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Updated on December 9, 2016

The real story of TransPerfect

In researching and writing about the TransPerfect Global case, which was adjudicated in the Delaware Court of Chancery by Chancellor Andre Bouchard, I shake my head in amazement every time I think about it. Frankly, it boggles my mind because the rulings are so biased, unfair, unprecedented, and so reeking of improprieties that any reasonable man can conjure up all kinds of conspiracy theories.

Here are some facts:

  1. Elizabeth Elting and Philip Shawe, former lovers, founded TransPerfect when they were graduate students at NYU. The company built on the back of co-founder Philip Shawe’s hard work is now one of the world’s leading translation companies, grossing over $500 million per year. The stock ownership is owned as following, Elizabeth Elting owns 50%, Philip Shawe owns 49%, and Shirley Shawe ( Philip Shawe’s mother) owns 1%.
  2. The company has over 4,000 employees with high paying jobs and is incorporated in Delaware.
  3. Elting will not accept any reasonable offers to be bought out. She wants the company to go to public auction because she doesn’t want Shawe to have any part of the company. Since the staff understands that Shawe is the reason this company is so successful and that Elting has had a minor role in its success in recent years, there is much support for his position. Shawe does not want the company sold and wants to keep the company operating and save the jobs of the employees. Despite the owners’ differences, TransPerfect continues to operate successfully showing increasing profits year after year.
  4. Elting, despite having no witnesses to support her claim, sues Shawe in the Delaware Court of Chancery and wins in an unprecedented, one sided, clearly biased ruling by Chancellor Bouchard, who not only ruled in favor of Elting and her attorneys, who he has a personal relationship with, but then sanctioned Shawe to the tune of $7.1 million dollars after negative press came out about the Chancellor’s decision. To make matters worse he awarded his buddy Kevin Shannon, Elting’s Delaware attorney, $1.4 million dollars in legal fees that weren’t even itemized, to be paid by Shawe. Shawe is of course appealing all the rulings in the Delaware Supreme Court and hopes that justice will prevail and the reputation of Delaware will be restored.

More facts:

  1. Chancellor Andre Bouchard appeared in a public educational forum in New Orleans with Elting’s attorney, Kevin Shannon, during the decision making period of the case. Additionally, the two were seen socializing together at a Boondoggle. They are also former business associates and known friends. None of this was disclosed prior to or during the trial. Indeed, by any ethical standards this is an impropriety and raises serious concerns.
  2. Bouchard ruled that irreparable damage was occurring in the company when in fact the company was making record profits. Irreparable damage involves financial loss; this company is making money hand over fist.
  3. Bouchard ordered the company to be sold, when indeed legal precedent indicates that this can only occur when there are just two stockholders- TransPerfect has 3 stockholders. Bouchard claims that Shirley Shawe doesn’t count because she always votes with her son. This kind of irrational and emotional decision making is going to scare away other companies from incorporating in Delaware. Bouchard has blatantly and consistently ignored the legal issues and tailored the evidence to fit the law.
  4. Evidence indicating fraud on the part of Elizabeth Elting, whereby huge sums of money were taken out of the company to buy personal real estate, was not allowed to be presented by Shawe.
  5. Hearsay evidence presented by Elting’s attorney without legitimate collaboration was accepted as valid by Bouchard.
  6. Sanctions were ordered in the amount of $7.1 million dollars against Shawe to be paid to Elting because of the presentation by Kevin Shannon (Elting’s attorney) – on his word only. The law is not supposed to work that way?
  7. A special custodian, a former business partner of Chancellor Bouchard’s, was appointed by the Chancellor, and has created a reign of terror at TransPerfect with unfair threats and firings, while seemingly billing the company unnecessarily out of millions of dollars, all approved by Chancellor Andre Bouchard. This is quite a deal that Robert Pincus of Skadden Arps (Bouchard’s former law firm) has going; much to the detriment of TransPerfect.

Folks, all this being said, what is an objective observer supposed to think? Is it possible that Elting’s attorney, Kevin Shannon and Delaware’s Chancellor, Andre Bouchard have cut some kind of deal? Could there be a kick back under the table or some kind of promised future remuneration down the road.? What about former business partner and now Custodian Pincus, who is enjoying millions of dollars from TransPerfect? Could there be an under the table arrangement here where Bouchard eventually benefits? If this were true, how could it ever be proven? If it did happen, what a sweet arrangement?

As Shakespeare once wrote, “There is something rotten in Denmark”. The law is very clear about this sort of thing – “the appearance of an impropriety is as bad as the impropriety itself.” There are indeed some appearances of impropriety here folks that are very disturbing. The citizens of Delaware and those that are incorporated in Delaware should not have to wonder about this sort of thing. It is outrageous, it is wrong, and it is despicable in my educated opinion. The Delaware Legislature, the Court of the Judiciary, and the Delaware Bar Association should be deeply concerned, as well.

As always your comments are welcome.

Respectfully yours,

JUDSON Bennett-Coastal Network


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