01 Nov TransPerfect Wins Decisive Victory in Delaware Chancery Court Custodian Billing Dispute
Skadden Ordered to Produce Billing Detail to Substantiate Fees
NEW YORK & WILMINGTON, Del.–(BUSINESS WIRE)–In a decisive victory for TransPerfect and CEO Phil Shawe, Chancellor Andre Bouchard ordered Skadden, Arps, Slate, Meagher & Flom to produce the actual billing detail allegedly supporting its fees so that they may be challenged, stating that “in the future, the custodian must include in its fee petition a copy of an invoice or some other form of time detail that includes the date on which work was performed, a description of the task performed, the billing rate, and the amount of time incurred.”
Further, Chancellor Bouchard threw out his former law firm’s demand that the Chancery Court hold the company in contempt for refusal to pay fees without bills. In doing so, the Chancellor rebuffed Skadden’s initiative to force TransPerfect to pay hidden invoices totaling many tens of thousands of dollars for undisclosed “legal services” nearly two years after the company was sold at a forced auction. Skadden was instructed to bear its own fees related to the billing issues, further establishing that TransPerfect should only be charged for work that is authorized, reasonable, and necessary.
Recognizing the danger of having the Chancery Court impose unchecked limitless legal fees on any business, TransPerfect CEO Phil Shawe stated, “TransPerfect’s victory was a major win for transparency and openness in the Delaware courts. No one should have a blank checkbook to access our company’s coffers, including the Chancery Court’s agents.” Shawe continued, “We are grateful that the Chancellor agrees with our position and is taking this important step toward transparency.”
Based on winning its requested relief by way of order in the October 21 hearing, TransPerfect chose to voluntarily dismiss its lawsuit in Nevada to evaluate the invoices that Skadden has now been compelled to produce over their vehement objections. TransPerfect’s withdrawal in Nevada came after its Delaware victory but prior to the Chancellor’s deadline to impose sanction-related fines for seeking to exercise its rights in an “unfamiliar court.”
TransPerfect contends that it was permitted to seek clarity in the courts of its home state of Nevada with respect to the fees that ex-Skadden Partner Robert Pincus sought based on the “Director Indemnification Agreement” drafted by his firm and signed by Mr. Pincus in August 2015. That contract established procedures requiring the production of itemized bills and allows for disputes to be resolved in any court of competent jurisdiction. TransPerfect is appealing the order related to the Nevada suit.
Chancellor Bouchard’s decision indicates that he agrees with TransPerfect’s view that the custodian’s law firm must present properly itemized invoices to ensure transparency and fairness. From the bench, Chancellor Bouchard remarked that he was “sympathetic to some of the practical concerns the company has raised in its opposition papers.”
“I’m very happy that the court finally has agreed to give us the tools to ensure the company is treated fairly,” Martin Russo of Kruzhkov Russo, Counsel for Mr. Shawe, said. “It seems that the eyes of the Nevada Court on the matter may have had some positive effects.”
“TransPerfect’s victory was a major win for transparency and openness in the Delaware courts,” Mr. Shawe said. “Our actions leading to today’s decision helped raise the needed awareness for the matter. Skadden’s billing, which remained hidden for too long, will now be subject to some level of review.”
TransPerfect is the world’s largest provider of language and technology solutions for global business. From offices in over 90 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® Product Suite 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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