Longtime Delaware courts attacker TransPerfect found in contempt, faces fines of $30K a day

Karl Baker
The News Journal

TransPerfect and its firebrand CEO Phil Shawe – longtime thorns in the side of Delaware courts – have been held in contempt by a state Chancery Court judge. 

It is the latest in a yearslong drama featuring Shawe's unprecedented resentment over Delaware's court-ordered sale of his profitable New York translation company.

In a ruling Thursday, Chancery Court Chancellor Andre Bouchard said starting next week, Shawe and the company would be fined $30,000 a day if they do not drop litigation in Nevada. 

They filed the suit in August against Robert Pincus, a Wilmington attorney the court appointed in 2015 to oversee the controversial sale of the company. TransPerfect and Shawe argue that Pincus has charged exorbitant fees for the work he performed as custodian overseeing the sale. Pincus also will not disclose the details of how his firm calculated those fees, they say. 

By suing in Nevada, TransPerfect violated a previous order declaring that any such dispute should be fought in Delaware exclusively, Bouchard said.

The Thursday ruling lands a week after celebrity attorney Alan Dershowitz argued in the corresponding contempt hearing that Chancery Court would be "blindfolded from the facts" if it sided with Pincus. 

Bouchard appeared frustrated by many of the arguments made by the legendary attorney representing Shawe.

After Dershowitz argued that signed documents prohibiting TransPerfect from suing outside Delaware were not a judge’s order, Bouchard interjected: It says “order” on the page.

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Chancellor Andre Bouchard of the Delaware Court of Chancery in 2016.

Bouchard, in Thursday's opinion, said Shawe and TransPerfect were willful in an "attempt to circumvent the court’s exclusive jurisdiction."

If they do not dismiss their Nevada case by next Tuesday, the Delaware court will fine them $30,000 each day. If the case is not dismissed 10 days after that, "the court would entertain a motion to increase the amount of the monetary sanction," Bouchard said.

He called the sanction "a modest amount" given that the company was valued at more than $750 million during its 2018 sale. 

Bouchard made the ruling amid continuous attacks on him and on Delaware courts, as part of an advertising campaign in the state paid for by an advocacy group funded by TransPerfect employees. One ad, published in The News Journal, shows Bouchard in a photo with four other men in front of numerous empty bottles of wine. 

The campaign even extended to attacks on Joe Biden in the early primary state of Iowa, where Shawe's mother, in a half-million-dollar campaign, claimed the former vice president supports a Delaware judicial system that "cuts out thousands of people who end up hurt by the court's decisions."  

The attack ads confounded some in the national media, who have called it an "obscure grudge" and said it has "little to do with 2020 issues."  

The animus began in 2015 after Bouchard ordered TransPerfect to be auctioned off because infighting between the founders – Shawe and his ex-fiancée Liz Elting – caused "irreparable harm" to employees and clients.

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In response, Shawe and various TransPerfect employees mounted a massive campaign to defend the company, largely by attacking Delaware institutions – particularly Bouchard and Pincus.

The loudest of those efforts came from a group called Citizens for a Pro-Business Delaware. Officials of the organization claim it primarily is funded by TransPerfect employees, and not by Shawe.   

Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.

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