ORDER DENYING APPLICATION FOR INTERLOCUTORY
action is the latest installment in a long-running dispute
between the co-founders of TransPerfect Global, Inc.
("TPG" or the "Company"): Elizabeth
Elting and Philip Shawe ("Shawe"). Elting owns
fifty shares of TPG. Shawe and his mother, Shirley Shawe
("Ms. Shawe"), together own the remaining fifty
outstanding shares of TPG, with Ms. Shawe owning one share.
August 13, 2015, the Court granted Elting's petition to
appoint a custodian ("the Custodian") to sell TPG
under 8 Del. C. § 226 in order to remedy the
dysfunction in the co-founders' management of the Company
and the deadlocks at the board and stockholder level that
were proven at trial.
June 21, 2016, the Court accepted, with certain
modifications, the Custodian's recommendation for a
proposed plan of sale for the Company. An implementing
order was entered on July 18, 2016 (the "Sale
Order"). On February 13, 2017, the Supreme Court
affirmed the post-trial decision and the Sale
March 12 and April 18, 2017, Ms. Shawe made two different
proposals that contemplated providing Elting with a proxy to
vote Ms. Shawe's single share of TPG to elect directors
of the Company as part of a purported effort to break the
stockholder deadlock at TPG. Both proposals, however, were
subject to various conditions involving changes to the
governance and/or capital structure of TPG.
April 20, 2017, after Elting had rejected both proposals, Ms.
Shawe filed this action, asserting a single claim under 8
Del. C. § 211(c) to compel TPG to hold an
annual meeting of its stockholders (the "Section 211
Action"). Simultaneous with filing her complaint, Ms.
Shawe filed a motion for expedited proceedings. As part of
her Section 211 Action, Ms. Shawe sought highly unusual
relief, namely entry of an order to change the Company's
capital structure by requiring it to issue the remaining
authorized, but unissued, shares of the Company's stock
pro rata to the current stockholders before the annual
April 25, 2017, Elting filed a motion to enforce the Sale
Order and for sanctions in C.A. Nos. 9700-CB and 10449-CB.
April 26, 2017, the Custodian filed a letter in response to
the filing of the Section 211 Action and Elting's motion,
expressing his belief that Ms. Shawe's proposal was
inconsistent with the Sale Order and seemed to be futile, and
that convening a stockholders' meeting now may inject
uncertainty into the sale process given "the Shawes'
prior conduct and stated intent to upend the sale
June 2, 2017, at the conclusion of a hearing on the
outstanding motions, the Court ordered the parties to engage
in mediation with former Chancellor Chandler.
August 4, 2017, after the mediation reached an impasse, the
Court issued a letter decision granting Elting's motion
to enforce the Sale Order, denying Elting's motion for
sanctions, and denying Ms. Shawe's motion to expedite
(the "August 4 Ruling"). In the letter decision, I
found, among other things, that:
(a)the "clear and admitted objective of the Section 211
Action is to remove the Custodian and to end the sale
process, which is inconsistent with the Sale Order's
directive to cooperate fully with the Custodian and to not
impede or undermine, or intend to impede or undermine, the
(b)ordering a stockholders' meeting "would be a
futile exercise" in any event, particularly given Ms.
Shawe's insistence on conditioning her grant of a proxy
on the implementation of changes to the Company's
governance and/or capital structure that Elting already had
(c)convening a stockholders' meeting at this juncture
could jeopardize the sale process, which is expected to
conclude in the near future.
on these findings, I concluded that TPG did not need to
respond to the Section 211 Action at that time.
August 14, 2017, Ms. Shawe applied for an interlocutory
appeal of the part of the August 4 Ruling denying her motion
to expedite the Section 211 Action. Ms. Shawe has not sought
to appeal the part of the August 4 Ruling granting
Elting's motion to enforce the Sale Order. On August 24,
2017, the ...