and specialized entities in mergers and acquisitions. According to a piece of advertising by the Citizens for a Pro-Business Delaware’s association (CPBD) published on full page in various media, a dozen signatures would be enriching themselves with the shareholder conflict that the company lives.
  The advertising piece which has had access Global Chronicle also notes that Robert Pincus, a lawyer partner at law firm Skadden and custodian (judicial administrator) of  Transperfect , would be getting a salary of $ 1,425 an hour, about 1,200 euros, for overseeing the controversial sale force of the company.

HAZARD JOBS

Through this action, the association CPBD wanted to point out that while several companies invoice huge amounts of money to the company under Pincus, the 4,000 employees of the company worldwide, 500 of them in the operating center of Barcelona , continue fearing for their jobs if the forced sale of the multinational of translations is finally executed . A few months ago, Delaware Supreme Court Judge Andre Bouchard ordered the company’s forced sale to resolve the stakeholder conflict between the company’s co-founders, former Liz Elting and Phil Shawe, whose relationship is more deteriorated than ever and their positions in regard to the company, the antipodes of each other.

WITHOUT PRECEDENTS

The forced sale of a successful private company is an unprecedented move in United States history and its precursors, Judge André Bouchard and attorney Robert Pincus, may be breaking the legal limits,according to experts familiar with the case. The purchase of Transperfect by a private equity fund would entail relocation and dismissal, as has already happened with the company Lionbridge, Transperfect’s largest competitor globally, which relocated the centers of Spain and France and destroyed thousands of jobs.
  The forced sale of TransPerfect has cost the company $20 million in lawyers      
Below is an interesting overview of the TransPerfect Global case, adjudicated in the Delaware Court of Chancery by Andre Bouchard. What makes this article fascinating is that it was written by (Retired) Justice Melvin Schweitzer, the Judge who handled the case in New York Supreme Court, before the case went to Delaware and in front of Bouchard.  Before Justice Schweitzer hit the mandatory retirement age, he’d gutted Elting’s case and labeled it as “squabbles” — Then after losing in New York, Elting shopped the case to Delaware, where she found the Bouchard-Shannon duo… to turn “squabbles” into one of the most dangerous and controversial decisions in business-law history. Even more interesting is that Justice Schweitzer has been openly critical of Chancellor Bouchard’s handling of what was “his case” — and called the result “extreme” in an interview with the Delaware News Journal. According to sources close to the case, Justice Schweitzer was so moved by Delaware’s handling of the matter, that he agreed to judge a moot court scholarship contest for law students who entered a competition set up by TransPerfect co-CEO, Philip Shawe — offering hypothetical arguments of appeal before the United States Supreme Court, where this controversial case may indeed end up. A mock panel of Supreme Court Justices including Justice Schweitzer and Alan Dershowitz were among the panel members who determined the winners of the competition. This was an innovative and philanthropic idea by co-CEO Philip Shawe, who in my view has been unjustly damaged by Bouchard and the Delaware Chancery. Make no mistake, this is the greatest business injustice in Delaware, and possibly U.S. history as well.   In my opinion, the blood of every hard-working family left jobless, based on this unprecedented court intervention will be all over Bouchard’s hands. I pledge to profile each and every family for all of Delaware to see as to the significant massacre Chancellor Bouchard intends to create by his outrageous rulings. Perhaps in the near future they will be able to testify for his impeachment.  As always your comments are welcome. Sincerely Yours, JUDSON Bennett-Coastal Network CHECK OUT THE ARTICLE BELOW   For reference:   [youtube https://www.youtube.com/watch?v=wXEHyTA_8ck?ecver=1&w=560&h=315]  
Source: Law360

Possible 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.
 
Judson Bennett   Please note new e-mail address, [email protected]   Please note new Twitter account, https://twitter.com/Judson_Bennett
Chancellor Bouchard’s relationship with Kevin Shannon of Potter Anderson is extensive and well-documented.  My opinion is the TransPerfect case is worthy of Judicial Corruption and whatever those Philadelphia judges did recently to get hauled off by the Feds doesn’t hold a candle to what Bouchard has done.   Here’s my view of what I’ve witnessed:   ·         Bouchard and Shannon (of Potter Anderson) share a 20-year country-club friendship dating back to when they worked the same side of the Disney Ovitz $100 million severance case.

·         When Bouchard became a judge for the first time — right before the TransPerfect case — he had to give up his prestigious board seat at the St. Francis Hospital, and he picked his friend Kevin Shannon to take his vacant seat.   ·         Bouchard, in his first big case, sees Shannon’s name on the TransPerfect case. He assigns all the cases as Chief Chancellor and assigns Shannon’s case to himself so he can control the outcome, in my opinion. Isn’t that convenient folks? And, what a nice time to start paying back your friends!?!   ·         Bouchard’s bias shows, as he ridiculously rules in Kevin Shannon’s favor in two different aspects of the case, Merits and Sanctions.  For the first time in history, he orders the forced-sale of a stock-based private company in a zero-witness case, simply on the word of Kevin Shannon. Again, not one person testified for Elting at trial — they all testified for Shawe — yet she won in a landslide!   ·         TransPerfect is an industry leader with twice the profit margins and twice the growth rate of its closest competitor. It has grown from just 2 people in 1992. It never had a year without growth and never a year without a profit. It is one of American’s greatest, business success stories. The company is not dysfunctional in any way and the testimony Bouchard cited to prove this, was totally plucked out of context.   ·         In the sanctions motions, after being railroaded by Bouchard for years, (Shawe lost 90% of all of the 50%/50% motions), Shawe motioned the Court for a criminal jury trial to fight what I’m sure he views as Bouchard’s corruption. What 25-year successful businessman requests and volunteers to subject himself to criminal conviction at the whim of a jury, on his own free will?  None. This proves to me two things. 1) Shawe is innocent and the Sanctions are trumped-up by Bouchard. 2) Bouchard badly wanted to be judge, jury and executioner for this case for a reason – and his rulings have transfered a king’s ransom to Bouchard’s former law partners and other cronies. The numbers are astonishing, my friends! You would be outraged if it were you on the other side of Bouchard’s ruling! Believe me!   ·         Bob Pincus of Skadden Arps is billing $1,425 per hour as the Custodian/Receiver in Delaware… hiding his bills in lump-sum billings. Bouchard then approves them by Court Order, and then (employees have told me) Alvarez and Marsal, run over to the Accounting Department and waive a court-order in front of the poor check-cutter named Silvia – and scream they all need their bills paid immediately! Alvarez and Marsal (Pincus’ Court Appointed Consultants) demand payment for Skadden’s outrageous bills immediately with no review – and Pincus scratches their back the same way, with immediate bill approval and no detail required. This crazy operation is a grotesque and greed filled feeding frenzy that is breaking TransPerfect.  I encourage investigative reporters to call TransPerfect, ask for Silvia in accounting, and ask her about this chicanery.     ·         In my opinion, Philip Shawe was denied a fair trial by Chancellor Bouchard. Although there are not jury trials in the Court of Chancery, they are supposed to be conducted under similar rules. Basically, I see this biased Judge as saying, “I’ll make the decision to fine you $7 million myself, even though no one testified against you, because I don’t like you.”  He did not follow the law, in either the Merits or the Sanctions, which were all in favor of Mr. Shannon. Does Bouchard think the public are idiots?

