Court orders TransPerfect CEO to pay $7.1M sanctions

Source: delawareonline.com

TL;DR

The story at a glance

A Delaware judge ordered TransPerfect co-CEO Phil Shawe to pay $7.1 million to co-CEO Liz Elting as sanctions for misconduct in their lawsuit over company control. The two co-founders, former romantic partners, had deadlocked management of the profitable translation firm, leading Chancellor Andre Bouchard to earlier appoint a custodian for its sale. This ruling implements a July 2016 sanctions opinion after Bouchard found Shawe acted in bad faith.[[1]](https://www.delawareonline.com/story/money/2016/08/22/court-orders-transperfect-ceo-pay-71m-sanctions/89098642)

Key points

Details and context

TransPerfect, a New York-based translation company, faced irretrievable deadlocks between its only two directors—Shawe and Elting—threatening harm despite strong profits of $470 million revenue and $80 million net income pre-trial.[[5]](https://courts.delaware.gov/Opinions/Download.aspx?id=319730) Earlier, Bouchard appointed a custodian to sell it after a six-day trial showed dysfunction from bullying, threats to shut down operations, and litigation spending over $27 million in under two years.[[5]](https://courts.delaware.gov/Opinions/Download.aspx?id=319730)

The misconduct stemmed from a sanctions motion filed before that trial, leading to a separate two-day hearing in January 2016. Bouchard described Shawe's actions as bad faith that vexatiously prolonged and complicated the case, justifying fee-shifting under Court of Chancery inherent powers.[[3]](https://courts.delaware.gov/opinions/download.aspx?id=243890)

Shawe later bought out Elting in the auction for about $770 million, but the sanctions were upheld on appeal by the Delaware Supreme Court in 2017.[[6]](https://www.transperfect.com/about/news/del-supreme-court-upholds-770m-transperfect-sale-co-founder)

Key quotes

“Citing ‘unusually deplorable behavior,’” — original article lead on Bouchard's finding.[[1]](https://www.delawareonline.com/story/money/2016/08/22/court-orders-transperfect-ceo-pay-71m-sanctions/89098642)

Why it matters

The ruling underscores Delaware courts' authority to sanction litigation abuse in deadlocked companies, protecting judicial process even for solvent firms. It means co-owners in feuds face personal liability for evidence tampering or lies, hiking costs in high-stakes disputes. Watch appeals or enforcement, though the Delaware Supreme Court upheld it in 2017.[[7]](https://courts.delaware.gov/Opinions/Download.aspx?id=252560)