TransPerfect Wins Legal Victory Over Skadden Arps as Chancellor “Strikes from the Record” a Third Failed Contempt Bid

Delaware Chancery Court Denies Relief Filed for by Ex-Custodian Robert Pincus and Jennifer Voss of Skadden and Strikes the Motion Amid Multiple Accusations of Over-Billing

TransPerfect, the world’s largest provider of language and technology solutions for global business, extended its string of legal victories in Chancery Court yesterday when Chancellor Kathaleen McCormick struck another failed contempt motion filed by Skadden Arps and former Custodian and fiduciary Robert Pincus from the docket.

After years of TransPerfect requesting an end to the custodianship, the Chancery Court recently discharged Pincus as Custodian after being faced with credible evidence of over-billing in his role as a court-appointed fiduciary. As a Custodian acting for the State of Delaware, Pincus continued to bill millions of dollars per quarter for over three years past the closing date of TransPerfect’s ownership consolidation. Pincus has come under intense scrutiny for conducting a questionable public auction with estimated costs of over $50 million, as he appears to have incentivized a participant to remain in the auction process by secretly agreeing to compensate that “bidder” by up to $4 million under certain circumstances. Other evidence suggests that Pincus may have utilized the presence of this bidder to create the illusion of competition, omitted or hid key facts regarding the value of other bids, and improperly inflated the auction price—despite his role as state actor and court-appointed officer.

Before the auction, Pincus and Skadden were accused of billing misconduct separately by at least three different C-level officers of TransPerfect. After the auction, Pincus is further alleged to have created the “perverse incentive” to manufacture billing opportunities paid for by TransPerfect—including this week's losing decision. This pattern is consistent with the protestations of other entities forced to utilize Pincus’s services in an unrelated matter for Citgo—where complaints about the propriety of his billing have been the subject of litigation.

TransPerfect contends that the Chancery Court has countenanced an untenable situation where Pincus and Jennifer Voss have been given a blank checkbook to pay themselves for the manufacture of disputes regardless of merit. This incentive has driven the Custodian and Skadden to take conflicting, losing, meritless, and frivolous positions—and in doing so, improperly inflate billable hours charged at rates of approximately $2,000 per hour. By way of example, TransPerfect has not received any services or other value from Pincus or Skadden this entire year, but nonetheless has been billed over $3.4 million in 2021 alone.

“Three years after their assignment ended, Robert Pincus and Jennifer Voss are still billing TransPerfect—including for losing motions—catapulting the total expenses for the custodianship well over the $50 million mark. Skadden and Pincus’s unwanted ‘help’ is taking vast sums of money from the pockets of TransPerfect’s 7,500 working families, including funds that would otherwise be available for use toward benefits, wages, and other income. I view this as corruption and constitutional violations which TransPerfect can no longer abide,” stated Phil Shawe, President, CEO, and Founder, who was forced by the Chancery Court to pay a $9 million commission to buy back the company he founded, including a percentage fee on the shares he already owned.

Martin Russo, an attorney for the company, added that, “The victory on the contempt motion is bittersweet because it only precipitates another legal battle, as Pincus now seeks to charge TransPerfect for work performed on yet another losing motion. It’s a vicious circle because, win or lose, Pincus and Skadden will seek to charge TransPerfect for that activity. With no end in sight, it is clear that Delaware’s Chancery Court system remains archaic and broken, and equity is an elusive concept for those who are not among the elite and powerful Wilmington law firms.”

About TransPerfect

TransPerfect is the world’s largest provider of language and technology solutions for global business. From offices in over 100 cities on six continents, TransPerfect offers a full range of services in 170+ languages to clients worldwide. More than 5,000 global organizations employ TransPerfect’s GlobalLink^® technology to simplify management of multilingual content. With an unparalleled commitment to quality and client service, TransPerfect is fully ISO 9001 and ISO 17100 certified. TransPerfect has global headquarters in New York, with regional headquarters in London and Hong Kong. For more information, please visit our website at www.transperfect.com.

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