Bid to Stop TransPerfect Sale Nixed by Federal Court (Corrected)

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By Yin Wilczek

A lawsuit filed by two TransPerfect Global Inc. shareholders—part of an ongoing struggle to prevent the company from being sold—was dismissed by a federal court in Delaware.

The U.S. District Court for the District of Delaware ruled Sept. 26 that it had no jurisdiction to consider the case under a doctrine that bars federal courts from hearing matters that are essentially appeals from state-court rulings ( Shawe v. Pincus , 2017 BL 340251, D. Del., No. 17-277-GMS, 9/26/17 ).

The shareholders—mother and son Shirley and Philip Shawe—together own 50 percent of the New York-based translation software provider. In 2015, the Delaware Chancery Court ruled that the company should be sold because its two chief executives, Phil Shawe and Elizabeth Elting, can’t get along.

Elting, who doesn’t oppose the sale, owns 50 percent of the company.

The chancery court ordered the company’s sale under a state law provision more commonly used for nonsolvent entities. Its decision was affirmed by the Delaware Supreme Court in February.

The Shawes sued TransPerfect’s court-appointed custodian and the Delaware Secretary of State in the district court in March, after the Delaware Supreme Court’s ruling. They argued that the court-ordered sale violates the Takings and Due Process clauses of the U.S. Constitution.

(Removed paragraph incorrectly stating that Shirley Shawe has asked the U.S. Supreme Court to review her case. Shirley Shawe hasn’t yet petitioned the high court.)

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

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