·         There’s more:  During the decision phase of the trial, when a jury would have been sequestered during a jury trial, what do Bouchard and Shannon do?  They travel to New Orleans and make a public appearance together, co-paneling before law students at Tulane University. This is insane, folks! From this move alone Bouchard should have recused himself!  What judge does public speaking appearances with one-side’s lawyer, while the case is being decided??     ·         It gets worse, and to me, this is the clearest evidence of wrong-doing in the judiciary: Bouchard orders a third of Elting’s trial fees to be paid by Shawe, and all Elting’s attorneys had to do was show their itemized bills, and had to take deductions – for things like mediation time and working on Shirley Shawe’s case – except one person, who didn’t have to produce ANY bills, and got a FULL 100% reimbursement without having to show anything. Can you guess who?  That’s right: Kevin Shannon and Potter Anderson. He didn’t have to show his bills and Potter Anderson didn’t take a single deduction. In my view, this certainly looks to be an arrogant act by Bouchard to show such biased favoritism, with an unprecedented enrichment by Chancellor Andre Bouchard for Kevin Shannon and the law firm of Potter Anderson. It is truly the appearance of an impropriety. I say this whole thing should be turned over to the Attorney General, for investigation of both Bouchard and Shannon for possible corruption. The evidence couldn’t be any clearer.   ·         Bouchard’s decision to order the dissolution of TransPerfect is 8 pages long. It basically says that “ these guys don’t get along.” Therefore, Elting loses her offensive claims against Shawe. Shawe loses his claims against her “without getting to the merits” (my view is that this means that Shawe proved his case, but the judge is not going to rule for him anyway). And therefore, he is going to arbitrarily force an auction of this 3-owner company, because of a “Director Deadlock”.  And he is going to give Kevin Shannon and Elting the maximum payout humanly possible, so the case can never settle.   ·         I have read other op-eds that blame the parties in this case for not settling. The bottom line here is, not being able to settle this case through reasonable negotiations, is indeed a circumstance obviously created by Bouchard, not the involved litigants. When a Judge intentionally uses nuclear weapons (when a fly swatter will do), and rules heavily against one party – a case can never settle under any circumstances. The deck was obviously and completely stacked by the Chancellor and in my opinion this is criminal.   ·         To give you a simple example of why this is all Bouchard’s fault (or worse, in my view, is his calculated and engineered plan)… Imagine two parties fighting over dollars, Party A says B is owed 0, Party B says he’s owed $1,000,000. Each party only has a million. The judge says, B, I rule you get $5 milllion, and A I’ll try to ruin your reputation with 106 pages of lies.  B now has a ruling worth $5 million, but all their assets together are only worth $2 million. How can the case settle? What can A give B to settle? The answer is nothing. And this is the answer that makes the case never ending, and makes Bouchard’s inner-circle of cronies, rich at the expense of TransPerfect and Philip Shawe.     I urge the Delaware Lawmakers, the Delaware Bar, the Court of the Judiciary, the Attorney General… Someone must step in and stop the TransPerfect madness! Shawe, Elting, and TransPerfect don’t deserve Bouchard’s continued fleecing of the company – and neither does any future Delaware corporation. THIS GOES BEYOND JUST THIS CASE, IT AFFECTS FUTURE INCORPORATIONS IN DELAWARE WHICH IS 1/3 OF DELAWARE’S BUDGET !

I have read the whole transcript several times and interviewed many folks, here’s what is obvious:  Did the litigants each write mean emails? Yes. Does the staff hate Elting? Yes. Is Shawe a tough, but good manager? Yes, And he’s respected and loved by the staff.  By Bouchard’s new standard of dissolution… every corporation or partnership or law firm, where people fight on email or in the Board Room, could be taken over by a rogue Judge and auctioned off without notice or due process! It Is an illegitimate “TAKING” under the 5th amendment to the United States constitution.     There is a lot at stake here. Being an eternal optimist, I’d like to believe this $100 million dollars, Bouchard has already cost TransPerfect, and the next $100 million that his planned forced auction is going to cost — is all going to be paid back by the apparent bilkers. Think about it!!!  A Delaware company, which has deadlock because of an even number of directors, comes to court for a solution, and rather than order the parties to appoint a third director and expand the Board — TransPerfect is forced to pay 1/3 of its value to legal fees, to the Judge’s inner-circle and to court-ordered consulting, accounting and investment bank fees. This is absurdity and sets a dangerous precedent that will ultimately hurt the State of Delaware which is already in huge financial trouble.     In closing, I will share more of my personal views: Bouchard’s handling of the TransPerfect case is completely insane and preposterous. Bouchard should face an investigation and potential impeachment. Kevin Shannon, Elting’s lawyer and Bouchard’s buddy, should also face investigation and possible disbarment. But all of this takes a back seat to the immediate issue of ending the environment of employee-fear that the Court appointed, Custodian (Chancellor Bouchard’s former business partner) Bob Pincus’s Nazi-like occupation and fleecing of this American success story. TransPerfect is a business being ripped apart by a Chancery Court that was supposed to be designed to protect businesses. Instead, the Chancery Court is lost at sea to the detriment of the State of Delaware, based on the current Chief Chancellor Andre Bouchard’s complete lack of a moral compass necessary to properly guide it.

As always your comments are welcome.

Respectfully Submitted,

JUDSON Bennett-Coastal Network   Judson Bennett   Please note new e-mail address, [email protected] Please note new Twitter account, https://twitter.com/Judson_Bennett

St. Francis-Gate

As you’ve been reading, I’ve been writing about what I see as obvious cronyism between Chancellor Bouchard and attorney Kevin Shannon of Potter Anderson here in the TransPerfect case in Delaware. The biased nature of Bouchard’s decisions through out the case are real and unquestionable. It’s not easy to dig up new information and I don’t exactly have the tools at my disposal that an investigative journalist a major media outlet has, but I have just learned about the most insidious tie I’ve learned of to date between Chancellor Bouchard and Shannon (the lead attorney for co-CEO Liz Elting of TransPerfect) that, of course, was never disclosed before trial. I call it “St. Francis-Gate.” Records have already shown Chancellor Bouchard, while in private practice, not only worked with Kevin Shannon on several matters over the years beyond the infamous Disney case. But perhaps most shockingly to me, Bouchard, when he was a senior officer on the Board of Directors at St. Francis Hospital, hand-picked Kevin Shannon for the prestigious Board seat vacancy that he left, when Bouchard had to give up his seat to become a judge. Let me tell you , this is breaking news, and it stinks. It is no coincidence that Kevin Shannon, who has been bestowed windfall after windfall by Bouchard from the Chancellor’s chair, was moved up to take Bouchard’s prestigious St. Francis board seat vacancy. The law is clear: Delaware’s Judicial Code of conduct requires that a judge is to disclose any potential conflicts of interest to the litigating parties including what could amount to the appearance of impropriety so that any of the parties can exercise their right to move for the judge’s recusal. This statute was designed to protect not only the litigants but the integrity of the judicial system in Delaware. Want more proof? Relationship Science is an independent site that tracks people with common business and social interests. Part of their slogan is: “We bring science to the art of business relationships.” Check out the science of Kevin Shannon.

