Submitted: November 18, 2014
Kevin R. Shannon, Esquire Berton W. Ashman, Jr., Esquire Christopher N. Kelly, Esquire Potter Anderson & Corroon LLP
Kurt M. Heyman, Esquire Melissa N. Donimirsky, Esquire Proctor Heyman LLP
Gregory P. Williams, Esquire Lisa A. Schmidt, Esquire Robert L. Burns, Esquire Richards, Layton & Finger, P.A.
Susan Wood Waesco, Esquire Morris Nichols Arsht & Tunnell LLP
Andre G. Bouchard Chancellor
On November 18, 2014, I took under advisement after oral argument the motion of plaintiff Elizabeth Elting ("Elting") for the appointment of a temporary custodian "with authority to resolve deadlocks relating to the management of the business and affairs of TransPerfect Global, Inc. ["TPG" or the "Company"] and its wholly owned subsidiaries . . . pending the disposition of the parties' claims in Civil Action Nos. 9686-CB and 9700-CB." A trial in those actions has been scheduled on an expedited basis to begin on February 23, 2015, to resolve, among other things, Elting's petition for the appointment of a custodian under 8 Del. C. § 226(a)(2).
As discussed below, although Elting's motion raises a number of issues that may warrant the appointment of a custodian after trial, I do not believe based on the present record that a temporary custodian is urgently needed for the immediate protection of TPG during the relatively short period of time before a trial will be held in this action. For that reason, Elting's motion for the appointment of a temporary custodian is denied.
1. Legal Standard
Section 226(a)(2) of the Delaware General Corporation Law provides for the appointment of a custodian to resolve a deadlock when:
The business of the corporation is suffering or is threatened with irreparable injury because the directors are so divided respecting the management of the affairs of the corporation that the required vote for action by the board of directors cannot be obtained and the stockholders are unable to terminate this division . . . . 8 Del. C. § 226(a)(2).
Elting acknowledges that, because she seeks the appointment of an interim custodian until a trial can be held, she also must demonstrate that the "appointment is urgently needed for the immediate protection of the corporation." Moore v. C.H.M. ...