The Delaware Supreme Court upheld the sale of TransPerfect to co-founder Philip Shawe and defended Chancellor Andre Bouchard’s actions in the contentious case.
“The Chancellor rose above the unjustified personal attacks on his integrity, and patiently and thoroughly addressed each issue raised in this bitter dispute, including Elizabeth Elting’s objections to approval of the Sale Agreement,” the one-page decision stated. The ruling came with no dissents from justices on the high court.
Shawe and Elting, a former couple with a 50-50 stake in the translation services company based in New York City, became deadlocked over control of the company.
That led Bouchard to appoint a custodian who recommended a sale to Shawe. Along the way, Chancery Court tangled with both Shawe and Elting.
By all appearances, Elting supported the court-ordered bidding process for her stake until Shawe emerged as the successful bidder.
Along the way, a group of TransPerfect employees sought legislation in Delaware that would require a three-year cooling off period for deadlocked sales disputes that are rare but not unheard of.
The bill found a sponsor in State Sen. Colin Bonini, R-Dover, a former candidate for governor.
The group was criticized by the state’s legal and business community for advertisements placed in other states that questioned the status of the state’s corporate law system. Delaware battles with states like Nevada for fees that come with companies domiciling in the state.
Chancery Court ends up with cases from companies, like TransPerfect, by virtue of their Delaware incorporation.
Shawe issued the following statement following the release of the Supreme Court decision.
“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. However, at this time, I simply want to thank the TransPerfect staff; it is our team who deserves profuse praise for driving the company’s unparalleled performance. To everyone who pulled together to make the dream of TransPerfect into a reality over the past 25 years should know this: We will continue to grow, to innovate, and to lead the market — further, we will continue to do so as a team, and always with our clients’ best interests at heart.”
The deal has Shawe buying out Elting’s interest for less than $400 million in cash.
The price, when combined with the value of Shawe’s stake, was higher than the figure for translation services company Lionbridge by private equity firm H.I.G. H.I.G. was believed to have been a bidder for TransPerfect. That led to fears among TransPerfect staff of a downsizing of jobs at TransPerfect.
