As it happens, I was in Las Vegas doing what so many people come to Sin City – networking, and one of the lawyers with whom I was speaking was telling me about a strange case that was happening in a Henderson, Nevada courtroom on Wednesday, October 16. I’ve rolled the dice many times and doubled down once too often for my luck and decided it may be more interesting to see this unfold. After all, how often does one get a chance to hear professor Alan Dershowitz do what he does so well, argue constitutional issues in front of a judge?
The case was about an obscure private company with a near billion-dollar valuation, offices all over the world and quite a history of business-related litigation. I went to court to see what it was all about.
The company was incorporated in Delaware up until September of 2018 when they moved under the protection of Nevada’s business courts because the Delaware Chancery, and seemingly its head Chancellor Andre Bouchard, was dead set on ruling against the translation company and its CEO Philip Shawe time and again.
From the onset, the Chancellor made a peculiar ruling to force the company into a public auction against the wishes of two of its three decision makers, and used a Delaware business law (section 226) that mandates a custodian be appointed and a public sale away from its owners if the company is “threatened” with irreparable harm, facing insolvency or bankruptcy; none of which the company seemed to have been facing. For what it is worth, TransPerfect has enjoyed successful quarters, each more impressive than the next, since its founding in 1993. At the time its problems began in Delaware’s courts it was hitting half a billion in revenues, and at the end of it, in May of 2018, it had grown to $650 million – so no real trouble there; woe is them for being in such disarray, I guess. My wish for the New Year is that we should all be that dysfunctional.
I am not going to get into the reasons for the initial legal fights in Delaware, because that is not what drove me to the courtroom the other day. It was Dershowitz.
The new legal argument is about Delaware’s court appointed custodian Robert Pincus and his big law firm, Skadden, Arps, Slate, Meagher & Flom. They are accused of billing the company for unknown and unspecified work, and the Delaware Chancery had previously been inclined to permit that and even think proper. Shawe and his company decided to take the challenge to see the detail in the law firm’s invoices to their new domicile of Nevada, and the court is in Vegas itself.
There was a Delaware hearing scheduled for Thursday, October 10, the day after Yom Kippur, the holiest and most solemn day on the Jewish calendar. The problem is that professor Dershowitz was only admitted to practice in Delaware on this case – called Pro hac vice – earlier in that same week. He therefore asked for an extension on the case for less than one week; until Monday, October 14. Chancellor Bouchard asked them for a quid pro quo – to delay the case in Nevada, which was not being heard until mid-November anyway. TransPerfect declined, saying that the Nevada case should not be tied to a short extension for Yom Kippur observances. The chancellor then declined the Yom Kippur adjournment – which effected Dershowitz and two others of TransPerfect’s Jewish attorneys.
I was incensed to hear that the Day of Atonement delay was not happening and that it seemed the judge and even Skadden Arps were playing politics with a Jewish holiday. Still, it is not surprising. After all, Delaware’s judiciary and even government seem a bit singularly shaded, and the same religious deference afforded in a state like say, New York or Florida, just does not need to exist in Delaware.
Dershowitz heard the shofar blast and then hightailed it Delaware to argue against contempt for his client the day after. After that hearing, Pincus filed some emergency motion in Nevada to stall the suit in that state, and the hearing for that Emergency motion in Nevada is what I went to see and hear on Wednesday the 16th.
The Professor was eloquent as always, and was on point enough to convince Nevada judge Nancy Allf that there was something awry with the ghost billing policy of the law firm and of Delaware’s corporate governance policies, but ultimately she punted the case so not to interfere with Chancellor Bouchard’s decision making. I thoroughly enjoyed listening to the professor, as I do when I see him on TV and read his materials. To hear him in a courtroom, his natural and original setting – away from the lights and set makeup, teleprompters and all, was a thrill. If only he talked about Israel in his presentation, as very few topics inspire such passion in him. Yet, he posed the TransPerfect case to allow the company to see what it is paying for as a constitutional argument, and that too is his sweet spot.
For the money I lost at the tables, I won a rare experience to witness one of the great courtroom orators of our time. That was worth the trip.
On the case; just to not leave my readers hanging, the very next day Bouchard ruled in Delaware on the post Yom Kippur hearing to hold Shawe and TransPerfect in contempt for the transgression of asking another jurisdiction to help him gain access to Skadden Arp’s itemized invoices (I think he must have thought that this was one of the sins for which we must pound our hearts). Reeling from his 25-hour fast and prayers, Dershowitz seemingly lost that argument too.
But did he?
Bouchard’s order was to hold Shawe in contempt and charge him and the company $30 thousand per day for every day that the Nevada lawsuit was not dropped; and they were given until the end of Shmini Atzeret (The Eighth Day of Assembly) on Monday, October 21 to drop the suit or face the fine. I wonder if it is purely coincidental that this Judge burdened TransPerfect and its team of Jewish lawyers on their holiday season. One Shmini Atzeret, Bouchard held a call with the lawyers and came to a seemingly miraculous decision – maybe God softened his heart as he did Pharaoh when he finally let the Hebrew people leave Egypt after being hit by ten devastating plagues– and ruled that he would not hold Shawe in contempt for daring to ask to see what he was paying for, and he told Skadden to produce the invoices for the company to view. Later that same day, as the celebration of the Torah (Simchat Torah) began, Shawe and his company ended the Nevada action and triumphantly declared victory.
The period of Sukkot will forever be remembered and celebrated by TransPerfect and its team of lawyers, and all of this because I got to see Alan Dershowitz perform.