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TransPerfect Gets Invoices, Drops Skadden Suit, Appeals Fine

Oct. 21, 2019, 9:20 PM

TransPerfect Global Inc. said Oct. 21 that it would drop a Nevada lawsuit against the Skadden partner appointed to run its forced sale, just in time to avoid a $30,000-a-day fine in Delaware. But the translation company will get the itemized invoices it asked for.

The company and CEO Phil Shawe also disclosed in Chancery Court papers filed the same day that they would ask Delaware’s top court to overturn Chancellor Andre G. Bouchard’s decision imposing the contempt fine four days earlier.

The suit stems from a controversial 2015 ruling by Bouchard, who held that Shawe and co-founder Liz Elting were incapable of running TransPerfect after their romantic relationship ended. He appointed Robert B. Pincus of Skadden Arps Slate Meagher & Flom to serve as the company’s custodian and tiebreaking director.

The state’s top court affirmed, upholding the judge’s authority to order the sale of a profitable but deadlocked company. Bouchard later entered a final order retaining “exclusive jurisdiction” over the matter. Pincus has since retired from Skadden, though he stayed on as custodian.

The case attracted attention for both its legal issues and its tabloid-ready details. Shawe subsequently bought out Elting and moved the company from Delaware to Nevada. Transperfect sued Pincus there in August, accusing him of “shady” billing for unitemized work.

Pincus and Skadden fired back in Delaware, saying Transperfect isn’t paying its bills. They asked Bouchard to impose “meaningful civil contempt sanctions.”

Bouchard granted the motion Oct. 17, saying Transperfect violated the “exclusive jurisdiction” provision. He rejected the company’s contention that the provision doesn’t cover the Nevada suit because it concerns Pincus’s role as director, not his custodianship. The judge also dismissed the argument that the suit is “too complex” for a finding of willful defiance.

He gave TransPerfect four days to drop the Nevada case before the fines kicked in. TransPerfect agreed on the fourth day, after a hearing at which Bouchard directed Skadden to produce invoices related to two fee orders.

Both sides declared victory.

The firm has always maintained that TransPerfect “should be permitted access to invoices, but only in accordance with appropriate procedures,” Skadden said in a statement.

Shawe called the ruling “a major victory for transparency and openness.” Skadden’s billing “remained hidden for too long,” he said in a statement.

Shawe is represented by Kruzhkov Russo PLLC.

The case is In re TransPerfect Global Inc., Del. Ch., No. 9700, appeal filed 10/21/19.

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Jo-el J. Meyer at jmeyer@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com