Bar Association defends Chancellor McCormick after longtime critic launches $2 million ad campaign

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Citizens for Judicial Fairness released TV and social media advertisements entitled – “Delaware Fat Cats,” leading to a spirited defense of Chancellor Kathaleen McCormick.

The advertisement is part of a $2 million campaign on broadcast, cable, streaming, and social media. It draws attention to lawyers seeking $1 billion for their work in the $56 billion Elon Musk pay case. A TV ad has aired in Philadelphia media markets.

In an interview with the New York Post, TransPerfect founder Philip Shawe said the campaign was designed to highlight what he views as a cozy relationship between McCormick and corporate lawyers.

The TV ad highlights Delaware McCormick’s ruling in the landmark Elon Musk-Tesla pay case. The chancellor has yet to issue a ruling.

McCormick earlier ruled that the Tesla board comprised directors with interlocking relationships with Musk and granted a pay package tens of times higher than compensation for any CEO of a publicly traded company.

Musk has moved the incorporation of at least one of his companies to Nevada and says Tesla will become incorporated in Texas. Critics of the ruling have claimed the state will lose incorporation revenue due to the ruling. Others say the cost of handling Musk’s frequent trips to Chancery offset those losses.

Settlements like the one in the Musk case result in payments to attorneys who filed shareholder suits with $1 billion, a possible but unlikely dollar amount. Costs of taking the case are believed to be in the tens of millions of dollars for the plaintiff’s lawyers

A release stated that the advertisement highlights Shawe’s concerns about McCormick’s potential tolerance for bias and corruption, considering her working relationship with attorneys on cases that she oversees.

McCormick is not allowed to comment on the allegations under judicial rules. However, the State Bar Association rose to McCormick’s defense, claiming the campaign is one more effort at bullying by Shawe.

In the past few days, you may have seen on TV or online what can only be described as an attack ad against Delaware’s Chancellor McCormick and the Delaware judiciary as a whole. The ad is being paid for by disgruntled litigant Phil Shawe through a company he now admits he formed just for the purpose of such attacks. Unfortunately, Mr. Shawe claims that he will waste another $2 million on an ad campaign pushing more of the same.

But make no mistake: Mr. Shawe speaks only for himself. And this is not the first time he has attacked. If you have seen this most recent ad, you will recognize it as a continuation of his bullying and harassing tactics.

Chancellor McCormick is guilty of nothing other than doing her job, and doing it well. Delaware’s judiciary is recognized, year after year, as the finest in the nation. And each year the number of businesses choosing Delaware as their corporate home has increased, due in no small part to the well-deserved reputation of the Delaware judiciary.

Judges are bound by their ethical obligations not to comment on matters pending before them, and Mr. Shawe knows it. But the Delaware Bar need not, has not, and will not stand by silently while the Delaware judiciary is attacked. You can read our responses to Mr. Shawe’s prior attacks, and learn the facts of his litigation, at this link: https://www.dsba.org/tp/

Shawe prevailed in the battle over control of TransPerfect, a translation services company. The case landed in Chancery when the company’s 50-50 owners, who were once engaged, could no longer work together.

Shawe has continued contesting fees since Chancery appointed a custodian during the sale process.

Shawe moved TransPerfect’s incorporation to Nevada, with critics claiming he bankrolled Citizens for Judicial Fairness. The group’s source of funds has not been disclosed.

Citizens has also pushed for a Black member of the Chancery Court and more diversity in Delaware’s judicial system.