Court orders TransPerfect CEO to pay $7.1M sanctions
Source: delawareonline.com
TL;DR
- Delaware Chancery Court Chancellor Andre Bouchard ordered TransPerfect co-founder Phil Shawe to pay co-founder Liz Elting $7.1 million in sanctions.[[1]](https://www.delawareonline.com/story/money/2016/08/22/court-orders-transperfect-ceo-pay-71m-sanctions/89098642)
- The sanctions cover one-third of Elting's trial fees from late 2014 to mid-2015 plus all fees for her sanctions motion, after a two-day hearing.[[2]](https://www.forbes.com/sites/katiasavchuk/2016/07/20/court-sanctions-transperfect-cofounder-phil-shawe-for-lying-under-oath-destroying-evidence)[[3]](https://courts.delaware.gov/opinions/download.aspx?id=243890)
- Shawe's "unusually deplorable behavior" included deleting laptop files, mishandling phone evidence, accessing Elting's emails, and lying under oath.[[4]](https://apnews.com/transperfect-co-founder-hit-with-7-1-million-in-sanctions-052071c4857e4771b14473e175780dbd)[[5]](https://courts.delaware.gov/Opinions/Download.aspx?id=319730)
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
- Bouchard cited Shawe's intentional deletion of about 19,000 files from his laptop the day before forensic imaging, despite a court order.[[5]](https://courts.delaware.gov/Opinions/Download.aspx?id=319730)
- Shawe remotely accessed Elting's computer at least 44 times, viewing roughly 19,000 Gmails including 12,000 privileged ones with her lawyers.[[5]](https://courts.delaware.gov/Opinions/Download.aspx?id=319730)
- He failed to preserve phone texts with employees and lied repeatedly under oath in interrogatories, depositions, trial, and an affidavit to cover it up.[[3]](https://courts.delaware.gov/opinions/download.aspx?id=243890)
- Sanctions amount to 33% of Elting's fees for merits trial (December 2014-August 2015) plus 100% for the sanctions motion and hearing.[[3]](https://courts.delaware.gov/opinions/download.aspx?id=243890)
- Shawe had to pay within 10 business days; he vowed to appeal, calling the ruling baseless.[[1]](https://www.delawareonline.com/story/money/2016/08/22/court-orders-transperfect-ceo-pay-71m-sanctions/89098642)
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)