As Skadden Custodian is "in flagrant violation of multiple Court orders," According to TransPerfect Motion, Citizens for a Pro-Business Delaware Slams Chancery for Lack of Transparency
WILMINGTON, Del., Feb. 7, 2020 /PRNewswire/ -- Today, lawyers for TransPerfect Global, Inc. filed a motion in the Delaware Court of Chancery for an order to show cause why the law firm of Skadden Arps – and the firm's court-appointed custodian of TransPerfect Global, Inc., Robert. B. Pincus – should be held in contempt and precluded from submitting untimely fee petitions. The motion follows weeks of criticism of the Court's double standard and lack of transparency by the grassroots organization, Citizens for a Pro-Business Delaware.
Per the new motion filed by counsel for TransPerfect Global, Inc. and CEO Phil Shawe today, "the misconduct is a direct affront to the integrity of the judicial system. Among other bad faith acts, they are intentionally delaying the submission of their monthly fee petitions, which are explicitly required by this Courts orders. If not addressed, the Custodian and Skadden's escalating pattern of abuse risks undermining public confidence in the Court and its appointees. Without a finding of contempt and meaningful sanctions, the Custodian and Skadden will continue to escalate their violations of Court orders in order to obstruct any review or public scrutiny of their billing practices as State actors."
The motion comes after a similar one filed last week revealed the law firm of Skadden Arps has billed the translation services company for upwards of $14 million in undisclosed legal fees since being appointed the company's custodian, recently filed documents also showed both sides of the TransPerfect dispute agree the legal fees should be explained.
Last week, per a letter filed with the court on behalf of TransPerfect CEO Phil Shawe, lawyers from Potter Anderson, as counsel for Elizabeth Elting, "requested that we promptly send them unredacted copies of recently filed documents that had not been served on them." The letter continues, "we sympathize with Ms. Elting's plight and agree that as both a party and a payor of Skadden's heretofore unmonitored bills she has an interest in the matter and should have free access to the contents. As Mr. Shawe has pointed out to the Court, billing information in fee requests is not confidential under Delaware law. ...That is, when court-ordered fees are sought, particularly by a court-appointed officer, information such as hourly billing rates, the number of hours billed on a given task, and the total hours billed in a litigation is not confidential competitively sensitive information. Similarly, the names of the attorneys performing the work and a brief summary of the work performed is not confidential proprietary information. These documents should be public as in every other case."
Over two years after the TransPerfect case was settled in 2015, the custodian in the case, Skadden's Robert Pincus, has continued to bill the company every month for undisclosed services, including his own $1,475 an hour fee. According to TransPerfect's motion, his responsibilities remain unclear, and any efforts to ascertain the substance of his work on behalf of TransPerfect have been met with silence. The Chancery Court has kept all invoices and description of services under seal – allegedly to protect the sale process, which ended over two years ago.
The recent developments in the TransPerfect case highlight the need for new transparency measures in Delaware's secretive and beleaguered Chancery Court.
Said Chris Coffey, Citizens for a Pro-Business Delaware's Campaign Manager, "From day one of being appointed TransPerfect's custodian, Robert Pincus and Skadden Arps have been taking advantage of the company and its thousands of employees by billing them millions of dollars without saying why or what for. These Skaddenomics are so shady, the firm deserves to be held in contempt, otherwise, what is holding firms like this accountable? It's certainly not Chancery Court Chancellor Bouchard, who has been violating his own court's rules and effectively funneling over $14 million dollars to friends at his old law firm.
"When both sides of a legal dispute stand in agreement, and the court stands by its secretive process protecting no one but the law firm they appointed, the system is broken. We once again call on the Delaware legislature to advance the legislation before them that would create a fairer and more transparent Chancery Court by requiring all custodian's fees to be disclosed. It's the very least they can if we are to continue allowing judges to give their old buddy's handouts at the expense of Delaware taxpayers."
Among CPBD's reforms is legislation, introduced to the Delaware State Legislature, that would bring much-need transparency to the Chancery Court, requiring appointed custodians to itemize and publicly disclose a complete accounting of the costs they've passed on to the companies under their control so that the public, and the companies themselves, know how their money is being spent. The legislation follows Delaware Chancery Court Chancellor Bouchard's abuse of court rules, as he appointed his last employer, Skadden Arps, and ruled that TransPerfect – which was incorporated in Delaware and has nearly 4,000 employees globally – should be sold as a result of an internal dispute between the company's ownership. Since, Skadden Arps has received a significant amount of the $250 million that was spent on the case.
As Delaware dropped 10 spots to number 11 according to the Chamber of Commerce in its judicial rankings last year, CPBD announced a new platform to dramatically improve ethics, transparency, and accountability in the State's Government and Chancery Court. The full platform is available here.
Contact: Chris Coffey, [email protected]
SOURCE Citizens for a Pro-Business Delaware
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