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TransPerfect Translations, known as "TransPerfect", is a translation services company based in New York City. The company provides "translation and discovery services" primarily to companies in the legal and healthcare fields. As of 2012, TransPerfect was "the largest privately owned language services provider, with offices in over 90 cities worldwide". The company has three shareholders. Elting-50%, Phil Shawe-49%, and Shirley Shawe-1%. The majority female status has made it possible for the company to be considered a Woman Owned Business for purposes of certain media, awards, contracts and RFP processes.

History

TransPerfect founders Elizabeth Elting and Phil Shawe met in a New York University (NYU) dormitory room and founded the company in 1992. With no external financing, TransPerfect grew from a two-person dormitory-based operation into one of the 125 largest privately held companies in the New York area.

Patented Technology

In July 2013, TransPerfect prevailed in a U.S. Federal patent trial against competitor MotionPoint. The trial began as a result of MotionPoint's claim that TransPerfect's use of its own translation technology patent was invalid, and infringed one of MotionPoint's patents. TransPerfect sued MotionPoint, and MotionPoint filed a counter-suit. After three weeks of arguments, a California jury voted in favor TransPerfect and awarded $1 million in damages. In July 2015, the United States Patent and Trademark Office Trial and Appeal Board ruled that the claims of the Transperfect patent in question was unpatentable.

Legal Activities

Following an apparent difficulty in communications between one another, Elting considered her options regarding her 50% ownership of the company. Among the issues she was concerned with was the value of her 50% ownership share. Elting sought relief from the legal system. Shawe saw that as an attempt by Elting to use the courts to help her negotiate an exit policy. In 2014, Elting sought to remove Shawe as an officer of TransPerfect Translations International, Inc. (TPI). Elting sought an injunction barring Shawe from conducting any managerial activity related to TransPerfect and sought the dissolution of TransPerfect, alleging that Shawe had engaged in "erratic and abusive behavior". New York State Supreme Court Justice Melvin Schweitzer dismissed the case, suggesting the two needed to work it out privately and not seek remedy from a court.

The suit was then taken to the Delaware Chancery where Elting reissued her complaint, and Shawe alleged that Elting had breached her fiduciary duties by not moving ahead with certain business-related opportunities, such as leases, acquisitions, and diverting funds for her own personal use. In August 2015, The Chancellor of the Delaware Chancery Court, Andre Bouchard, decided to have a third-party sell the shares of the company in a public auction.

Former New York Mayor Rudolph Giuliani chimed in and suggested that the court decision in Delaware would harm Delaware's status as a popular business incorporation state. NY Justice Schweitzer also publicly commented on the case in Delaware, saying, "I was kind of shocked at how extreme the result was... The company is still doing phenomenally well and I thought there were steps that should have been taken short of ordering a sale. That's would I would have done if I still had the case."

The argument against the Chancellor has been the misapplication of Delaware General Corporation Law, clause 226 that authorizes the sale of a company when it faces financial default and other catastrophic issues. Here, as the company has only proven to do even better each year, even during this lawsuit period. The defendants have argued that the company has not suffered and that the only remedy is the appointment of tie-breaking board member to help move issues along. Following Bouchard's decision, Shawe sought an appeal of the ruling and the oral argument was held on January 18, 2017.

For the appeal, Professor Alan Dershowitz argued for Shirley Shawe, a 1% owner in the company. Dershowitz argued that Chancellor Bouchard's decision was tantamount to an illegal constitutional taking Delaware Chief justice Leo Strine argued back to Dershowitz that he had no right to bring that up since it was not in the initial case, and the two argued over the law. The appeal affirmed Bouchard's decision.

Shawe and Dershowitz have suggested that they will petition the U.S. Supreme Court for certiorari

Employee Group Forms to Protect Company

Included in this case has been a campaign waged by a group that calls itself Citizens for a Pro-Business Delaware to lobby the legislature to change the chancery rules regarding the forced sale of a private, well performing company. The group claims over 1200 members. "Citizens " built a website, has run television commercials, taken billboard and newspaper ads, petitioned elected leaders and held press conferences to press the issue of their concern for the jobs that may be lost and the impact this decision would have on Delaware's ability to continue attracting new companies to incorporate in the state.

Controversial Legal Issues

There have been charges of unethical actions by Elting's law firm Kramer Levin Naftalis & Frankel, which was sanctioned by the Chancery Court for "repeatedly instruct a witness not to answer questions

A defamation suit was filed by Shirley Shawe against Kramer Levin, claiming that its lead attorney on the case “crossed the line” by making false statements in connection with the Delaware sale case that “were intended to damage Shawe’s business and personal reputation,” while talking to a reporter about the case. Citing that same interview, attorney Philip Kaufman was also accused of contradicting himself when he argued before the appeal court from what he claimed to the reporter. Ms. Shaw ran a series of TV ads highlighting the varying sets of comments made by Kaufman and the video was posted to Youtube.

