Shirley Werner Kornreich (NYLJ/Rick Kopstein)
A New York Supreme Court justice has dismissed three lawsuits related to the forced sale of TransPerfect Global Inc. for trying to rehash claims that had already been decided in Delaware.
Commercial Division Justice Shirley Werner Kornreich slammed the suits, filed by TransPerfect co-founder and CEO Philip R. Shawe and his mother Shirley Shawe, as borderline “frivolous” and an attempt to revive arguments that have been squarely rejected by Delaware’s Court of Chancery and Supreme Court.
“It is time for this saga to end,” Kornreich wrote.
Her June 30 ruling was the latest to criticize Philip Shawe’s conduct in long-running litigation over the future of the profitable translation-services company that he had founded with Elizabeth Elting, the firm’s other executive and Shawe’s one-time fiancée. But it also came with a warning against pursuing similar claims in the future.
“Philip and Shirley Shawe are cautioned that the maintenance of future suits in this court that are barred by the outcome of the Delaware litigation may result in sanctions and a filing injunction,” Kornreich said in a blunt 29-page opinion.
The suits included two double-derivative actions filed by Shirley Shawe on behalf of TransPerfect, accusing the company’s advisers of aiding and abetting breaches of fiduciary duties by Elting in order for her to gain leverage in the litigation with Philip Shawe.
Shirley Shawe, a 1 percent owner in the firm, had moved to intervene in the underlying case in Delaware shortly after Chancery Court Chancellor Andre Bouchard issued a 104-page opinion in 2015 granting Elting’s request to appoint a custodian to oversee the forced sale of the deadlocked company. But Bouchard denied the request, finding that she effectively stood in her son’s shoes and was thus bound by the holdings in the Delaware action.
Those rulings, which were upheld by the Delaware Supreme Court earlier this year, precluded Shirley Shawe from arguing her case in New York, Kornreich said.
“This court sees no reason to countenance this improper litigation tactic, especially when the patently baseless claims Shirley asserts in this court would fail on the merits for the same reason they were rejected in Delaware,” the judge said, adding that the claims would be blocked anyway because of Shawe’s unclean hands.
Philip Shawe, who has fought Bouchard’s findings both in the courtroom and in the press, was the target of a $7 million sanctions ruling in Delaware for his “unusually deplorable” behavior, which included gaining access to Elting’s emails, attempting to destroy evidence and repeatedly lying under oath.
In one instance, according to court documents, Shawe even tried to have Elting criminally prosecuted by naming her his ex-fiancée on a domestic incident report over a minor altercation in her office, more than 17 years after they had split as a couple.
In New York, he accused Elting and her Kramer Levin Naftalis & Frankel attorneys of lying in order to obtain a temporary restraining order in earlier litigation. The issue, however, had already been considered and disposed of in both states because the misrepresentations Shawe cited, while accurate, were not material to the case, Kornreich said, noting her frustration.
“This is far more of an abuse of process than the immaterial accusations Shawe lodges against Elting,” she wrote.
Shawe on Thursday dismissed Kornreich’s ruling as “more fruit of Chancellor Bouchard’s poisonous tree,” and vowed to keep fighting.
“It will be appealed to the fullest extent, and TransPerfect will be vindicated in the end,” he said in an emailed statement.