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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

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   

A CONCERNED DELAWARE ATTORNEY

Dear Friends, I received this amazing e-mail below from a prominent Delaware attorney who has chosen to be a “whistle blower” of sorts in regard to Delaware’s Chief Chancellor, Andre Bouchard, specifically as to the inequities of the TransPerfect case of which I have been recently writing about. At the request of this person I have removed his name, as he fears retribution from the court that could affect his livelihood. Maintaining my journalistic integrity, I am bound to honor his request to remain anonymous. I will call him from now on “A CONCERNED DELAWARE ATTORNEY.” Regardless, I assure you of the legitimacy of this person and his production of the facts from his years of legal practice. The importance I feel in publishing it to all who are interested is paramount. Delaware’s credibility in regard to it’s future as America’s corporate capital is at stake. Please read below and as always your comments are welcome. You will be amazed at this legal analysis by an objective expert.  

The Implications of the TransPerfect Forced Sale

Dear Judson: I have been following your articles regarding Chancellor Bouchard and the TransPerfect case. The issues you discuss are indicative of underlying and systemic problems in the Delaware Chancery Court. I have talked to more than a few attorneys who agree the result in the TransPerfect matter is an astonishing travesty of justice. I have read the hearings and trial transcripts, studied the decision, and have come to the inescapable conclusion that the fundamental principles that have long been the back bone of Delaware Corporate law were not properly utilized in the TransPerfect case. It is clear the Chancellor had a personal bias against Shawe or for Elting, and from then on, all his interim decisions were on auto-pilot, favoring Elting. Attorneys I’ve spoken with are split as to whether the root cause is Chancellor’s lack of experience or the more troubling reasons you suggest in your articles. Whatever the cause, these attorneys, as am I are now afraid of publicly stating their true belief’s about the Judge’s decision. Why? Because they wish to continue to practice successfully in Delaware and fear retribution from the Chancery Court, where Chancellor Bouchard will be sitting for the next 12 years. No attorney wants to be worried about being blacklisted by the Court that they do business in because they were candid about their legitimate concerns involving the TransPerfect case. Though your article was quite thorough there are a few additional points that your readers might find very interesting. I have begun to list the many issues with Bouchard’s decision below, which have the potential to set a disastrous precedent in the Chancery Court, and in turn, Corporate America.  

TransPerfect has 3 Shareholders, Not Two

  1. THE COMPANY IS NOT 50%/50%
The company is 50%-49%-1%. Why is this important? Because Bouchard is using a history of voting patterns (rather than true ownership) to invoke Section 273 principles which the legislature has made clear should only apply in a two shareholder situations.TransPerfect has three shareholders, but because Shirley Shawe is Philip Shawe’s mother Bouchard is saying that because they vote together, he can treat them as the same shareholder. This is a reckless and dangerous precedent to set, and a formula for a vast increase in litigation by stockholders who will view the Chancery Court’s broad equitable powers as a way to get a better deal than what they negotiated for in their shareholder agreement. Simple example: Huge investing groups vote the same on Board and Shareholder decisions all the time. In applying new law Bouchard proposes to create to a scenario where there are, hypothetically, four hedge funds that each have shares in a profitable company with 10%, 17%, 33%, 40%, stakes respectively and litigation is commenced between the shareholders, there would be a strong likelihood of a disastrous and inequitable result. If the 10% shareholder and the 40% shareholder have always voted in a consistent pattern then, for purposes of dissolution, the Court (i.e. the government) could seize control of a profitable private company, with capable management, and auction it off to the highest bidder.