Relationship Science

Relationship Science only connects Shannon to just 34 other people and, among his closest 34 personal connections, you guessed it, Chancellor Andre Bouchard: Let me take a small victory lap for uncovering St. Francis-Gate and the Bouchard-Shannon Board Seat, seemingly payola connection. I have been building reliable information sources in Delaware for over 50 years, and I want to thank them for providing me with vital leads to run down. I knew there was something wrong here, and the more I dig, the more it becomes painfully obvious that Bouchard’s agenda does not appear to be justice. Clearly Bouchard and Shannon have a long history of close connections together and in my learned and informed opinion, if we were in any other State but Delaware, this Chancellor never would have stayed on this case. The blatant disregard for ethics and corruption in Chancery is beyond belief, as I see it! Although now living in Palm Beach, I will always be a concerned Delaware citizen at heart. I am indeed concerned about the reputation of the Delaware Court System. This Chancellor, also as I see it, unethically did not disclose his friendship or former business connections with Shannon. He even made a public appearance with, and co-paneled together with Shannon, on a New Orleans legal boondoggle, during the decision stages of the litigation in the TransPerfect case last Spring.

Justice Leo Strine

So Leo Strine picks Bouchard to fill his Chancellor vacancy, in turn Bouchard picks Shannon to fill his St. Francis Board seat vacancy. According to various sources, Bouchard was socializing with both Shannon and Judge Leo Strine (who affirmed Bouchard and ran out Shawe’s attorney team clock at oral argument) at the Tulane legal boondoggle last year. By the way, I hear Kevin Shannon is not appearing on the Tulane panel for the first time in recent history, so this too could be tacit admission of his misdeeds last year? Bouchard never disclosed his relationship, hoping an investigative writer like me would not find it. Well I’ve been sniffing and I’m smelling smoke here. Then, predictably he proceeded to rule against Philip Shawe, although zero witnesses testified against him, in the most draconian rulings ever made in U.S. history. According to my sources, Bouchard did not allow email evidence on the company’s public server of a plot to manufacture deadlock by Elting and her attorneys, to be presented in Court. As seen below the Code of Judicial conduct is clear.

DELAWARE JUDGES’ CODE OF JUDICIAL CONDUCT 2008 CANON

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]

A Checkered Past

For those who may not know, since October of 2015, I have fervently questioned Delaware Chancellor Andre Bouchard, who prior to his appointment to the bench was a Democratic activist, over his appointments for the position of Chief Deputy for the Register of Wills Office in Sussex County, Delaware. I challenged him for appointing three democrats (possibly political favoritism) over more accomplished personnel already within the office of the Register of Wills. Since the appointments, each of them have failed in their duties and have since been replaced, one after the other. Instead of following the recommendation of the elected Register of Wills, Cindy Green (a Republican), who highly recommended a competent, experienced, electronic-filing expert already employed within the system, Bouchard has created dissension and multiple problems resulting in delays for people needing to get their estates in order. Hopefully Bouchard’s next appointment will be better. Following this background is another situation involving a current case in Bouchard’s Court, which I find interesting:

TransPerfect

I have been made aware of a Delaware corporation operating in New York City that is in litigation in Delaware’s Chancery Court. The Honorable Chancellor Bouchard is presiding over the case. I have obtained significant documentation, letters, affidavits, and so on. The company’s name is TransPerfect Global and it is owned by Phillip Shawe and Elizabeth Elting. Elting (the Plaintiff in the case), wants to sell her half of the business, but she wants more for her stock than it is worth. She wants the controlling share. Shawe wants to buy her out and keep growing the business, but Elting will not agree, so hence, the Chancery Court has taken over. When these things happen, equity is supposed to reign, not arbitrary and capricious rulings which may end up destroying a viable American company. What would you call a situation where a Delaware Corporation named TransPerfect Global, a very successful $600 million dollar company that employs 4000 people, is being forced by the Chancery Court to be sold because one stockholder chooses to be greedy? Delaware’s Chief Chancellor, Andre Bouchard refuses to address the evidence presented to him, and force an equitable sale to the willing partner, but chose to dissolve the company. I call it inequitable, especially when the company will most likely be put up for sale and thousands of jobs will be lost. Does this sound equitable? Bouchard installed a custodian who is a friend of his, and that man, Bob Pincus, received a detailed letter from 75 senior staff members at TransPerfect asking him and the judge not to sell the company. They asserted faith in Shawe as a manager and their roles in keeping the company in great financial standing. Pincus, a former Partner of Bouchard’s at “Skadden Arps”, chose not to share the letter with Bouchard. Instead, he claimed that he got “a letter from some of the staff” airing their grievances. Instead of refuting Bouchard’s claim that the company is in disarray, Pincus failed to disclose the fact that 75 top employees expressed concern over the court forcing a sale, and demonstrated that the company is running smoothly. These employees also made an offer of $200 million to buy out Plaintiff Elizabeth Elting. Understanding the amount is less than 50% of the company’s worth, and less than the figure Shawe offered to Elting, which she turned down, the point is that the employees were willing to put their own money up because they trust Phillip Shawe to run TransPerfect. Chancellor Bouchard apparently is not considering this in his assessment. From his rulings so far, he has empowered himself by declaring the successful firm in harm’s way. Affidavits on public file in a NYS court were also handed to Bouchard showing over 175 employees’ outstanding opinions of Phillip Shawe as a manager who cares about his company. Folks, as Shakespeare once said, “Something is rotten in Denmark.” What do you call it when the temporary court appointed custodian, a man named Bob Pincus, is appointed to run the company by Chancellor Bouchard and it turns out that Pincus just happens to be a friend of Bouchard’s? I call it cronyism, scratching the back of your buddy. Pincus, according to the evidence and complaints by the current company employees, has unnecessarily spent millions of dollars in ridiculous consulting fees, all while running up the cost of the litigation. Ouch!! Particularly outrageous, is that Bouchard recently appeared on a Tulane Law School panel discussion with Plaintiff Elting’s attorney, Kevin Shannon a couple of weeks ago in New Orleans at Tulane University (* a reference is provided below). The “jury is still out” in this case and Bouchard is the sole jurist. Their joint appearance certainly has the “appearance of impropriety” and should be cause for Bouchard’s recusal from the case. Additionally, the impropriety could be justification for an appeal or even a sanction from the Delaware Bar Association? What do you call it when Chancellor Bouchard appears on a public panel in New Orleans with the plaintiff’s attorney? I call it impropriety, especially when Bouchard is about to decide the fate of the defendant in the case. Under Delaware law “the appearance of an impropriety is as bad as the impropriety itself.” Bouchard should recuse himself from this case. It appears from the evidence, pleadings, and denials I have reviewed that Chancellor Andre Bouchard continuously plays loose with not only fairness and equity, but also with propriety and ethics. From my perspective, the concern here is that Delaware depends on its corporate fees to fill its coffers. Delaware is known as the corporate state. When its equity court, the Court of Chancery, becomes compromised by poor decisions and the appearances of impropriety, then why would people continue to incorporate their businesses in Delaware? This should be of great concern to our legislators, our business people, and all of our citizens. Delaware’s economic growth is depleted enough as it is. There is much more to come on this topic and this is the primary salvo. This is an interesting scenario – and a first of its kind – whereby a viable business could be forced out of business by the judicial branch of Delaware’s government. I have sent my opinions to Chancellor Bouchard, who is supposed to rule on this case on April 27th. I am curious to see what happens, however all indications from the previous pleadings and denials which are public record indicate that the company will go on the auction block and could be eventually outsourced abroad, killing thousands of American jobs. Folks, this is not what America is supposed to be about. Indeed, I find this possible scenario most disconcerting. Your comments are welcome and subject to being forwarded. Respectfully submitted, JUDSON Bennett-Coastal Network

TransPerfect Case Exposes the Risk to Delaware Economy from Bouchard’s Unchecked Power

William Shakespeare in his play Henry VI, incorporated (no pun intended) through his character “Dick the Butcher”, the famous line “The first thing we do, is kill all the lawyers”. Even today, lawyers themselves often smile at the inference made by Shakespeare about the perceived opinion so many citizens have about the ethics, standards, and practices of the legal profession. Unfortunately, when we need a lawyer, it is an expensive proposition. I know this to be true from personal experience as do many of my readers. The bottom line is that most attorneys will take either side in a civil matter as long as the money is there. In my mind, having to hire a lawyer to protect you is a necessary evil, because even your advocates are incentivized for a long, drawn-out, and financially draining process.

