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SB53 – A Transperfect Fix?

You may recall ads on TV, radio and in the newspaper a couple of months ago concerning litigation before the Delaware Supreme Court that could affect the continued existence of a court reporting, translation, and document management company called TransPerfect. The company was owned by a couple, who were once engaged, Phil Shaw and Liz Elting. But their personal split has led to infighting in the business, which has led to litigation in Delaware’s Chancery Court.   Last year, the Chancery Court ordered the sale of the company after concluding that fighting between Shawe and Elting, created “a dysfunctional atmosphere” that could harm both clients and employees.   Noted Delaware legal scholar Rudy Giuliani criticized the decision as judicial overreach.  Those who actually work in Delaware Corporate law, however, say the Chancellor accurately applied Delaware Law in this situation.

Regardless, Senator Bonini seeks to a fix a problem by making it worse it would seem. His SB53 would require the Court of Chancery to wait three years before it can order the sale of a company. It also will include other measures including the appointment of directors to break management deadlocks to avoid a sale.   I do not see how extending business infighting for three years is beneficial to the company.

The Delaware Bar Association’s Corporate Law Council has refused to endorse the proposal, which is probably a death knell for this bill.

The Corporate Law Council typically endorses proposed legislation before it is introduced in the General Assembly. Members of Delaware’s corporate bar said they couldn’t recall the last time a legislative change to Delaware’s General Corporation Law was approved by the Legislature without the bar association’s recommendation.

“The partnership between the Corporate Law Council and the General Assembly has been a very successful one for the last 50 years,” said Lawrence A. Hamermesh, a professor of corporate law at Widener University’s Delaware Law School. “I hope that trust continues if the council says, ‘We don’t think it is a good idea,’ that judgment would be respected.”


UPDATED: 6/8/17

SPONSORS: Bonini, Kowalko, Bennett, Briggs King, Ramone, Wilson



HISTORY: Placed in the Senate Elections & Government Affairs Committee on 3/30/17

STATUS: Waiting on a hearing in committee.


32 comments on “SB53 – A Transperfect Fix?

  1. A better fix would be to prohibit a 50-50 split of shares in a two-person corporation — or maybe that is already on the books. When Transperfect was incorporated, Elting got 50 shares, Shaw 49, and Shaw’s mother 1 (I believe I read this in the News Journal). I also believe that Shaw is behind the “employee-driven initiative” to prevent the sale of the company. If he cared so much for his employees, he would compromise with his partner to divvy the company up without destroying it. I don’t know a single freelance translator who enjoys working with Transperfect (I never did), and I’ve read on GlassDoor that it can be awful to work there as a low-ranking employee.

  2. So this bill gives the court the opportunity to let a company further damage itself, its employees and its value for another three years. That’s a pretty crazy conception of afixing this kind of problem. Plus, it seems to me that these people allocated this company knowing the risk of this split of ownership — it is overreach to pretend that a “time out” would somehow make any difference.

  3. Aw, this was a really nice post. Taking the time and actual
    effort to produce a top notch article… but what can I say… I put things off a lot and don’t seem to get nearly anything done.

  4. Linguist

    Why does everybody talk about what “a profitable company” TransPerfect is. They are just a middle man who re-sells actual linguists’ work and do everything in their power to prevent the submission of full invoices.

    It takes so long to get a final purchase order and when it finally arrives it’s filled with deductions and errors, but the “correction” process is tedious since the PO doesn’t match the file name and corrections take more than a month …. so out of desperation you take the small partial payment because your refrigerator is empty and the rent needs to be paid.

    I estimate 75% of my time goes unpaid. I often have to sell my belongings on eBay just to get groceries due to lost payments, late payments and partial payments.

    Their greed goes deep.

  5. Linguist

    Have you read the employee’s reports on Glass Door?”

    “No financial records have been maintained for the last six months and it seems only a matter of time before the authorities will take action.”

    “Project managers receive training in manipulating and misleading translators. We were told that translators were overpaid fat cats and a good pay cut was long overdue. ”

    “In a way, you cannot help admiring TransPerfect for perfecting this diabolical way of operating. This is greed performed to perfection.”

    “All you will do, is trying to push translators to work for you at ridiculously low rates. Tactics used to get translators’ cooperation are making promises of better paid jobs at some point in the future (just do this one for next to nothing, next time I will make it up to you), providing misleading information about the nature of the job (“piece of cake, should not take more than two hours” when you know this is a hell of a job with lots of tables and formatting), claiming the client “has got an issue with your translation” in order to cut payments while no negative feedback was received at all, and overcharging clients for services not performed (skip the proofreading, they won’t notice – add formatting, they don’t know what this is anyway, charge “project management”, they won’t protest).”

