Shirley Shawe v. Transperfect Global, Inc.
CA 2017-0306-AGB
| Del. Ch. | Sep 5, 2017Background
- TransPerfect Global, Inc. (TPG) was controlled equally by co‑founders Elizabeth Elting (50 shares) and Philip Shawe (with his mother Shirley Shawe holding 1 share); persistent board and shareholder deadlocks led to litigation.
- After trial, the Court appointed a custodian to sell TPG under 8 Del. C. § 226 and entered a Sale Order implementing a modified auction; the Sale Order was affirmed by the Delaware Supreme Court.
- Shirley Shawe filed a Section 211(c) action seeking to compel an annual shareholder meeting and requested expedited relief; she proposed issuing unissued authorized shares pro rata and contemplated granting Elting a proxy conditioned on governance/capital changes.
- The Court found the Section 211 action was designed to upend the Court‑ordered sale, that convening a shareholder meeting now would be futile given Ms. Shawe’s conditions on any proxy, and that a meeting could jeopardize the sale process; it deferred TPG’s obligation to respond.
- Ms. Shawe sought certification of an interlocutory appeal of the portion of the Court’s August 4, 2017 ruling denying her motion to expedite; Elting and TPG opposed certification.
- The Court denied certification, reasoning interlocutory appeals should be exceptional, the denial was a logical consequence of enforcing the Sale Order, any appeal is more efficiently handled after the sale (and may be moot), and Ms. Shawe suffered no due‑process violation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Court should certify an interlocutory appeal of the denial of expedited relief | Shawe: the denial raises substantial legal issues and conflicts with Delaware law protecting Section 211 rights; interlocutory review is warranted. | Elting/TPG: interlocutory review is unnecessary, disruptive, and the ruling simply enforces the Sale Order; any review can (and should) await the sale outcome. | Denied — interlocutory appeals are exceptional; better to resolve post‑sale (may be moot) and balance favors completing sale now. |
| Whether the denial of expedition violated due process by effectively dismissing the claim without a merits hearing | Shawe: deferral amounted to functional dismissal without full hearing, violating due process. | Elting/TPG: Shawe had opportunities to submit papers and be heard; the ruling merely defers proceedings consistent with the Sale Order and prior adjudication. | Denied — no due‑process violation; Shawe had process and prior proceedings produced the Sale Order. |
| Whether ordering a shareholder meeting now is required despite the Sale Order | Shawe: Section 211 ordinarily warrants prompt scheduling of meetings; delaying undermines shareholder protections. | Elting/TPG: holding a meeting would conflict with the Sale Order, be futile given Shawe’s conditioned proxy, and risk disrupting the sale. | Denied — meeting would conflict with Sale Order, be futile, and could jeopardize sale process. |
| Whether interlocutory review serves considerations of justice | Shawe: interlocutory review furthers justice by protecting statutory shareholder rights. | Elting/TPG: piecemeal appeals would delay and waste resources; justice favors finishing the sale and permitting consolidated appeal if needed. | Denied — considerations of justice favor completing sale and resolving appeals together. |
Key Cases Cited
- Shawe v. Elting, 157 A.3d 152 (Del. 2017) (Delaware Supreme Court decision affirming post‑trial Sale Order implementing a court‑ordered sale)
- Newcastle P’rs v. Vesta Ins. Grp., 887 A.2d 975 (Del. Ch. 2005) (discusses Court of Chancery practice favoring prompt shareholder meetings under Section 211)