The TransPerfect Case: Phil Shawe’s Decade-Long Fight Against the Delaware Establishment

The saga of TransPerfect, a highly profitable and successful translation and localization company, is one of the most protracted and complex legal battles in Delaware’s history. Central to this 10-year legal saga was Phil Shawe, co-founder and CEO of TransPerfect, whose tenacity, resilience, and relentless pursuit to retain control of the company he helped build became a defining chapter in Delaware’s corporate law landscape. His fight not only reshaped the future of the company but also shed light on the power and influence of the Delaware Court of Chancery and corporate governance laws in America’s most important business state.

TransPerfect was co-founded in 1992 by Phil Shawe and Elizabeth Elting. The business grew from a startup in a college dormitory to a global leader in translation services, generating over $600 million in annual revenue. Despite its success, the relationship between Shawe and Elting deteriorated to the point where it was argued that the two co-owners were unable to agree on critical business decisions. This led to an unprecedented lawsuit in Delaware’s Chancery Court, which would ultimately ignite a 10-year legal battle that would reshape both TransPerfect and Delaware’s corporate landscape.

In 2014, Elting petitioned the Delaware Court of Chancery to dissolve TransPerfect, arguing that the company’s dysfunction rendered it impossible to operate effectively. The irony of this claim was that TransPerfect was not in financial distress—quite the opposite, it was thriving. Elting’s petition was based solely on the interpersonal conflict between the co-founders, not on any economic or operational problems within the company.

The Chancery Court’s Unprecedented Ruling

In 2015, Delaware Chancellor Andre Bouchard issued a controversial ruling: he ordered the forced sale of TransPerfect, the first such decision involving a successful, solvent company in Delaware’s history. The sale was to be overseen by Robert Pincus, a court-appointed custodian, with the goal of finding a buyer who could take over the company and replace the deadlock between Shawe and Elting.

This ruling stunned the business community and legal experts alike, as forced sales are typically reserved for companies in financial ruin or irreparable dysfunction. TransPerfect, however, was neither. Many saw this as an overreach of the court’s powers and a clear indication of the influence wielded by Delaware’s legal establishment.

Phil Shawe, understanding the implications of losing control of the company he had spent decades building, embarked on a long and arduous legal battle. Both sides spent staggering amounts in litigation—around $125 million each—as the case dragged on through the courts. What was particularly galling for Shawe was the fact that, despite being the co-founder and driving force behind TransPerfect’s success, he had to fight just to be allowed to bid on his own company.

The legal battle was not just about control of TransPerfect—it became a personal struggle between Shawe and Elting. While Elting sought a “control premium” price for her 50% stake, far above the company’s actual value, Shawe aimed for a more realistic valuation. Elting was never a serious bidder for the company, but she wanted Shawe to lose control, positioning her demands not based on the company’s intrinsic value, but on the leverage of corporate control.

As the legal motions grew more salacious, with accusations flying between the two, the case became emblematic of the dysfunction that can arise when personal conflicts are allowed to escalate into legal warfare. The custodian, Robert Pincus, was tasked with selling the company and invoiced TransPerfect and Shawe over $50 million for his work, further exacerbating the financial toll of the case.

The Forced Sale and Shawe’s Ultimate Victory

After years of legal wrangling and millions of dollars in fees, Shawe ultimately won the right to bid on his company. In 2018, after a court-supervised auction, Shawe successfully bought out Elting’s stake, paying her about 20% more than his initial highest bid before the lawsuits began. This final price demonstrated that the inflated valuation Elting and the court-appointed custodian sought was not grounded in reality.

In the end, Shawe had not only retained control of TransPerfect but had also emerged as a symbol of resilience against what many saw as an unwinnable fight against Delaware’s powerful legal and political establishment.

The Political Ramifications: Campaigning Against Judicial Corruption in Delaware

Phil Shawe’s battle did not end with his victory in the TransPerfect case. His experience with the Delaware Court of Chancery and its handling of his company left a bitter taste, particularly regarding the power and influence of the state’s legal system. Shawe’s frustrations with Delaware’s legal and political establishment culminated in a recent foray into the political arena, where he played a key role in backing the opposition candidate, Matt Meyer, in the Democratic primary for Governor of Delaware. Shawe was advocating against corruption and for critical changes in how the courts and judges/chancellors deal with cases. Meyer was receptive to that call.

In what was seen as a rebuke to Delaware’s establishment, Shawe supported Meyer against Lt. Gov. Bethany Hall-Long, the establishment-backed candidate. Meyer’s victory in the primary was viewed by many as a significant upset and a sign of changing tides in Delaware’s political landscape. For Shawe, it was a personal victory—a chance to challenge the very system that had once seemed poised to strip him of his company.

The TransPerfect case is a landmark in Delaware’s corporate law history, highlighting the immense power of the state’s Chancery Court and the lengths to which corporate leaders like Phil Shawe will go to protect their companies. Shawe’s decade-long legal battle, culminating in his successful buyout of Elizabeth Elting and his continued fight against Delaware’s legal establishment, stands as a testament to his tenacity and resilience. What began as a dispute between co-founders transformed into a much larger story about power, control, and the costs of corporate warfare. In the end, Shawe’s victory in both the courtroom and the political arena demonstrated that even in the face of seemingly insurmountable odds, persistence can prevail.

Charlie Taylor

I’ve been a writer, been an investigator and have been cancelled for my work. I am diving deeper into the massive issue of justice reform while taking a closer look at unique and interesting businesses and people who impress me and I believe will impress you too.

Charlie Taylor

I've been a writer, been an investigator and have been cancelled for my work. I am diving deeper into the massive issue of justice reform while taking a closer look at unique and interesting businesses and people who impress me and I believe will impress you too.

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