References

1. "TransPerfect provides language and technology services to manage multilingual content". Forbes. Retrieved 26 October 2016.
2. ^ Stengel, Geri (27 February 2013). "A $340 Million Company Shares Strategies For Growing Without Outside Funding". Forbes. Retrieved 11 January 2016.
3. Chase, Randall (13 Feb 2017). "Court-Ordered Sale of TransPerfect Translation Company Is Upheld". New York Times.
4. Stengel, Geri (11 January 2012). "Want to Grow the Economy? Change Four Attitudes About Women Entrepreneurs". Forbes. Retrieved 11 January 2016.
5. "IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE". In re: SHAWE & ELTING LLC. In re: TRANSPERFECT GLOBAL, INC.: 3 13 Aug 2015.
6. Bresiger, Gregory (10 May 2015). "New York City boasts four top women-led companies". News Corp. New York Post.
7. Savchuk, Katia (25 May 2016). "Inside The Nasty Corporate Divorce Between Ex-Lovers Who Built A Company Worth Nearly $1 Billion". Forbes. Forbes Media LLC.
8. "Top 125 Privately Held Companies". Crain's New York Business. Crain Communications, Inc. 19 November 2012. Retrieved 19 June 2013.
9. Paul Demery (29 July 2013). "In a web translation patent battle, the jury sides with TransPerfect". Internet Retailer. Vertical Web Media. Retrieved 18 August 2013.
10. Donald DePalma (15 July 2013). "Jury Decides Translation Automation Case". Common Sense Advisory. Common Sense Advisory, Inc. Retrieved 18 August 2013.
11. "MotionPoint Corporation v. TransPerfect Global: Final Written Decision Finding All Challenged Claims Unpatentable".
12. Rainey, Douglas (2 Jan 2017). "Did TransPerfect's Shawe get a fair shake in sales dispute?". No. "a would-be buyer other than Shawe would not pay top-dollar for a 50-50 share that would still leave control of the company in limbo". bird street media llc. Delaware Business Now.
13. Faes, Florian (29 Nov 2016). "A Fight About Money, Not Spite, Says TransPerfect's Phil Shawe". Slator.com.
14. Elting v. Shawe (Supreme Court Of The State Of New York County Of New York August 4th, 2014), Text.
15. Ross, Barbara. "Co-founder of $400 million company seeks restraining order against his business partner and former lover". New York Daily News. NYDailyNews.com. Retrieved 18 June 2014.
16. "TransPerfect Translations International Announces Major Victory In New York Supreme Court". PR Newswire. The Street. 8 Sep 2014.
17. Chiappardi, Matthew (3 Jun 2015). "TransPerfect Co-CEOs Warned To Make Peace Or Else". Portfolio Media, Inc. Law360.
18. "Court orders feuding biz partners, ex-lovers, to sell their profitable translation firm".
19. Mordock, Jeffrey (22 Apr 2016). "Giuliani blasts Delaware court for decision in lover's spat". News Journal. USA Today. Delaware Online.
20. Davidoff Solomon, Steven (15 Nov 2016). "TransPerfect Is Threatened by Owners' Petulance". Dealbook. New York Times.
21. Mordock, Jeff (12 Jan 2017). "Shawe adds celebrity attorney Dershowitz to legal team". The News Journal. USA Today. The Arizona Republic.
22. Bonini, Colin (8 Feb 2017). "We must keep Delaware the best place for business". Delaware Voice. USA Today Network. The News Journal.
23. Lucas, Fred (27 May 2016). "Judicial Overreach: Small Court, Big Economic Ramifications". Townhall.com. Townhall.
24. Mordock, Jeffrey (16 Nov 2016). "Supreme Court to hear TransPerfect case on Jan. 18". The News Journal. Delaware Online. USA Today Network.
25. ^ Feeley, Jef (18 Jan 2017). "Dershowitz Adds Star Power to Heated TransPerfect Fight". Bloomberg. Bloomberg LP.
26. Mordock, Jeff. "Alan Dershowitz, Justice Strine spar over TransPerfect". New Journal. No. 18 Jan 2017. Delawareonline. USA Today.
27. McParland, Tom (13 Feb 2017). "Del. Supreme Court Upholds Forced Sale of TransPerfect". Delaware Law Weekly. ALM Media Properties, LLC.
28. McParland, Tom (20 Jan 2017). "TransPerfect-Linked Group Lobbies to Curb Forced Sales of Corporations". Delaware Law Weekly. ALM Media Properties, LLC.
29. Hals, Thomas (13 Feb 2017). "Top Delaware court upholds sale of translation firm TransPerfect". Reuters. Yahoo News.
30. "Citizens for a Pro-Business Delaware launches six-figure advertising effort". DELAWARE BUSINESS NOW. bird street media llc. 11 Jan 2017.
31. ^ Mordock, Jeff (18 Oct 2016). "Supreme Court decision a loss for TransPerfect workers". News Journal. USA Today. Delaware Online.
32. "Citizens for a pro Business Delaware". DELAWARE FOR BUSINESS. Citizens for a Pro-Business Delaware Inc.
33. Mordock, Jeff (2 Feb 2017). "TransPerfect workers spend $300,000 on new TV ads". The News Journa. USA Today. Delaware Online.
34. McParland, Tom (17 Feb 2017). "For TransPerfect-Aligned Group, a Legislative Waiting Game". Delaware Business Court Insider. ALM Media Properties, LLC.
35. Feeley, Jef (13 Feb 2017). "Photographer: Henrik Sorensen/Getty Images TransPerfect's Auction Order Endorsed by Delaware High Court". Bloomberg Technology. Bloomberg LP.
36. Rajamani, Maya (14 Aug 2015). "Chancery Sanctions Kramer Levin In TransPerfect Case". Law360. LexiNexis.
37. CASSENS WEISS, DEBRA (30 Sep 2015). "Kramer Levin is sanctioned $135K for deposition conduct". ABA Journal. American Bar Association.
38. Feeley, Jef (1 Feb 2017). "TransPerfect's Shawe Escalates Feud With Defamation Suit". Bloomberg Technology. Bloomberg LP.
39. Rainey, Douglas (20 Feb 2017). "TransPerfect shareholder claims opposing attorney offers contradictory statements". Delaware Business Now. bird street media llc.

• Companies based in New York City
• Companies established in 1992
• Translation companies