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As New Court Documents Show Both Sides of TransPerfect Case Agree Skadden Arps Must Disclose Reasoning Behind $14 Million in Legal Fees as Company Custodian, Citizens for a Pro-Business Delaware Continues Call for Chancery Transparency

January 28, 2020 GMT

WILMINGTON, Del., Jan. 28, 2020 /PRNewswire/ -- Following a motion filed in the Delaware Court of Chancery last week by TransPerfect Global, Inc. revealed the law firm of Skadden Arps has billed the translation services company for upwards of $14 million in undisclosed legal fees since being appointed the company’s custodian, new documents show both sides of the TransPerfect dispute agree the legal fees should be explained.

Per a letter filed with the court on behalf of TransPerfect CEO Phil Shawe, lawyers from Potter Anderson, as counsel for Elizabeth Elting, “requested that we promptly send them unredacted copies of recently filed documents that had not been served on them.” The letter continues, “we sympathize with Ms. Elting’s plight and agree that as both a party and a payor of Skadden’s heretofore unmonitored bills she has an interest in the matter and should have free access to the contents. As Mr. Shawe has pointed out to the Court, billing information in fee requests is not confidential under Delaware law. ...That is, when court-ordered fees are sought, particularly by a court-appointed officer, information such as hourly billing rates, the number of hours billed on a given task, and the total hours billed in a litigation is not confidential competitively sensitive information. Similarly, the names of the attorneys performing the work and a brief summary of the work performed is not confidential proprietary information. These documents should be public as in every other case.”

According to TransPerfect’s motion last week, over two years after the TransPerfect case was settled in 2015, the custodian in the case, Robert Pincus, has continued to bill the company every month for undisclosed services, including his own $1,475 an hour fee. According to TransPerfect’s motion, his responsibilities remain unclear, and any efforts to ascertain the substance of his work on behalf of TransPerfect have been met with silence. The Chancery Court has kept all invoices and description of services under seal – allegedly to protect the sale process, which ended over two years ago.

The recent developments in the TransPerfect case highlight the need for new transparency measures in Delaware’s secretive and beleaguered Chancery Court.

Said Chris Coffey, Citizens for a Pro-Business Delaware’s Campaign Manager, “It’s truly disturbing that these Skaddenomics are so shady both sides of this legal dispute are now demanding to see how they’ve gotten away with it for so long. Chancellor Andre Bouchard has created a system where his Chancery court is free to violate their own rules to direct millions of dollars to friends at his old law firm. It’s completely unacceptable, and exactly the sort of behavior that our over 5,000 members are committed to fighting. When both sides of a legal dispute stand in agreement, and the court stands by its secretive process protecting no one but the law firm they appointed, the system is broken. We once again call on the Delaware legislature to advance the legislation before them that would create a fairer and more transparent Chancery Court by requiring all custodian’s fees to be disclosed. It’s the very least they can do if we are to continue allowing judges to give their old buddies handouts at the expense of Delaware taxpayers.”

Among CPBD’s reforms is legislation, introduced to the Delaware State Legislature, that would bring much-need transparency to the Chancery Court, requiring appointed custodians to itemize and publicly disclose a complete accounting of the costs they’ve passed on to the companies under their control so that the public, and the companies themselves, know how their money is being spent. The legislation follows Delaware Chancery Court Chancellor Bouchard’s abuse of court rules, as he appointed his last employer, Skadden Arps, and ruled that TransPerfect – which was incorporated in Delaware and has nearly 4,000 employees globally – should be sold as a result of an internal dispute between the company’s ownership. Since, Skadden Arps has received a significant amount of the $250 million that was spent on the case.

As Delaware dropped 10 spots to number 11 according to the Chamber of Commerce in its judicial rankings last year, CPBD announced a new platform to dramatically improve ethics, transparency, and accountability in the State’s Government and Chancery Court. The full platform is available here.

Contact: Chris Coffey, ccoffey@tuskholdings.com

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SOURCE Citizens for a Pro-Business Delaware