The only protection we have when we find ourselves entangled in a legal situation is the hope that the Courts will rule fairly and equitably. The lawyers are supposed to operate under strict ethical guidelines established by the Bar Association. The Judiciary is supposed to be held to an even higher standard, being impartial, unbiased, fair — without the appearance of impropriety, much less impropriety itself. When that does not happen, then it becomes a form of corruption leading to a loss of confidence in the judiciary system. In Delaware, the TransPerfect case has many in our state questioning the ethics of Andre Bouchard, the Chief Chancellor himself. When this happens, our democratic process becomes tainted, constitutional rights to a fair trial are trampled, and the damage to a company, the litigants, and the operation can be irreparable.

All this being said, Chancellor Andre Bouchard seems to have gone beyond “abusing his discretion” in the TransPerfect case. In my opinion he has obliterated it from any objective consideration. He has set a frightening standard for all Delawareans, which is of significant concern to our state. I have been writing regularly about this case in an attempt to bring Bouchard’s actions out of the shadows and into the light, as he single-handedly not only endangers TransPerfect, a private profitable Delaware enterprise — but also endangers Delaware’s corporate bonanza, which is responsible for 25% to 33% of our entire state budget. What happens if the money goes away? Bouchard will remain perched on his arrogant mountain, after recently entering the judiciary via a political appointment vs real bench experience. Indeed, he will not suffer, while the average man, woman, and child in Delaware stands to be meaningfully impacted by the rogue nature of his decisions.

The question is: Should a rogue Judge, through his capricious, arbitrary legal decisions, be able to sell off a successful company that employs 4,000 people for no good reason? Or should Bouchard be held accountable for his complete disregard of the law and precedence, his audacious appearances of impropriety during the case, his unreasonable — unheard of — and wholly-unsupported sanctions, and his complete disregard and disrespect for all true evidence in the case? Should he be permitted to cherry-pick testimony out of context to “back into” his desired (and predetermined result)? Simply put, in my opinion, to not hold Bouchard accountable for his actions of possibly destroying years of the Chancery Court’s sterling reputation, and turning it into a Kangaroo Court — as it has done during the TransPerfect case, would be an injustice. This may be my subjective opinion, but it is based on objective observations from many days of intense research which I have devoted to this case. Why? Because I believe Delaware deserves to know how Bouchard operates, and how his judicial overreach can damage our state.

Why the hell would any business owner incorporate in Delaware once they’re aware of Bouchard’s rulings? Businesses want stability and predictability. In this case, one shareholder, without a controlling share, ran into Court, produced no witness, spewed self-serving nonsense — and is now getting the company dissolved and auctioned off?! Who would take this risk by incorporating here? It is just a matter of time before Bouchard’s reputation for destruction starts taking more and more food off the table of the average Delawarean.

In brief, let us look at the facts:

1) A woman gets mad (Elizabeth Elting) and sues her partner Phillip Shawe in the Delaware Chancery Court.

2) Judge orders the company to be sold which makes $500 million a year – causing 4,000 workers and their families uncertainty – and the distinct possibly of losing their jobs.

3) There is no evidence of “irreparable harm” (the false hook Bouchard used to seize the company and install his cronies), is absurd. Bouchard himself admitted that since Elting and Shawe have fought for many years, his ruling was speculative in nature! It is outrageous — and folks — this cannot be what the Delaware Legislature intended!! In the “Harm” Section-226 of the Delaware law, is an indication that to show harm is something Bouchard must have evidence of — instead, he tells the world he’s “guessing”.

4) The company has 3 stockholders — ruling is undisputed, yet Kevin Shannon of Potter Anderson somehow convinced the judge that Shawe’s mom was not a real person, and not entitled to her own independent vote. There’s nothing in the evidence record that says Shirley Shawe will only vote with her son — another key ruling based on “NO EVIDENCE” other than Shannon’s say so (Elting’s lawyer).

5) The Plaintiff (Elting) (unlike Shawe who loves the company), stands to profit more, if the company is sold in its entirety, than she would if she just sold what she owned (her stock). So her game, for which the Court has been a willing accomplice, has been to use attorneys to create infighting and the illusion of problems at TransPerfect, and ask the court to force Mr. Shawe and his mother to exit their positions involuntarily. An un-American proposition under any circumstances.

6) Defendant, Phillip Shawe, was not allowed to present key evidence, because Bouchard intentionally suppressed it. This evidence was alleged to show Elting and her attorneys participating in Crime-Frauds, yet Bouchard would not allow the evidence to be used or even look at it in private.

Shawe is being sanctioned for the investigating of his own computer servers — as the employee handbook allows him to do. He is also facing sanctions for lying when there is NO EVIDENCE whatsoever that he did so. Bouchard paid no attention to the minor and immaterial differences in Shawe’s 10 witnesses vs. Elting’s 0 witnesses. Bouchard accused Shawe of destroying records, when indeed he did not. Shawe made a mirror image to preserve all computer evidence; what’s the difference whether it is employee X (Elting) (out of 4,000) or employee Y — the material point is all evidence was preserved. Bouchard seems incapable of understanding that once something is preserved, it cannot be destroyed, spoilated, or even deleted. Bouchard drones on and on (in his opinion) speaking of how Shawe “deleted” files, when in actuality, he did not. He made a mirror image and all was preserved. Three experts verified this in the hearing.

Plaintiff’s attorney Kevin Shannon is an old friend of Chancellor Bouchard. During the deliberation phase, while Bouchard was supposed to be weighing evidence adduced at trial, he instead went to “boondoggle” in New Orleans and co-paneled together with Shannon in a PUBLIC FORUM. If a member of a jury did this in deliberations, they’d be dismissed. An obvious appearance of an impropriety? This investigative reporter is convinced that it is more than that.

Sanctions imposed on Phillip Shawe in the amount of $7.1 million dollars. High? I wonder what your family gets if you get hit by a Delaware bus? … probably a lot less. This amount is obscene and biased. Bouchard’s miscarriages of justice keep adding up. Singularly, they could possibly be justified? Together, they do not pass the laugh test.

The custodian, appointed to run the company is a member of Chancellor Bouchard’s former law firm and has already run up an $8 million dollar tab and is being sued in federal court along with Bouchard for violating the employees’ 1st and 4th amendment rights. And that $$ meter is still running!

The legal fees to date for both parties are estimated to be around $42 million dollars, plus $8 million in costs mandated by the court ordered custodian. That’s $50 million the Chancery Court has forced a DE corporation to spend on cronies and cronies of cronies. This calls out for judicial reform by the legislature and must stop.

Frankly, from what I have gleaned from this case, which I have devoted countless hours to studying, the only person who should be sanctioned is Chancellor Andre Bouchard. Let’s say you incorporate in Delaware, you fulfill the American dream of life, liberty, and the pursuit of happiness by creating a successful business, but then you have a judge order the company to be sold, fine one of the owners to the tune of 7.1 million dollars, fleece the company out of $ 8 million (or arguably $50 million) bucks, and ultimately risk its destruction. Wow, doesn’t make incorporating in Delaware very attractive, does it?

