Good afternoon everyone,
Before departing the bench at the end of April, Delaware Chancellor Andre Bouchard added some extra toppings of observations regarding TransPerfect and its owner Phil Shawe.
First, a little background before we get to the main course.
After years of jointly running TransPerfect, Shawe and co-founder and ex-fiancé Elizabeth Elting had enough. Both had 50-50 stakes and no buy-sell agreement. The dispute ended up in Chancery Court – by most accounts the nation’s leading state business court.
Along the way, tens of millions and by one estimate, a quarter of a billion dollars were spent on litigation costs.
Robert Pincus, a now-retired partner at Skadden-Arps, was appointed custodian to handle the messy dispute over who would own the thriving translation services company.
…an unduly lengthy opinion — necessitated by having to clean up the extra-large, deep-dish pie with lots of toppings thrown against the wall – Andre Bouchard
After mediation failed, Pincus took an active role in the sale of the company, recommending that Shawe buy out Elting’s 50 percent stake.
Bouchard agreed with Pincus on the sale recommendation, but Shawe wasn’t going away quietly. The battle with Pincus has continued over fees paid to the custodian and a lack of detailed billing.
All of this was punctuated by personal attacks on the chancellor, which he did not mention in the ruling. At one point, the State Bar Association felt compelled to defend Bouchard at a press event.
Shawe and TransPerfect made a big deal of Bouchard at one time serving as an attorney for Skadden Arps. The ties aren’t exactly direct. Before becoming Chancellor, Bouchard left Skadden and formed a small law firm.
In a final Chancery ruling, which ran 138 pages, Bouchard mentioned the “pizza principle,” used by his predecessor Leo Strine to describe frivolous arguments.
This is not to be confused with the economic theory that the price of a slice of pizza is equivalent to a New York City subway fare.
Strine, known for wittily written opinions, at one point noted that cleaning up pizza thrown up against the wall was much harder than throwing the pie.
Bouchard ran with the pizza principle and added his own touches.
“In this unduly lengthy opinion — necessitated by having to clean up the “extra-large, deep-dish pie with lots of toppings thrown against the wall —the court grants the custodian’s fee petitions in the amount of $3,242,251.
The ruling is worth at least a quick read as it chronicles the mind-numbing scope of the litigation.
Bouchard also takes note of Citizens for a Pro-Business Delaware, a group comprised of TransPerfect employees that have been critical of Bouchard and the Delaware legal system.
It has been hard to escape their marketing/advertising strategy that included targeting Gov. John Carney’s re-election effort through a Political Action Committee and bringing in the Rev. Al Sharpton to criticize what the group argues is a lack of diversity in the judiciary.
At one point, the group placed ads out of state, claiming that Delaware was a bad place for business.
For their part, Shawe and TransPerfect did not comment on the pizza analogy but instead announced they gained a 15 percent reduction in fees paid to Pincus.
Meanwhile, Citizens for a Pro-Business Delaware aimed at corporate attorney Lori Will, who was nominated for the post of vice-chancellor, pointing to her stint as an associate at Skadden. Like Bouchard, she moved to another firm before the nomination.
Succeeding Bouchard is Vice Chancellor Kathaleen McCormick. Delaware’s corporate legal community has widely praised both McCormick and Will,
Enjoy your evening. This newsletter returns tomorrow. – Doug Rainey, chief content officer.