Unprecedented Ruling by Bouchard

What Bouchard’s unprecedented ruling in the TransPerfect case does is turn Delaware’s law (and reputation) on its head creating substantial uncertainty for the corporate world which looks to Delaware for stability and predictability. It is telling that if TransPerfect had been an LLC (rather than a corporation), it would have been beyond Bouchard’s power to dissolve it as long as it could continue to fulfill its purpose.
  1. DELAWARE DIRECTORS MAY NO LONGER HAVE RIGHTS TO BOOKS & RECORDS
It is undisputed that Elting took $21 million in unilateral unauthorized distributions (the word for dividends in an S-Corp), that she claims she was justified because it was for her individual taxes. Bouchard whitewashed this conversion of funds, as well as Elting’s subsequent raiding of the company coffers to pay her personal lawyers and advisors (Kramer Levin Naftalis & Frankel and Kidron Advisors). Once familiar with the facts, even the Chancellor’s hand picked Custodian would not condone such avaricious behavior and forced Elting to repay the absconded funds. When Shawe entered Elting’s office to investigate the unauthorized distributions, as Delaware law requires him to do as a Director and Officer when suspecting fraud, he was with a professional Fraud Examiner while doing so. Yet, the court was deceived into ruling that Ms. Elting’s company-owned office was somehow her private personal property. Shawe had every right (and duty) to examine her emails stored on the company equipment and enter her company for an investigation, once he suspected fraud. Now, he faces unwarranted sanctions for doing so. Additionally, these emails contain information which would have exonerated Shawe. Yet, the Chancellor improperly refused to allow them into evidence. Instead of reviewing the emails in camera, the proper course for a judge when fraud is alleged, Bouchard is now threatening to sanction Shawe by paying millions of dollars in Elting’s legal fees. This is another disastrous precedent Bouchard has hoisted upon the Chancery Court. Can anyone imagine a world in which a Director or Officer (in this case Elting), empowered by the Company Handbook, cannot be investigated for fraud if suspected by her Co-Directors and Officers—for fear of an unwarranted multi-million sanction? This aspect of Bouchard reasoning alone is spine-chilling, impractical, and defies logic. III. PUNITIVE SANCTIONS Bouchard has stated he believes it is within his powers to sanction Shawe punitively for the full amount of legal fees Elting has run up in the case—even for causes of action that Elting dropped at trial. Therefore, he contemplates having Shawe reimburse Kevin Shannon (Potter Anderson) for bringing baseless claims and causes of action that could not be proved at trial. I cannot think of a precedent that would encourage more frivolous litigation. The more claims Elting brings that she can’t prove, the more it costs Shawe in reimbursing Kevin Shannon and Potter Anderson. One might argue that Bouchard was being fair because he sanctioned Kramer Levin$135,000 for failing to answer deposition questions. However, this argument is a red herring. From the public record, the deposition testimony of Ronald Greenberg of Kramer Levin is plainly critical to proving Shawe’s claim that deadlocks were manufactured and that in a well thought out plan he masterminded a scheme to use dissolution as a vehicle to maximize Elting’s exit value. What Shawe needed was an order that Elting’s attorney answer the questions. Instead the court sanctioned them $135,000 for the cost of the deposition and shielded Greenberg from ever having to answer the questions. I’m sure Shawe would have preferred to soak up the cost to expose the Elting’s fraud, but Bouchard forestalled this line of inquiry. This hollow gift from Bouchard to Shawe, appears calculated to allow Bouchard to appear even-handed, while doling out his pre-ordained sanction on Shawe. Judson, I could keep going and going, helping you analyze the obvious travesty of justice, destruction to Delaware’s reputation, and the detrimental effect that Chancellor Bouchard’s decision has had all the stakeholders of this thriving business (except Ms. Elting and Kevin Shannon). And I have not even reached the most shocking material—including Bouchard’s new definition of the 226 “irreparable harm to the business” standard that he used to empower himself to takeover TransPerfect. However, as I close PART #1, I just want you to know one thing: There are many attorneys and members of the Bar in Delaware who feel the same way that you do, and want to see this company left alone from Bouchard’s bias, activism, and judicial overreach, but are too afraid to sacrifice the next 12 years of their career to speak out against him. Thank you, Judson, for having the courage to say what others will not, and for your journalistic integrity. A Concerned Delaware Attorney Respectfully submitted Respectfully Submitted, JUDSON Bennett-Coastal Network     Source: http://hubpages.com/business/Shocking-Legal-Analysis-of-the-TransPerfect-Case    