Court Opinion

ID: 8487101
Source: CourtListenerOpinion
Date Created: 2022-11-18 13:02:19.360778+00
Date Added: 2024-06-11T16:50:02.980117
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

TRANSPERFECT GLOBAL, INC.                   §
and PHILIP R. SHAWE,                        §
                                            §     No. 131, 2022
              Plaintiffs Below,             §
              Appellants,                   §     Court Below—Court of Chancery
                                            §     of the State of Delaware
              v.                            §
                                            §     C.A. Nos: 9700-CM and 10449-CM
ROBERT PINCUS,                              §
                                            §
              Defendant Below,              §
              Appellee.                     §

                            Submitted: October 26, 2022
                            Decided:   November 17, 2022

Before SEITZ, Chief Justice; VAUGHN and TRAYNOR, Justices.

                                           ORDER

      This 17th day of November, 2022 after consideration of the parties’ briefs and

the record on appeal, it appears to the Court that:

       1.     The background of this litigation and, in particular, the history of the

disputes between TransPerfect Global, Inc. and Philip R. Shawe (collectively,

“TPG”), on the one hand, and TransPerfect’s court-appointed custodian, Robert B.

Pincus, on the other hand, are set forth in detail in prior opinions and orders of this

Court.1

1
 TransPerfect Global, Inc. v. Pincus, 278 A.3d 630 (Del. 2022); Shawe v. Elting, 157 A.3d 152
(Del. 2017); TransPerfect Global, Inc. v. Pincus, 224 A.3d 203, 2019 WL 7369433 (Del. Dec. 31,
2019) (TABLE).
         2.     This appeal stems from the Court of Chancery’s denial of TPG’s

motion to terminate the escrow agreement executed in connection with the court-

ordered sale of TransPerfect (the “Escrow Agreement”). In accordance with the

securities purchase agreement under which Elizabeth Elting sold her 50% interest in

TransPerfect to Shawe, the Escrow Agreement established an escrow account

funded with $9 million from the purchase price, $5 million of which was held for

amounts payable to the custodian or his advisors (the “Escrow Fund”).

         3.     Of particular relevance here is Section 2.2 of the Escrow Agreement,

which provides that the Escrow Fund shall survive until the later of two dates: “(a)

three (3) years following the Closing and (b) one (1) year after any claim that exists

against the custodian is resolved pursuant to a final, nonappealable order of a court

of competent jurisdiction.”2 The closing occurred on May 7, 2018.

         4.     We agree with the Court of Chancery’s conclusion that the Escrow

Fund has not terminated by its terms. Certain of TPG’s motions, including the

February 6, 2020 contempt motion filed against Pincus and his law firm, the

February 27, 2020 motion to preclude Pincus from recovering contempt-sanction

fees, and the March 2, 2021 motion seeking attorneys’ fees from Pincus for alleged

bad faith conduct (the “Motions”), constitute “claims” under Section 2.2 of the

2
    App. to Opening Br. at A03182.
                                           2
Escrow Agreement.3 TPG appealed the Court of Chancery’s denial of these motions

to this Court, and we affirmed the Court of Chancery’s judgment on June 1, 2022.

The mandate in each of the consolidated appeals issued on June 21, 2022.4 Thus,

less than one year has passed since these claims were resolved. Moreover, the Court

of Chancery did not err when it declined to address the “unripe” issue of whether

“purely hypothetical” claims identified in the future would permit the Escrow

Fund’s survival under Section 2.2.

       5.     Nor is Pincus estopped from seeking payment from the Escrow Fund.

The Escrow Fund is “a non-exclusive source of funds for securing” amounts payable

to the custodian and, what is more, the Court of Chancery recognized, in its April

30, 2021 Memorandum Opinion, that Pincus could charge either TPG or the Escrow

Fund.5

       6.     Lastly, the Court of Chancery’s denial of TPG’s Rule 59(f) motion,

which did not identify principles of law or fact that the court misapprehended or

3
  Order Resolving Resp’ts’ Mot. to Terminate the Escrow Agreement at 6, In re TransPerfect
Global, Inc., C.A. No. 9700-CM (Del. Ch. Nov. 1, 2021), Dkt. 1676.
4
   We reject TPG’s contention that they effectively abandoned the claims on appeal, thus
transforming the Court of Chancery’s order denying the claims into a final, non-appealable order.
As we recognized, TPG “[brought] eight distinct objections to the reasonableness of the entirety
of the $3,242,251 award.” Pincus, 278 A.3d at 653. Because that amount includes at least
$274,887 in fees and expenses owed to Pincus for defending TPG’s Motions, the claims were not
abandoned. App. to Opening Br. at A03118.
5
  In re TransPerfect Global, Inc., 2021 WL 1711797, at *49 (Del. Ch. Apr. 30, 2021). See Pincus,
278 A.3d at 659 (finding that the Court of Chancery did not abuse its discretion in permitting
Pincus to charge TPG and noting that Pincus is “also authorized to charge the Escrow [Fund]”).
                                               3
overlooked or language in the court’s November 1, 2021 Order requiring

clarification, was not an abuse of discretion.

      NOW, THEREFORE, IT IS ORDERED that the judgment of the Court of

Chancery be AFFIRMED on the basis of and for the reasons stated in its November

1, 2021 Order and March 17, 2022 Letter Decision.6

                                                  BY THE COURT:

                                                  /s/ Gary F. Traynor
                                                        Justice

6
 Order Resolving Resp’ts’ Mot. to Terminate the Escrow Agreement, In re TransPerfect Global,
Inc., C.A. No. 9700-CM (Del. Ch. Nov. 1, 2021), Dkt. 1676; Letter Decision, In re TransPerfect
Global, Inc., C.A. No. 9700-CM (Del. Ch. Mar. 17, 2022), Dkt. 1685.
                                              4