This is an issue that all Delawareans must be aware of, must be concerned about, and must take a stand on. I will say it again, why the hell would anybody want to incorporate in Delaware under Bouchard’s unprecedented, unpredictable and “no evidence” rulings? Make no mistake: Nevada and Rhode Island are salivating at the possibility of usurping Delaware from its main economic driver of corporate revenue, and Andre Bouchard is giving our competitor states all the ammo they need.

As always your comments are welcome and subject to being forwarded.

This is a long piece, but worth reading to understand how the rule of law is now seriously flawed by the inequities of a failed system. Even in little Delaware this growing disease now pervades our society through cronyism, favors, and improprieties I have been writing often about the TransPerfect Global case which has received national attention because of the controversial rulings made by Chief Chancellor Andre Bouchard. I have been extremely critical of the Chancellor in the way he has handled this case for many reasons, even suggesting perhaps he should be removed from the bench. I have read every public court document in detail about this case and interviewed objective lawyers and employees of the company. I know everything about this case. Here are the undisputed facts: TransPerfect is a translation company founded by Phillip Shawe and Elizabeth Elting that is incorporated in Delaware. Shawe owns 49%, Elting owns 50 %, and Shawe’s mother owns 1%. Despite any differences, Elting and Shawe moved past their failed romance, and from a dorm room, created a multinational company successful beyond imagination. Regardless of these differences, the company has been high growth, extremely successful, and extremely profitable (due primarily to Phillip Shawe’s leadership and innovation) each year, over the past 24 years. The company now has revenues of over $500 million per year, and employs 4000 people, from 90 offices world-wide. Elizabeth Elting decided she wanted to exit the company, and wants the whole company sold. Why? Because half of the whole company price — is worth considerably more than what Elting could sell her own stake for. In other words, Elting makes much more money if she can force Shawe to exit the business at the same time that she does. The problem is, Shawe doesn’t want to sell. Shawe loves his company, his stock is private property, and he doesn’t want to sell it. Even if the dramatics described in Bouchard’s romance novel decision were true (which they are not), the Court simply should not be forcing one person (two in this case, Phil and his Mom) to sell their shares involuntarily, just to enrich Elizabeth Elting within her timetable. The Court is not meant to insert itself and act as the buy/sell mechanism for Ms. Elting’s personal agenda. Further, Elting is no woman of virtue. Not one single, unpaid non-party witness took the stand for Elting. She supposedly does something at this 4000 person company, but yet no one I’ve talked to can speak to any contributions she has made. Again, Elting could not produce one single, fact witness, beyond her own self-serving story. In the past few years, Elting removed millions of dollars from the company in unauthorized cash distributions to buy lavish houses and other assets — over Shawe’s objection. Now, Chancellor Bouchard not only ordered the company to be forced to be sold and auctioned off — a result unprecedented in U.S. history, but the madness that is Bouchard doesn’t stop there. He has also now ordered sanctions of $7.1 million dollars against Shawe, the man who built the company, in favor of Elting. I can’t say for sure, but my research indicates no other sanction levied against an individual has been this high in U.S. history. Included in this ungodly sum is $1.4 million dollars awarded in legal fees to Kevin Shannon (Elting’s lawyer) who was not even made to show his bills to prove it. The law only allows for “reasonable” fees? How can the “reasonableness” of Shannon’s fees be judged if they are hidden? The bottom line is that I believe that Chancellor Bouchard, according to my legal experts has ruled incorrectly in virtually every aspect of the case, he has overreached his judicial authority, and he has abandoned his duty and his ethics. Bouchard is guilty of perpetrating extreme bias against Phillip Shawe in favor of Elizabeth Elting. All this being said, I ask the following questions to my 6000 readers: 1) If a Delaware Judge violates his judicial authority and that of the judicial canons directing judicial ethics and behavior under the law, what do you think should happen to that judge? 2) If a Delaware judge blatantly exhibits bias in a case, prevents relevant evidence from being presented, is guilty of improprieties and cronyism, and denigrates the respect that the Court should maintain by his actions, should that judge remain on the bench? Here is what I do know: The Delaware business law is clear about what constitutes the forcing of the sale of a company by the Chancery Court. First, there must be evidence of irreparable harm. TransPerfect Global makes 500 million a year and is extremely profitable. The employees love and admire Phillip Shawe (as per affidavits), feel they have a stake in the company, and they do not want it to be sold. Where is the irreparable harm Chancellor? The law does not even permit you take control of 2 shareholder company unless it is facing irreparable harm, and folks, TransPerfect has 3 stockholders. This being said, it appears that Chancellor Bouchard has erred in his creative ruling, possibly costing thousands of people their jobs, creating the risk of Delaware’s corporate franchise being denigrated, and possibly costing Delaware millions of dollars. Chancellor Andre Bouchard is a personal friend and former business associate of Kevin Shannon of the law firm Potter Anderson (Elting’s Delaware attorney). They worked together 20 years ago on the famous Disney case in the Chancery Court, and have been buddies ever since. During the decision stage of the TransPerfect trial, Bouchard and Shannon made a public appearance together in New Orleans. None of this was ever disclosed by Bouchard. This case is a textbook example of the “appearance of an impropriety” and Bouchard should have recused himself long ago. This issue unto itself presents serious problems under the law. Heard enough? The coincidences just keep mounting against the new judge. Chancellor Bouchard has appointed a Custodian (with unlimited authority) to run the company named Robert Pincus, another friend and former associate. Pincus receives an on-going amount of $1400 an hour! He has unnecessarily hired expensive consultant friends, and together they’ve run up an $8 million tab — all paid for by TransPerfect – and the expenses mount daily. Additionally, Pincus has created a “reign of terror in the company,” threatening job termination for employees who would speak against the case, been given judicial authority to seize employee private cell phones and computer e-mails—on pain of sanctions or termination—all clear violations of the First and Fourth Amendments of the Constitution. One brave employee has filed suit against Bouchard and Pincus in US Federal Court. If he wins this case, I believe Bouchard will be culpable. In his July ruling on sanctions, Bouchard stated that Shawe had broken into Elting’s office, copied e-mails, destroyed his cell phone records, and lied under oath justifying the sanctions in the amount of $7.1 million dollars. The ruling paints an extremely negative portrait of Phillip Shawe, however the real story has been hidden and prevented from being presented as evidence in court by Chancellor Bouchard. The Employee Handbook (and New York and Delaware Law) clearly gave Shawe the right to investigate any suspicion of fraud or funds being illegitimately removed from the company by any person, including Elting.   Here is the official statement from Shawe’s attorneys, which was published in several media outlets:   

“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?TransPerfect Employees Fight For Their Company 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    

Should Chief Chancellor Andre Bouchard be impeached?

