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Oct. 5 — TransPerfect Global Inc. employees trying to prevent the sale of the translation services company recommended changes to the state statute allowing deadlocked companies to be sold.
The proposal—sent to the Delaware Bar Association's Corporation Law Section—would only allow the Delaware Chancery Court to force the sale of a deadlocked company after a three-year moratorium in which other remedies are tried. If the alternatives don't work and the company is still deadlocked after that time, the sale could proceed.
Delaware's General Assembly typically doesn't alter the state's corporate law statutes unless such changes have been recommended by the Corporation Law Section.
Norman Monhait, a director of Rosenthal, Monhait & Goddess PA who is a member of the section and its previous chair, said the section's governing council hasn't yet discussed what, if any, steps it will take with respect to the proposal from the Citizens for a Pro-Business Delaware. Typically, the council doesn't complete its legislative recommendations until the spring and doesn't comment in the interim, he said.
Citizens for a Pro-Business Delaware campaign manager Chris Coffey said in an Oct. 5 statement that the group is eager to hold discussions with the section. He said the group also continues to discuss the matter with state officials. “We are confident we can, and will, find a solution in the weeks and months ahead,” he said.
Coffey is an ex-aide to former New York Mayor Michael Bloomberg, founder of Bloomberg BNA’s parent company Bloomberg LP.
In August 2015, the chancery court ordered the sale of TransPerfect despite a finding that the company was profitable (34 CARE, 8/21/15). Chancellor Andre G. Bouchard said the “unusual relief” was warranted because TransPerfect's two CEOs, Philip Shawe and Elizabeth Elting, had become so deadlocked that they were harming the company.
Shawe has opposed that ruling and another decision approving a court-appointed custodian's plan to sell the company through a “modified auction” (119 CARE, 6/21/16). Most recently, the court Aug. 19 directed Shawe to pay more than $7.1 million to reimburse Elting's legal fees because of his misconduct during their dispute (163 CARE, 8/23/16).
The Delaware Supreme Court is reviewing the chancery court's decisions (165 CARE, 8/25/16).
Citizens for a Pro-Business Delaware, which was created in April in response to Bouchard's ruling, was behind a resolution introduced in the last legislative session and tabled June 30 that asks the Delaware Bar Association to review the state's business entity laws (128 CARE, 7/5/16).
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Citizens for a Pro-Business Delaware's statement and proposal are available at http://www.prnewswire.com/news-releases/citizens-for-a-pro-business-delaware-submits-white-paper-to-the-delaware-bar-association-300339977.html.
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