  6. Alice Pearce

    Senator Bonini is not making the problem worse with his bill. He is trying to protect a private company from massive government over-reach. What you have failed to mention is that TransPerfect is a profitable company, and to have one person (who has never had any affiliation with the company or the space), come in and force a sale of a profitable company, without any attempt to let the founders resolve the problems themselves, is where this massive over-reaching is taking place. If TransPerfect was in bankruptcy, then you might have an argument with your Bonini comments. This company that has been profitable every year since it’s inception, and continues to grow even through all these lawsuits.

    • EVERY attempt has been made to let the owners resolve the problem themselves. What you describe as “over-reach” is law that has been on the books for decades.

      Now explain why selling the company means job losses, and why Delaware should change its laws over it. We. Don’t. Care.

      • Thomas Sanchez

        Alby, unfortunately you don’t have any idea what you are talking about. I work at the company, and no one in DE knows anything, except for the people who live there and work for TransPerfect The “woman”, as you say, is the ENTIRE problem, and everyone who works for the company, along with everyone who knows the actual facts of the case, knows that. You, obviously, are not one of those people. The “woman” has ridden the “man’s” coattails every single day for 25 years!
        And as for why selling the company would cost people their jobs: this is a services company, and the only possible buyer would be another company in the same space. So, if one of the competitors buys the company, they will have no interest in keeping it together. The only thing they will have interest in is the company’s clients. Therefore, major layoffs will occur immediately, resulting in thousands of people losing their jobs.

      • Thomas Sanchez

        Check out this link for more true facts about the case, and how the attorney for the “woman” in this case royally misled the court:

        • Anna Durham

          Thomas Sanchez is right. The lawyers for the “woman”, Liz Elting, completely lied and defrauded the court. The following video is direct evidence of this:

          • Y’all can keep doing this until doomsday and it still won’t matter. Your hero is the one who lied to the court, repeatedly.

            You still haven’t answered the question: So what if the company is sold? What’s it to you employees? You have no say in the matter, period.

            • Bailey Danniels

              There is no evidence whatsoever against Shawe, as no one testified against him. Chancellor Bouchard and Kevin Shannon of Potter Anderson are the Boss Hogg and Roscoe P Coltrane of Delaware’s legal system. There is no one who can watch the video above and not conclude an investigation is warranted. A crooked judge saying someone lied does not make it so.

    • AGovernor

      The founders brought their problems to court for resolution because they couldn’t resolve the problem themselves.

  7. Thomas Sanchez

    If this company is such a “dysfunctional atmosphere,” as you claim in your article, then why has the company had double-digit growth every year since it started? Even the last couple of years, with all the lawsuits and nonsense brought about by Liz Elting, the company has still managed double-digit growth despite the distraction. What the dysfunctional is in the co-owner Liz Elting. This is clearly an attempt to manipulate the courts and the media in order to cash out a higher price for her shares. This whole situation is a straight money play by Liz Elting and everyone who knows the facts knows this.

    • Bullshit. You’ve got the wrong name in there. The man, not the woman, is the problem, and everyone in Delaware knows it.

      Now explain why selling the company would cost people their jobs, a claim that makes no sense.

  8. Peter Hank

    Sen Bonini’s bill is not making the problem worse at all. Anyone who knows the facts of this case knows that the bill is a great solution not just for the TP situation, but any other companies that may find themselves in this situation in the future. This is a profitable company, with double digit growth every year since it started 25 years ago, and continues to grow despite all this nonsense litigation. And this bill would protect a company like this from being forced to sale simply because a chancery court judge claims there is “deadlock”. To appoint a custodian to a profitable company and force it to auction without any reasonable attempt to solve the internal problems is the worst form of government over-reach. This bill would protect companies from the situation TP has found itself in, and is a sensible solution for a state that claims to be the “corporate friendly” state DE says it is.

    • AGovernor

      Again the founders looked to the court for a solution because they could not solve their internal problems. They had every opportunity to solve their problems before going to the court.

      • I fail to understand why a company that clearly cannot govern itself needs the government to provide a governance bailout. This company is not a failure because it doesn’t make money or that it doesn’t do good work — it has failed because its leadership built a risky governance model and now they are paying the price. More time won’t make a difference to the fact that they are in no position to run this company.

  9. I am starting to think that one of the owners can use any proceeds from the sale of the company to start a very lucrative sock-puppet company.

    • Take a wild guess which owner that is? Hint: It’s the one whose behavior has been execrable since the start of these legal difficulties. Another hint: He’s a mama’s boy.