  Chief Chancellor Andre G. Bouchard and his court appointed custodian of TransPerfect Global, Inc, Robert Pincus are being sued in the United States Southern District Court of New York by a high level executive, Timothy Holland, who claims Bouchard and Pincus have violated his constitutional rights-specifically his 1stand 4th amendment rights. The right to free speech and the right to be secure in your papers and possessions are basic human rights that we Americans cherish and are fundamental to our freedoms as Citizens of the United States. When these rights are violated, there definitely could and should be civil and criminal consequences. Having investigated this TransPerfect case and written about it frequently, there are some very disturbing issues about Chancellor Bouchard’s actions that need to be examined in regard to his rulings. Let me be specific about what has occurred so far in relation to the established and legal DELAWARE JUDGES’ CODE OF JUDICIAL CONDUCT 2008 TABLE OF CONTENTS” : Under Canon 1: A judge should uphold the integrity, independence, and impartiality of the judiciary. Rule 1.1 Compliance with the law. Rule 1. 2 Promoting Confidence in the Judiciary. Rule 1.3 Avoiding abuse of the prestige of the Judicial office. Chancellor Bouchard from the legal opinions I have gleaned and from the Court records has not been in compliance with the law. The law clearly states that a company can only be sold by order of the Judge when disagreements occur in a company that has only 2 stockholders. TransPerfect has 3 stockholders. Bouchard in his order to sell this very profitable company is violating Delaware’s business law. If anything, Bouchard has put the prestige of his judicial office at risk. Nobody who is in business with a Delaware corporation right now feels any confidence in Delaware’s Judiciary. As to Canon 1, Bouchard has failed miserably and is suspect in my opinion. Under Canon 2A Judge should perform his duties of judicial office impartially, competently and diligently. Rule 2.1 Giving Precedence to the Duties of Judicial Office. Rule 2.2 With Impartiality and Fairness. Rule 2.3 Without Bias, Prejudice and Impropriety. Rule 2.4 With No External Influences on Judicial Conduct. Rule 2.5 With Competence, Diligence and Cooperation. Rule 2.6 Ensuring the Right of All Parties to be Heard. Chancellor Bouchard has in no way been fair or impartial without bias, prejudice and impropriety. If anything he has been the exact opposite. He has exhibited grotesque bias against Phillip Shawe in favor of the Plaintiff Elizabeth Elting. Bouchard has not allowed testimony to be presented or all parties to be heard in regard to Phillip Shaw’s position in this remarkable case. Bouchard’s former business relationship with Elting’s attorney Keven Shannon and appearing together with him on an educational panel in New Orlean’s reeks of impropriety. Indeed as to Canon 2, Chancellor Bouchard fails miserably and is suspect in my opinion. Canon 3 and Canon 4: A Judge should regulate extra judicial activities to minimize the risk of conflicts with judicial duties. Rule 3.1, A Judge should be careful with Extrajudicial activities in general. Rule 3.2 Avoid Appearances before Governmental Bodies and Consultation with Governmental Officials. Canon 4: A judge should refrain from political activity inappropriate to the judge’s judicial position. Again, Chancellor Bouchard appeared with the plaintiff’s attorney in a public forum during the decision stage of this trial. This attorney is an old buddy and business associate of Andre Bouchard. This is a violation of the Chancellor’s direction of avoiding improprieties. Bouchard appeared at Legislative Hall in Dover on May 18th, lobbying for a bill to do away with the Sussex County Register of Wills. This was a political action that violates his judicial direction and was totally inappropriate. As to Canon 3 and 4, Chancellor Bouchard has failed miserably and is suspect in my opinion. Back to the lawsuit against Bouchard in the UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK by TIMOTHY HOLLAND. Chancellor Bouchard appointed Robert Pincus as a Custodian to run the business and set up the sale of the company, costing the company approximately $8,000,0000 so far in audits and salaries-clearly lining the pockets of Bouchard’s cronies. Bouchard gave Pincus unlimited power in his duties, way beyond what would be normal in private industry. By order of Pincus, all the employees including the Plaintiff were forbidden to talk about the case with the threat of their jobs being terminated- a clear violation of the 1st amendment. Additionally many of the e-mails of the employees were searched, including cell phone records-a clear violation of their 4th amendment rights. Robert Pincus, as an agent of Bouchard’s Court and apparent direction as to how to proceed, with unlimited governmental powers, creates a definite cause for a constitutional alarm and concern over judicial impropriety in this controversial case. An objective observer (possibly a Delaware Legislator), taking into consideration Chancellor Bouchard’s seemingly controversial acts in regard to the official Delaware Code of Judicial Conduct, could be deeply concerned. Additionally, if it is proven in US District Court that Bouchard violated Timothy Holland’s civil rights, an objective observer (possibly a Delaware Legislator) might think all of these in combination would be grounds for Bouchard’s removal from the bench. It is possible to impeach a Delaware Judge by way of the legislature. It takes a majority of the House of Representatives and a 2/3 majority of the Senate to get it done. Perhaps it should be considered? We will see.        The lawsuit 1:16-cv-05936 When the TransPerfect employees began openly questioning the Chancery Court’s decision to forcibly sell a profitable company, Chancellor Andre Bouchard became enraged and asked his lawfirm buddy, former co-partner at Skaden Arps, his now appointed custodian Robert Pincus to excise the employees who were behind it. Bouchard appoints Pincus for many of these cases. On May 23, 2016, the very same date that Citizens’ release was published, written instructions were issued to all TransPerfect employees, including Plaintiff and many other TransPerfect employees working at TransPerfect’s offices in the City, County, State and Southern District of New York, stating as follows: 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.TIMOTHY HOLLAND v. ANDRE BOUCHARD & ROBERT PINCUS     The suit Robert Pincus threatened employees and is now waging a costly investigation to check emails and cell phones, to follow employees, in an effort to discover who is talking to the media and legislators. As a result, Timothy Holland waged a suit to maintain his rights.        

Holland v Bouchard Complaint by Charles Taylor on Scribd

 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  

I Won’t Stop Telling the Story of this Travesty

  Dear Friends, The TransPerfect Global case going on in Delaware’s Court of Chancery has become a huge controversy, and it is not going to go away. Chief Chancellor Andre Bouchard, has in the wake of innumerable appearances of impropriety, made an arbitrary and capricious decision– forcing the sale of an extremely profitable company (putting thousands of jobs at risk). I intend to exercise my first amendment rights on this issue until the legislature opens again in January 2017. The job of this Court is to administer Equity (Fairness). When there is the slightest possibility for fairness to not be properly administered, then something is wrong. This being said, why would anybody wish to incorporate in the State of Delaware, when the corporation could immediately and legally be at risk by potential Chancery Court action? Rhode Island and Nevada have competitive incentives for businesses to incorporate in their states. Delaware’s corporate franchise brings millions of dollars into its coffers. When the possibility of losing that long- standing income stream becomes apparent, then it is time for legislators to act to protect Delaware and its citizens. According to Harvard Business Services owner Rick Bell (one of the world’s top Delaware incorporators), incorporations were down by almost 2% in Delaware in 2016. Has anybody noticed that Delaware’s economy is not exactly booming? Senate Concurrent Resolution 91 Senate Concurrent Resolution 91 was proposed and introduced by Senator Colin Bonini (R) to open discussion, and evaluate ways to legally make Delaware’s Chancery Court better. I give Senator Bonini tremendous credit for recognizing the importance of opening this dialogue. Although this harmless and positive resolution was not voted on by the Senate as this legislative session has ended until next January– no doubt a huge message has been sent. Next year, when there is more time, hopefully it will be voted on with bipartisan support in both houses of the Delaware legislature. This has become a political issue now for the voters to consider when voting in future Delaware elections. Most of Delaware’s lawmakers are open-minded and willing to listen and I am hopeful that next year some changes in the mandate of the Chancery Court will be implemented. I have enclosed in the body of this email Senate Concurrent Resolution 91 for you to consider and evaluate. I think you will agree that it would be a positive step toward actual legislation. As always, your comments are welcome. Because the matter deals with a member of the court and a local politician (yes, a judge is a politician too), when it looked like the issue was getting some attention and even some traction, the powers that be sought to silence the protest. This is an important matter and it needs to be addressed in an objective way. How can a court ordering the sale of a functional and successful company because one owner wants more money than was initially agreed upon not impact other businesses that are incorporated or may incorporate in Delaware?   SENATE CONCURRENT RESOLUTION NO. 91   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      Delaware Legislature Must Act Dear Friends, On Friday, June 17, 2016, reporterJeff Mordock wrote an article in the Wilmington News Journal about the controversial TransPerfect Global case which is before the Delaware Court of Chancery (which I have been writing about), whereby Chief Chancellor Andre Bouchard, ordered the sale of this extremely profitable company, siding with the Plaintiff, Elizabeth Elting (who appears to be spiteful, vindictive, and acutely unreasonable, from the court documents and pleadings I have read) over defendant Phillip Shawe who appears to love his company, cares about his employees, and has led the company successfully through his brilliant creativity and hard work. Shawe does not want the company sold and Elting does. Shawe has offered Elting more than what her share is worth, however she only wants to hurt Shawe by refusing to negotiate in good faith.
Philip Shawe is the logical owner of TransPerfect

