DOVER, Del., June 16, 2017 /PRNewswire/ -- Philip R. Shawe, Co-Founder & Co-CEO of TransPerfect, blasted the failure by Delaware Senate's Elections & Government Affairs Committee for not bringing SB53 to the full Senate Floor for debate during the June 14th hearing. Following the 2-2 vote tie, the deciding vote will rest with Senator Brian J. Bushweller (D). The opposing Senators yielded their decision-making power to the Delaware Bar Association, which rejects the idea of changing any business laws in response to any Chancery action, no matter how extreme or draconian. In doing so, the committee did not hear any arguments from the Bar Association on the merits opposing the proposed legislation, in fact, the Bar Association representatives failed to endorse Chancellor Bouchard's decision or his application of law in any way, but stated any legislative action could hurt the Chancery Court's reputation.
Shawe said, "In my opinion, the failure of the Delaware Bar Association to make any arguments on the merits against the proposed bill is telling. I believe that its basing their recommendation solely on potential 'Embarrassment of Court' is, in effect, a dereliction of duty. Legislatures always make the laws and judges interpret those laws; not the other way around. For anyone to claim that a change to laws which affects the Chancery's power would undermine the Court, flies in the face of the General Assembly that actually wrote the laws which govern the Chancery to this day."
"Senate Bill 53 should be weighed on the merits of the bill and whether it could positively or negatively impact stakeholders under Delaware's General Business Laws, not merely whether a legislative change of any kind could potentially hurt the Chancery's reputation."
"As Justice Karen L. Valihura stated, there is no precedent for how the Chancery ruled on the TransPerfect case, and Chancellor Bouchard's most recent decision ordering us to mediate and encouraging the parties to settle outside of the courts only supports the prudence of the TransPerfect Bill and debating the appropriate role of the Court in the case of forcing the sale of a profitable private company," Shawe continued.
In the hearing room, the five senators on the Elections & Government Affairs Committee heard testimony as to whether or not the bill should be voted out of committee. For the opposition, it was clear that they had very little idea of the actual facts of the TransPerfect case and the deficiency in the law that it has brought to light. The Bar Association's spokespeople and the opposing Senators cited incorrect details, and minimized the case as a lover's squabble. If true, then that only reinforces the need for the legislature to refine what was surely its intent -- that the Court not jump to the most draconian remedy -- as a measure of first-resort, but only as a measure of last-resort (if ever). This case could have been solved simply by eviscerating it as the New York Supreme did, or appointing a third-director, a solution that Vice Chancellor Laster recently endorsed in another matter.
In attempts to settle, Philip Shawe has made over 20 offers, including a fully-financed generous offer to buy his co-founder Elizabeth Elting's shares; an offer for Elting to "turn around the names" and buy him out under the same terms; and Shirley Shawe has now eliminated "deadlock" by offering to cede her vote to allow Elting to fully control TransPerfect. Elting has rejected all these offers and more, and has not even countered or presented a legitimate offer of her own. It is clear that Elting is using the Court to satisfy an improper end-goal: Choosing who has the right to be a shareholder. Passing the "TransPerfect Bill" would encourage reasonable fair settlements for disputes in Delaware-based corporations that find themselves with an even number of Directors; conversely, not passing it will allow, and worse incentivize, future litigation and future litigants to be unyielding.
By employing the nuclear option as a first resort, the Chancery providing no compelling reason for Elting to negotiate a settlement. The legislature should base it decision on facts, the predictably of law, and the behavior those laws will promote -- as well as what is best for Delaware, its corporations and its citizens. The opposing senators should not attempt quash such monumentally important bill in committee, merely to defend the reputation of a government institution such as the Chancery Court.
Delawareans have been polled, and 70% believe that the TransPerfect Bill should pass -- and government should not have the power to dissolve and auction off a private, profitable company against the wishes of shareholders. It is my sincere hope that Senator Bushweller breaks the tie in favor of letting the TransPerfect bill be debated fairly and openly on the floor. Bottling up such an overwhelmingly popular bill "in committee" is an outcome that is not only inconsistent with the ideals of a democratic society, but also bad for Delaware, its corporations, and it citizens.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/philip-r-shawe-retorts-on-delaware-legislatures-lapse-in-leadership-on-the-transperfect-bill-300475297.html
SOURCE Philip R. Shawe