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Updated on September 13, 2016

Delaware Chancellor’s Ridiculously Biased $7.1 Million Sanction Ruling:

The more research I do, the more completely convinced I feel that there is something rotten in the state of Bouchard's Chancery Court.

At Phillip Shawe's age, and level of accomplishment, one's reputation is a careful thing. Mr. Shawe has a spotless record over his 24-year career, building TransPerfect into the industry leader that it is today. Elizabeth Elting's (Shawe's scorned ex) set out on a campaign against Shawe and, early on, intentionally made false public claims that Shawe harassed her. Further, when over 20 women in TransPerfect management became outraged by Elting's false claims, they came to Shawe's defense and submitted affidavits (along with 100 other TransPerfect employees) proving Elting's claims were a complete sham -- Elting had no affidavits and quickly dropped all such claims (although not before she made them public in New York, and incorporated them into the Delaware case record).

To sum it up, 120 people submitted affidavits in support of Shawe, and the New York judge dismissed the case and sanctioned Elting for lying. Then 10 people testified for Shawe at two hearings in Delaware and no one called him a liar and no one testified that he spoliated evidence. Then, 10 top managers offered to buy Elting's shares, saying they had full faith and trust in Shawe to be their partner. Finally, 610 people signed a petition at the company saying Shawe had their trust, and is needed for the company's future success. Elting had no witnesses in any court and her lawyer said it was because "that they didn't want to bother anyone." The only people who called Shawe a liar were Elting, her lawyer (Kevin Shannon, the Chancellor’s buddy), and Bouchard. Isn't that convenient? What was the point of having a trial in the first place? How is it that so many people can be ignored in a true system of justice?

One would think that, a scorned ex-lover capable of trying to ruin a man's reputation with intentionally false allegations regarding such conduct would be held accountable by Chancellor Bouchard... Right? No -- exactly the opposite.

Elting first lied about Shawe sexually harassing her. When that failed, she accused Shawe of burglarizing his own company office. When that failed, she accused Shawe of wrong-doing by reading emails Elting stored on the company's public email server. When that failed, she accused Shawe of obstructing discovery with respect to employee witnesses. When that failed, she accused Shawe of spoliation. When that failed, she accused "deleting" (whatever that means in Bouchard's world, because all evidence was preserved -- so no evidence was deleted or "spoilated"). And when all of that finally failed, Bouchard allowed her to unconstitutionally flip-flop her case, with no notice, and no due process, to a case about "lying". What's does "lying" mean in Bouchard's Kangaroo Court? Let's see...
Let's look at an example, of what, according to Bouchard, constitutes "lying" by Mr. Shawe, and you make your own judgement:

Shawe called Elting a "minority shareholder" because she owns 50% of the company and cannot convey control to a buyer, which means her shares are worth a discounted value. So Elting misused the Court system to get a buy/sell agreement that she never negotiated for, in an effort to create more money for herself-- (and make more millions ).

How dare Shawe, with his 5 business degrees, call his partner Elting a "minority" shareholder? ... well that's what she is with a 50% stake. But what did Bouchard do? He turned what is, at most, a difference of opinion between the Chancellor and Shawe (and as you'll see, Shawe is correct). Bouchard turns this disagreement into a huge case of "lying"? Judges are immune to lawsuits for defamation, but my opinion is that Bouchard's comments here are so completely off the deep end and based on insipid logic, that he should be subject to discipline by the Delaware Supreme Court, the Delaware Bar or the Court of the Judiciary.

Let's look at what Bouchard says about Shawe, for this difference of opinion about the definition of a "minority shareholder" -- On Thursday, September 18, 2014, Bouchard said the following in open court about Shawe, in regard to his public statement that Elting was a "minority shareholder" -- if these comments by a Judge, who is charged with the fair and dispassionate administration of justice, doesn't shock and offend your conscience, I'm not sure what will:

BOUCHARD: "[Elting] she is also a co-CEO and owns 50 percent and is not a minority shareholder of this company" (Page 15, Line 18)
SHAWE'S ATTY: And she was a minority shareholder that -- the papers took issue with that. I don't know if Your Honor is concerned in any way about the truth or falsity of that description.
BOUCHARD: I mean, I just think that's flat-out false. (Page 27, Line 5)
BOUCHARD: I think it's just flat-out false to call her a minority shareholder.