Sworn Testimony about Phil Shawe’s Devotion

The Chancellor in the wake of obvious cronyism and the appearance of personal improprieties has made an arbitrary and capricious ruling, although certainly within his legal right, which is clearly inequitable and does not represent the greater good. Although, reporter Mordock was somewhat thorough in his article, his reporting was typical drive by media reporting (sensationalizing the fact that Elting and Shawe once had an amorous relationship) while missing what is most important, the fact that the company is being forced to be sold and 4000 well- paying jobs could be lost. Murdock further misses the boat here in that the American dream is being dashed because one of the owners appears to be willing “to cut off her nose to spite her face,” with total disregard for her employees’ well-being. On the other hand Phillip Shawe wants to maintain the company that he created and nurtured to where it nets over $500 million dollars per year. The article mentioned the legislation sponsored by Senator Colin Bonini (R) in the Delaware Senate to prevent the sale of company’s like TransPerfect, however Mordock only interviewed the detractors and not the proponents portraying a negative bent on the whole issue. Although reporting on the real possibility that this decision in the Chancery Court could hurt Delaware’s profitable corporate franchise which brings in millions into its coffers if future entrepreneurs start incorporating in Nevada or Rhode Island instead of Delaware, Mordock has clearly missed the boat on the real essence of this important issue. Intentional Disregard or Collusion? This brings me to the disappointment I have in Senate Minority Leader, Gary Simpson (R), and House Minority Leader Dan Short(R) who oppose the legislation. I am surprised that they don’t get it. In the News Journal article Mordock quotes Simpson who says, “He hasn’t received any e-mails about it”. Hello Senator-you are on my vast e-mail list and have received e-mails about it. Simpson further states, “We have a reputation in Delaware for having a Chancery Court where litigants and their attorneys know how Delaware law reads. To give uncertainty because a party may be able to persuade the Delaware Legislature to change things is just bad.” I vehemently disagree. Regardless of this reputation, when something is wrong, it’s wrong and if it is wrong, it needs to be changed. Delaware’s Chancery Court reputation and corporate franchise situation will be tainted by Chancellor Bouchard’s ruling and the law needs to be corrected to prevent this kind of hard core decision from being implemented. Likewise, Representative Dan Short is quoted by Mordock as saying, “ The company’s dysfunction is the result of its own lack of corporate governance to resolve a bitter dispute between its leaders. The Chancery Court is using the tools available to it under Delaware law to untangle a knot TransPerfect tied for itself.” Again I disagree whole heartedly. Who said the court is responsible for untying a knot it never made. If Ms. Elting is unhappy there was nothing to stop her from selling her shares on the open market and there is still nothing stopping her today. Instead, it appears she consciously manufactured deadlock to use the court in an attempt to get a higher price than the market is willing to pay. The law needs to be changed to prevent a litigant from using false and questionable evidence to manipulate the court. The judge in New York threw out her case; why didn’t Bouchard? Who clearly benefits by not settling? Certainly not Phillip Shawe! The Truth that Media is Missing The company is not dysfunctional, and although there was no agreement in place between the two owners to resolve disputes, there are more reasonable options available to the Court in lieu of selling a very well working company. Just because the Chancellor has the authority “to kill the goose that laid the golden egg”, doesn’t mean he has to do it. Elting is using the court and Bouchard has either fallen for it or is subconsciously working to help his buddies involved (the law firm, the custodian who spends $5 million each year of TransPerfect money, etc.) The proposed law change makes sense. The problem here is, even though I respect Gary Simpson and Dan Short and consider them friends, they appear to have become “Establishment Politicians”. The entire Delaware Legislature should go to school on the amazing phenomenon of Donald Trump ( a bombastic, politically incorrect egocentric) and Bernie Sanders (a passionate Socialist) who both are resonating with millions of voters. People are hurting and they are sick of the “Status Quo” of the “Political Establishment” on both sides of the isle. Delaware is not exactly booming with a great economy or positive economic growth. This Chancery Court ruling by Andre Bouchard and rulings like it will only tend to hurt the State of Delaware economically. The law needs to be changed in this legislative session and there is a realistic bill on the table to do so. Delaware voters are watching and they are very frustrated. The election is coming up in November. As always your comments are welcome and subject to being forwarded. Respectfully submitted, Judson Bennett-Coastal Network    Rick Bell of Harvard Business Services Speaks Dear Friends, I received this e-mail from Rick Bell in response to the TransPerfect articleabout Chancellor Bouchard’s controversial ruling. Rick Bell, a former Lt Governor candidate, is Delaware’s foremost specialist on forming Delaware corporations worldwide. Rick also tells me that incorporations in Delaware are down 1.5 % and new business growth is way off. Bouchard’s actions will definitely hurt Delaware’s credibility. Below Rick Bell’s message is a News Journal article by Jeff Mordock. Please become aware of this disaster in the making by reading these articles. Call your state legislators and let them know how you feel. Harvard Business Services Harvard Business Services, Inc. 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?   

“What’s going on in Delaware”

