A recent Law 360 story, “TransPerfect Boss Hit with $7.1M Fee Sanction by Del. Court,” reports that TransPerfect Global Inc. co-CEO Philip R. Shawe was ordered to pay $7.1 million to company counterpart and co-founder Elizabeth Elting, a legal fee sanction that a Delaware Chancery judge had said earlier reflects the “clear evidence” of Shawe’s misconduct during a bitter legal and personal feud.
 
Chancellor Andre G. Bouchard, who has presided over a series of rancorous legal battles between the top executives of the $1 billion company since 2014, said there was “no just reason” to delay the order.  Shawe already has filed for state Supreme Court review of a related order placing the company under a custodian pending sale, after the lower court certified the issues for interim appeal.

"The events underlying the sanctions motion overlap with matters decided in the [sale] merits opinion," Chancellor Bouchard wrote, noting that "the interests of justice and judicial economy would be served best through simultaneous appellate review.”

The court ordered Shawe to pay all the legal fees Elting ran up while battling him for sanctions over claims that he destroyed or withheld evidence, directed subordinates to enter Elting’s office and photograph or take documents and files and lied to the court about it, among other allegations.

Chancellor Bouchard also ordered Shawe to pay a third of Elting’s costs for the wider legal battle over control and sale of the company, saying Shawe’s behavior increased Elting’s costs in those proceedings.

“Each form of Shawe’s misconduct prejudiced Elting’s ability to fully develop the record for, and needlessly complicated the litigation of” the lawsuit seeking sale of the company, Chancellor Bouchard noted in his original sanctions ruling on July 20.

Sanctions order revealed that the two sides spent huge sums on their legal battles, with Elting paying $12.6 million in combined fees and expenses for the sale and sanctions battles and Shawe reporting a $13.2 million legal tab.  "The litigation of these proceedings has been a complex affair in which each side has been represented by an army of lawyers.”  Chancellor Bouchard said in his fee order.

Elting attorney Philip S. Kaufman of Kramer Levin Naftalis & Frankel LLP said after release of the order that “Ms. Elting is gratified that the court continues to rule in her favor while holding Mr. Shawe accountable for his extraordinary misconduct.”

Shawe attorney Martin Russo of Gusrae Kaplan said that, in his opinion, the sanctions decision reflected "extreme court bias" against Shawe and that Elting's team was inappropriately permitted to change its legal theory during the sanctions trial.

"The case has been certified for interlocutory appeal, and I am confident that the Delaware Supreme Court (or, if necessary, the U.S. Supreme Court) will reverse both the sale order and sanctions order based on the law," Russo said.

Elting earlier this month submitted a nearly $8 million bill under the order, including more than $7.3 million for attorney fees and $656,500 in expenses.  Chancellor Bouchard reduced those amounts by about 11 percent after Shawe challenged some expenses.  The total includes $6.52 million for professional fees and more than $584,000 for legal expense reimbursements.

TransPerfect, which was described as getting its start by Shawe and Elting in a New York University college dorm room in 1992, has more than 4,000 employees and 92 offices in 86 cities worldwide and draws on a network of 10,000 translators and related staff working in 170 languages.

Although the company has never posted a loss, it also has not seen peace between its founders in years.  Their troubles escalated recently, according to the court, involving reports of tantrums, email tirades, use of business decisions and actions as hostages and allegations of email and privileged communication theft by Shawe.

The cases are In re: TransPerfect Global Inc., case numbers 9661, 9686 and 9700, in the Court of Chancery of the State of Delaware.