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TransPerfect Global Inc. may be able to avoid a court-ordered sale intended to resolve a deadlock between the company’s two largest shareholders.
Shirley Shawe March 15 offered to vote her 1 percent stake in TransPerfect on behalf of one of the company’s other owners, Elizabeth Elting, who owns 50 percent of the shares. Doing so would end the deadlock between Elting and Shirley Shawe’s son, Phil Shawe, who owns 49 percent of the shares.
The New York-based translation software company is facing a forced sale ordered by the Delaware Chancery Court. The Delaware Supreme Court upheld the ruling, declining to address an argument by Shirley Shawe’s attorney, Harvard law professor Alan Dershowitz, that the sale would be an unconstitutional “taking” of her personal property.
“I will vote with Liz to elect directors and adopt a plan to ensure that director deadlock can never exist in the future,” Shirley Shawe said in a statement.
According to the statement, Shirley Shawe’s support would allow Elting to elect five new board members with staggered terms and the ability to break shareholder deadlocks in future elections.
Phil Shawe didn’t immediately respond to a request for comment. He and Elting are former lovers who founded TransPerfect in 1992 while students at New York University.
The Delaware Supreme Court Feb. 13 upheld chancery judge Andre Bouchard’s decision that the company should be sold due to intractable conflict between its co-owners, who also are the company’s only board members. The court also upheld $7.1 million in sanctions Bouchard levied against Phil Shawe for misconduct during proceedings.
The case was closed March 1 ( Shawe v. Elting , Del., No. 423, 2016, closed 3/1/17 ).
Phil Shawe has vowed to appeal the case to the U.S. Supreme Court.
Dershowitz told Bloomberg BNA in a telephone call March 15 that his client’s decision to eliminate the deadlock by offering to cast her vote with the 50-percent shareholder “totally eliminates any basis for a forced sale of the company.”
“With the end of the deadlock, there is no conceivable authority for taking the property of the Shawes,” Dershowitz said.
Elting didn’t immediately respond to emails on March 15 seeking comment.
To contact the reporter on this story: Leslie A. Pappas in Philadelphia at LPappas@bna.com
To contact the editor responsible for this story: Yin Wilczek at firstname.lastname@example.org
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