  This is my 4th article in a series spotlighting the recent practices and apparent bias in one of the Delaware Chancery Court Cases which has gleaned significant public attention. In my last article in this series I focused on the Elting v. Shawe case involving the company Transperfect, a translation company with 4,000 employees and 90 offices throughout the world. For those of you who might be just joining this series, this is a case involving the highly-connected Democratic activist Andre Bouchard who was appointed Chief Chancellor of the Chancery Court although he never served a day on the bench. His appointment by Governor Markell was never questioned and in my first article I pointed out how Bouchard seemed to be part of the rampant cronyism widespread in the Delaware Court System. If there was ever a reason to question these type of practices and the harm they can cause to the people of Delaware, the Transperfect case is a shining example. You may recognize this case by now from my previous missives: This is the one where Chancellor Bouchard in one of his very first cases appointed a custodian to oversee an auction of this quite profitable company. What makes this unique is that Chancellor Bouchard’s decision was unprecedented in the history of Delaware and its implications can have a chilling effect on the future of Delaware as the corporate capital of the United States. The people of Delaware have every reason to be concerned as 14 percent of all jobs in Delaware are created as a result of this franchise and this decision has raised eyebrows up and down the legislative hallways. However, this decision has more immediate repercussions to the 4,000 employees of TransPerfect who have started a committee to amend statute 226…. to prevent this type of unprecedented judicial activism that has a good chance of leading to the loss of many jobs and possibly lead to the demise of this company which has never failed to have a profitable year in its 24-year history. The aspects of this case are quite fascinating. After reading many of the motions and testimony in this dispute what made it so unusual was not only was it the first decision of it’s kind coming from a freshman jurist but that there was an obvious prejudice by Judge Bouchard who completely ignored the overwhelming evidence presented by Defendant Shawe that indicated many questionable irregularities by the plaintiff. Ten witnesses testified on behalf of Mr. Shawe while Ms. Elting presented none. This prejudice amplified when the judge refused to allow communications on company emaiIs between Elting and her husband Michael Burlandt, the company real estate broker, to be presented in court showing further evidence of a nefarious scheme to debunk the status quo of TransPerfect to the detriment of its founder Phil Shawe. If the ruling by Chancellor Bouchard to auction a profitable company (which makes over $500 million dollars a year) and forcibly take it away from it’s visionary founder Phil Shawe wasn’t strange enough, then how do you explain such a ruling that appeared to be based entirely on Elting’s questionable testimony? Shawe, on the other hand, was not allowed to present relevant and beneficial evidence to make his case. Furthermore, much evidence that was presented by Shawe which put Elting in a very bad light, was completely ignored by Chancellor Bouchard. Apparently Ms. Elting tried to remove Mr. Shawe as CEO in a New York State Court prior to coming down to Delaware, where the judge summarily threw her case out not in small part due to the fact that 110 employees submitted affidavits on behalf of Mr. Shawe. As in the Delaware case Ms. Elting presented none, yet Chancellor Bouchard apparently didn’t care. The appearance of improprieties and substantial court bias throughout this whole case are outrageous, and any logical observer could ascertain grounds for an appeal. Regardless of the negative effect this arbitrary and capricious ruling could have onDelaware’s lucrative corporate bonanza, any logical person who has followed the case as I have, can clearly recognize that fairness and justice have not been adjudicated. There is much more to talk about, so more articles are coming. As always my opinions are open for discussion and your comments are welcome. New York Times Agrees that Delaware Chancery Has Too Much Power Always on Delaware’s Side Respectfully submitted, JUDSON Bennett-Coastal Network Getting along? Getting Along?    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, TransPerfect is performing "exceptionally 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
  1. Is the Company definitely being sold and, if yes, when?
    1. The Delaware Court of Chancery ruled that the Company should be sold, and the Court is expected to make a determination about a sales process in the near future; however, the Court’s decisions will be subject to appeal, so there are no definitive answers to these questions at this time.
  2. I heard that the Company could potentially be “dissolved”—is that true?
    1. No—at least not in the conventional sense. While the Company’s ownership structure may change, the Company is expected to continue with business as usual. That is the best path to future value creation, and the Court has clearly indicated its intentions along those lines.
  3. Is any of this likely to impact the Company’s day-to-day business?
    1. No! A third director has been appointed by the Delaware Court of Chancery to help resolve any disagreements between the Company’s shareholders and to facilitate the continuation of TPG’s strong growth and success. A final resolution of the dispute between the shareholders will only help the Company. In the meantime, it is important that we all remain focused on serving the needs of our customers.
There you have it folks, your comments are welcome. Respectfully Submitted, JUDSON Bennett-Coastal Network Should Chancellor Bouchard Mandate a Sale of TransPerfect or Allow Parties to Settle? Top of Form Bottom of Form See results without voting Elting and Shawe Both Made Offers Shawe Offered $300M and Elting said she would Pay Shawe More | Source Important Stories to Sum up TransPerfect Case  

Typically in corporate legal disputes, mergers, acquisitions or sales, the company’s employees are like the children of divorce: severely affected but little heard from. Well, amidst a contentious corporate battle going on in a Delaware courtroom, the employees of TransPerfect Translations are demanding that their voice be heard and taken into consideration

      One April 26, the employees of the New York-based translation services company sent two letters to Delaware Chief Chancellor Andre G. 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. And to inform the public of their situation, a group called 610 Employees of TransPerfect Globally ran radio ads on local Delaware stations and placed a two-page advertisement in the Delaware News Journal that reprinted the contents of each letter 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. The case revolves around Elizabeth Elting, the co-chief executive officer of TransPerfect, who is suing the other co-CEO, Philip Shawe. Elting claims the two can’t work together anymore and that the company is unable to operate because of their dysfunction. Elting wants out of the private company she co-created and has co-owned with Shawe for the past 24 years. In 2013, TransPerfect became the third-largest translation services company in the world, the second largest in the U.S. and the largest privately held company in the $35 billion translation services industry. The firm has more than 4,000 employees in 100 cities on four continents. These experts translate more than 170 languages for a high-profile client list that includes USPS, IKEA, Johnson & Johnson, and Hilton Worldwide.   Shawe offered to buy her out and pay for her share of the company, which shockingly has no debt. However, Elting doesn’t believe she’s getting a fair offer for the company that last year posted revenues of $500 million and a profit of $80 million.   In order to get a what she considers a fair market price, Elting wants the company sold to the highest bidder. Unable to find a judge receptive to her case in New York state, she filed the lawsuit in Delaware, where the non-jury trial is now being decided by Bouchard.   Both sides in the case have rested and in October Bouchard issued a preliminary ruling in which he appointed a custodian to create an exit strategy for Elting that will get her the most money. The strategy consists of selling the company against Shawe’s wishes.   This means that for the first time in U.S. history, a private, profitable, and highly-successful company that has not been accused of any wrongdoing or impropriety is being taken over by the government. The judge is placing a middleman in charge of the situation for the purpose of dissolving the company and having it force-sold against the wishes of two out of three shareholders. Elting owns half, while Shawe and his mother own the other 50%. It also appears to be against the wishes of the employees who fear losing their well-paying jobs in a niche industry. 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.   This case could have far-reaching repercussions for companies throughout the U.S. Bouchard’s actions have found little support and have actually drawn fire across the country. The Chancellor’s toughest and most notable critic to date has been former New York City Mayor Rudolph Giuliani. Giuliani, who also served as U.S. Attorney for the Southern District of New York, called Bouchard’s ruling an “un-American” decision, offering the notion that more time should be granted before the draconian “dissolution” and “force sale” decision becomes final.   With more than 850 jobs in New York, 2,300 jobs in the U.S. and 4,000 worldwide at stake, the world is watching and waiting for Bouchard to make his next move.        Chief Chancellor Excuses Potential Fraud and Could Force a Sale of a Viable Multi-million Dollar Company? Delaware’s rookie Chief Chancellor, Andre Bouchard, is casting a dark shadow over his 2-year run as the Chief Chancery Court Judge. This was evident in one of his most recent decisions where he ignored overwhelming evidence and a pattern of behavior that I wonder could border on the illegitimate? Instead, he chose to rule in favor of a single party (Elizabeth Elting) who happened to be represented by his buddy Kevin Shannon. This culminated in a decision that has the potential to ruin a company and destroy the jobs and careers of 4,000 hardworking employees worldwide, 2,300 of them in the United States, nearly 1,000 in the northeast, and set a chilling precedent that could destroy Delaware’s longstanding reputation as the capital of corporate America. Chancellor Andre BouchardBouchard 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

Open Letter to Chancellor Andrew 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  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