Delaware Chancellor Andre Bouchard has ordered mediation following a flurry of litigation over control of TransPerfect, a translation and business services company based in New York City.
Bouchard appointed retired Chancellor William B. Chandler III as the mediator, Law360 (subscription required( reported. Bouchard had earlier appointed a receiver to move a company sale forward.
Chandler is an attorney for Wilson Sonsini Goodrich & Rosati Wilmington.
That appointment of the receiver has led to allegations of excessive pay for the trustees and claims that the rights of TrnasPefect employees to speak out on the sale were being muzzled.
The dispute has centered over a deadlock between co-founders and estranged couple Phil Shawe and Elizabeth Elting. Despite ending their relationship years ago, both served as co-executives for several years until their business relationship deteriorated.
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To this day, releases are sent out that report on the success of the company and quote both Elting and Phil Shawe. The releases are unusual since the TransPerfect is not a public company.
A wrinkle in the case has been the role of Shawe’s mother Shirley Shawe, who has proposed a 51 percent solution that would cede her one percent share of the company to Elting.
Elting has rejected that proposal, with her lawyers seeking sanctions against Shirley Shawe and claiming the move is a maneuver by the Shawes and comes with conditions.
According to the Law 360 story, Bouchard in noted in a Friday hearing that a dozen suits have been filed.
The dispute has also spilled over into the Delaware General Assembly, with a group known as Citizens for a Pro –Business Delaware seeking legislation that would allow for a three-year cooling off period.
The group has also released ads that claim the dispute is a threat to Delaware’s status as a an incorporation center. That move earned criticism within Delaware when plans were announced to air ads in states that would like a piece of the First State’s incorporation and business court market.
Citizens says it represents employees of TransPerfect who fear that a forced sale at a premium price would lead to job cuts.
Phil Shawe issued the following statement on the decision:
“As I have said from the beginning of the case, a consensual resolution is also the value maximizing solution for all shareholders, especially in the case of a people business like TransPerfect. I have made several bona fide offers to settle this and will continue trying. Any step taken toward facilitating an out of court settlement is a step in the right direction.”
Chris Coffey, spokesman for Citizens for a Pro-Business Delaware offered the following:
“We are very encouraged by Judge Bouchard, ordering mediation. There is a proposal on the books to keep this company together, and this could be a major first step towards achieving it. But our bill is bigger than any one case, and we are as confident as ever that we can get this bill to the floor this month, and win.”