What is the Court of Equity in Delaware? Dear Friends, The Delaware Court of Chancery is supposed to be Delaware’s Equity Court. What is the definition of the word “Equity”? Equity is defined by Webster’s dictionary as “ the quality of being fair and impartial.” When there is a corporate dispute, involving a Delaware corporation, the Delaware Court of Chancery decides the case. The decision is supposed to be based on objective fairness involving reasonable decisions based on the evidence provided. All relevant evidence should be objectively considered. If it is not, then there is something radically wrong. So how does TransPerfect Fit in? This brings me to the TransPerfect Global case of which I have been writing aboutwhere there are obvious improprieties involving a questionable decision. Let’s put everything in a very simple perspective. The company is a translation company that nets over $500 million dollars per year. It employs about 4000 people. It has 90 offices world- wide. It is a Delaware Corporation. There are two equal owners who were once lovers. The owners Elizabeth Elting and Phil Shawe are at odds and do not get along. Now, the case: Elizabeth Elting (who vindictively) wants the company to be sold and Phil Shawe (who loves his company and cares about his employees) does not. Shawe has offered Elting 300 million dollars for her share which is more than she would get at a public action. If the company is sold, there is a good chance that many of the 4000 employees would lose their jobs. The presiding Judge is the Chief Chancellor named Andre Bouchard. Elizabeth Elting who brought the complaint before the court refuses to make a counter offer or agree to any reasonable negotiations out of what appears to be pure spite. It certainly looks as if she wants the company to go to public auction just to hurt Shawe. Chancellor Bouchard has ordered a temporary custodian (one of his buddies) to run the company during the interim. Elting’s attorney Kevin Shannon is a friend of the Chancellor and they appeared on a legal panel together in New Orleans while in the heart of this lawsuit. This custodian has threatened employees with job terminationthrough inter office directives not to discuss the case. Millions of dollars have been unnecessarily spent with this custodian at the helm (<$5 mIllion) usurping Shawe’s successful leadership which has been clearly proven by the company’s financial success over the years and by the testimony of many employees. There was no testimony on behalf of Elting. Evidence indicating some irregularities by Elting has not been allowed to be presented. Other substantial evidence on behalf of Shawe has been ignored. Granted, under normal circumstances, when two owners of a company cannot agree and there is no written agreement in place (which there isn’t), then the assets have to be sold or one partner buys out the other? However in this case, you have one partner who is willing to buy out the other for more than what her share is worth. Let me mention one more fact. Elting lied in a recent Forbes piece where she stated that in response to Shawe’s offer she told the custodian that she would offer more. It is a lie, and she is not offering to buy, nor is she willing to sell to Shawe. This is the key fact Bouchard ignores. He can force the mediation by telling the parties he will install a third board member to break any tie and then leave the case alone. The Questions Not Being Asked Therefore I ask the following questions:
  1. Why does Chancellor Bouchard not order Elting to settle or become a silent partner?
  2. Why would he order the sale of a viable company possibly costing thousands of employees their jobs?
  3. That being the case, why would someone want to incorporate in Delaware when this is the possible result?
I am a writer who has an interest in many things. I love to expose inequities when they are obvious. Having followed this case very carefully, there is no doubt in my mind that there have been suspicious irregularities in the way this case has been handled. There is certainly the appearance of improprieties. There has been no objective fairness, impartiality, or reasonable consideration which is the duty of this court. Elting’s lawyers even bragged about how this judge awarded everything to Elting and ignored Shawe, saying they felt it was not usual. There is certainly grounds for appeal to Delaware’s Supreme Court if this case is not equitably resolved. What a shame to have a successful business decimated because of a personal vendetta by one of the partners apparently supported for whatever reason by the Chief Chancellor. I hope justice prevails and TransPerfect remains intact as a shining example of the success of an American dream. These success stories are few and far between these days. Always on Delaware’s Side As always your comments are welcome and subject to being forwarded. Respectfully Submitted, JUDSON Bennett-Coastal Network   

“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?  

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.