The head of a lobbying group has filed suit in New York state court to halt an inquiry into alleged leaks of bidder information and other details related to the forced sale of TransPerfect, a provider of translation software, which has been ordered by a Delaware court.
Chris Coffey, campaign manager of Citizens for a Pro-Business Delaware Inc.—which was organized to represent the interests of TransPerfect workers, told a New York judge on Tuesday that a discovery order, signed earlier this month by Delaware Court of Chancery Chancellor Andre G. Bouchard, was overly broad and unrelated to a lawsuit that resulted in the forced sale.
The information demands in the subpoena documents include documents and communications among Coffey, his employer—New York-based public policy firm Tusk Strategies Inc.—and TransPerfect employees. Coffey would also be required to provide oral testimony, according to court filings.
“The subpoenas that petitioners challenge are designed to chill civil discourse on a matter of public importance,” he said in a petition filed in Manhattan Supreme Court.
Bouchard approved the order Aug. 1, after an attorney for court-appointed custodian Robert Pincus said unauthorized disclosures were being used to disrupt the sale process.
According to court documents, it seeks to identify a TransPerfect employee or employees who allegedly leaked the identity of a purported bidder, as well as compensation paid to people acting as advisers for the sale.
Pincus, a Skadden, Arps, Slate, Meagher & Flom attorney appointed to oversee the sale process, requested the discovery after Citizens published two press releases, including one that named TransPerfect competitor Lionbridge Technologies Inc. as a potential buyer. Under Coffey’s direction, Citizens has been actively campaigning against the sale.
Pincus told Bouchard last month that he had not given TransPerfect workers permission to share the sensitive information. Its dissemination, he said, could jeopardize TransPerfect’s sale.
“The matter is serious now and risks becoming more serious as the sales process continues to quickly unfold,” he said through his attorney Jennifer Voss, also a partner with Skadden. “Indeed, there is a troubling, escalating pattern of disclosure of confidential information that needs to be stopped.”
Coffey said the requests were not “material and necessary” to issues being litigated in Delaware, and he disputed Pincus’ assertion that the alleged disclosures threatened to derail the sale.
“This contention, however, relies completely on the unsupported and untested conclusion that any disclosures actually harmed the sale process,” he said in the petition. “We are unaware of any evidence supporting this conclusion and, if anything, the sale process appears to be moving forward without impediment.”
Coffey also noted that most of the information used in the press releases was already available to the public, pointing to a March filing by Pincus that outlined $3.5 million in fees he received associated with his work on the TransPerfect sale and to two news articles that both stated Lionbridge would be involved as a bidder.
Coffey declined to comment beyond the filing, but his group has been vocal in its opposition to Bouchard’s decision in 2015 to break up the firm after feuding between its two founders, Elizabeth Elting and Philip Shawe, had thrown its governance into a hopeless state of gridlock.
Citizens launched a sophisticated public relations campaign and lobbied Delaware lawmakers to pass legislation curbing the Chancery Court’s ability to order similar sales. The organization has also resisted previous attempts by Pincus to access its funding, arguing that the efforts infringed on worker’s First Amendment rights.
Still, Bouchard’s decision was upheld by the Delaware Supreme Court, and the company’s sale is moving forward, according to papers filed in state and federal court. Earlier this month, Bouchard blocked a last ditch effort by Shawe’s mother, Shirley Shawe, to force a shareholder meeting that the Shawes said would avert the need for a sale.
On Tuesday, Coffey said Pincus’ demands had little to do with exposing leaks within TransPerfect’s ranks and only risked escalating disputes on both sides.
“Rather, they are a fishing expedition that can only lead to more peripheral skirmishes with TransPerfect employees, Citizens, Coffey and Tusk,” he said.
“Because the subpoenas seek information that is irrelevant to the underlying action and to the sale of the company, and because the custodian has failed to make any showing to the contrary, the court should grant petitioners’ motion to quash.”