  10. Bailey Danniels

    Once again Alby, your comments are a clear indication that you don’t know anything about this case, the facts, or any of the people involved. You are referring to the male owner, who built this company from the ground up, and from nothing. Liz Elting has ridden the male owner’s innovation and hard work every single day since the company’s inception.

  11. How do you know? You weren’t there.

    The Delaware Court of Chancery is well within its powers to adjudicate the case this way. If YOU knew what you were talking about, you’d know that this is a normal way to solve this situation.

    What I am not — and you clearly are — is personally involved in the case. I can tell you, though, what the attitude of the legal community in Delaware is. You will win this case when hell freezes over.

    Answer the simple question: Why should anyone who doesn’t work for the company care if the company is sold? Why can’t the male owner — a man so thoroughly corrupt that he gave his mom 1% of the company so he could claim it was female-owed — let go of this and move on?

    The male owner better hope I never run into him.

  12. I don’t pretend to know much about Transperfect but SB53 seems to put a restraint on government oversight or control over private corporations. Anything that puts an appropriate check and balance on government control is a good measure. It’s in the interest of the company owners to try to reach equitable solution for themselves and the employees. Yes, it can be a painful process for owners and employee, but the government should not have the right to step at its own discretion to resolve the matter to its liking. SB53 seems only to require a reasonable waiting period – no more. Why is that not reasonable? Opponents of the bill presume that government control is a better solution – a pretty poor assumption in my humble opinion.

  13. Interesting comment by another big player in the translation business in Slator:
    “We would never be buyers of TransPerfect. We don’t have a high opinion of the quality of their work. We regard them as more of a sweatshop and a very sales-driven organization. We, of course, compete with them in some areas. They are big in life sciences. And we occasionally run into them offering ridiculous pricing in patent translation. So, we would not be buyers of the whole of TransPerfect by any stretch of the imagination.” –Andrew Brode, Chairman, RWS

    Based on my own experience as a freelance translator who worked with Transperfect for a couple of years, sweatshop is an accurate characterization.

    This is a unique circumstance resulting from bad decisions by the owners when they incorporated, not a distillation of many years of similarly problematic cases. It’s great that Transperfect employees have organized, but they’re focused on the wrong target — they need to put pressure on the owners to resolve their differences. Whatever happened to the idea that the employees would buy the owners out?

  14. Man, but you assholes piss me off.

    Sentences like this one: “the government should not have the right to step at its own discretion to resolve the matter to its liking.”

    You fucking asswipe, the government didn’t “step in.” THE OWNERS BROUGHT IT TO COURT! I would never hire you people to translate anything, because YOU DON’T FUCKING UNDERSTAND ENGLISH!

  15. Bailey Danniels

    Once again Alby, you don’t know or understand the facts of this case. The “owners” did not bring this case to court. One of the owners, Liz Elting, filed a lawsuit as a means of creating a deadlock situation so she could cash out her shares at a grossly inflated price. On top of that, TP has had to deal with the corrupt Chancery in Delaware, that has installed a custodian who is doing nothing but lining the pockets of his cohorts with the hard earned money of all the people at TransPerfect. The custodian, Robert Pincus, has extorted as much as $15 million from TP without accounting for nothing but a fraction of it. The whole system down in Delaware is as corrupt as it gets, and people are going to start filing for corporation status in other states after learning of this case

  16. I’ve been fascinated by this case–here’s an update: Shawe (of TransPerfect) is still navigating the mess caused by Chancellor Bouchard installing someone from his old law firm, Skadden Arps, to be the custodian of TransPerfect. The nepotism and abuse of the Court of Chancery in Delaware is outstanding–and exactly why Shawe moved the company’s incorporation to Delaware:

    • You have to be a special kind of fool and idiot to think Phil Shawe is anything but a piece of shit with legs and a mouth.

      • And you have to have been steered to a three-year-old post so you could spread this horseshit.

  17. 1pointoforder

    This is not an update of the Transperfect case. It is a hit piece written by an attorney in criminal practice in New York state. Citizens for Pro-Business Delaware most likely pointed this “attorney/journalist” to this topic. Citizens for Pro Business Delaware is a astroturf group funded by Phil Shawe, the “losing” party in the Transperfect matter. He has a personal vendetta against Chancellor Bouchard.

    They come close with criticism of the lack of diversity on the bench, but that starts with the lack of diversity in the bar; something that can’t be addressed with a $450,000 ad campaign.

  18. Joe Connor

    Jud Bennett is smiling in Palm Beach with this mud dredge:)

    • She’s been fascinated with this case. In other words, she’s Shawe’s mom.

      The biggest myth about Donald Trump is that he’s one of a kind. This country is full of shitmaggot “entrepreneurs” and “job creators” just like him.

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