SHAWE'S ATTY: Under the Unocal case, that is what she's called.

BOUCHARD: I just disagree fundamentally. [that's right, you 'disagree' Bouchard, your disagreement or lack of knowledge, does not make Shawe a liar]

SHAWE'S ATTY: Logically, Your Honor, I understand the disagreement. But if not a majority, then a minority. We are unaware of a word that describes something perfectly in-between.

THE COURT: Fifty-percent owner. [really Bouchard??? there is no such official term in the world of business]

SHAWE'S ATTY: Majority and minority generally are thought of as occupying the spectrum. (Page 27, Line 15)
BOUCHARD: [...] But to me, whoever did write it, there was a clear message being sent in using that word that was just false and grossly misleading. (Page 28, Line 7)
BOUCHARD: [...] but it was, in my view, patently false, certainly seriously misleading to characterize the action in New York as one brought by a minority shareholder, to, in effect, characterize Ms. Elting as a minority shareholder when she has 50 percent ownership of TPG. (Page 35, Line 18)

Is anyone else offended or, at minimum, concerned by Bouchard's intentionally nasty headline-grabbing rhetoric over what is a basically, at worst, a difference of opinion -- a nit-pick? All the Chancellors examples of Shawe "lying" fall into this same category. When a Chancellor calls someone a "liar" and says they make "patently false" and "grossly misleading" statements -- should they not be held accountable, if it is, in fact, Bouchard who is the one who "lying"?

Incidentally, if Shawe is "lying" about this, so is the New Jersey Supreme Court. Perhaps Delaware should fine New Jersey $7.1 million dollars as well.

New Jersey Supreme Court:

"Note that for the purposes of this statute, each of two fifty-percent shareholders is a “minority” shareholder. Because a fifty-percent shareholder cannot direct outcomes as a fifty-one percent shareholder can, he does not have “control” of the corporation. See Balsamides, supra, 313 N.J.Super. at 16, 712 A.2d 673; see also Bonavita v. Corbo, 300 N.J.Super. 179, 187-89, 692 A.2d 119 (Ch.Div.1996)."

I am amazed and shocked at how Chancellor Andre Bouchard, with the use of his over-dramatizations of immaterial differences of opinion or recollection, moved this case where he wanted it to go. Bouchard was blatantly biased and used his power unfairly -- a direct violation of his duty under the law as directed by the “Judicial Canons” of the State of Delaware. I have read them all, and it is apparent to me as an educated layman and incessant student of this case, that Bouchard appears remiss in fulfilling his duty to adhere to these designated standards in all the important aspects of this Chancery Court trial. Furthermore, and most importantly, if Delaware allows someone to misuse his position on the bench to rule incorrectly and justify it by spewing misleading rhetoric about a Director and CEO of a Delaware corporation -- with a spotless record of leading TransPerfect's growth from 2 people to more than 4,000 people over 24 years; and then sanctioning him with an unjust, unprecedented, and ludicrous sum of $7.1 million dollars is beyond the comprehension of any reasonable man. It is without viable justification and reeks of bias, cronyism, and judicial overreach.

If this is the new face of "justice" in Delaware, than I am more convinced than ever before about the damaged reputation of our beloved state as the incorporation leader of the world. These actions by this rogue Judge do not serve equity or justice, but only serve to denigrate and nullify the advantages of a business incorporating in Delaware. In my opinion, Bouchard should be impeached or removed from his position by any and all means possible.

Why would anyone choose to incorporate their business in Delaware if the possibility of this kind of adjudication exists?

Respectfully Submitted,
JUDSON Bennett-Coastal Network


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