In the ongoing legal saga concerning the international translation firm TransPerfect (Milim in Bnai Brak) over 1,000 of its employees cosigned a letter to Delaware Governor John Carney demanding an inquiry into the relationship between Delaware’s Chancery Court and the law firm Skadden, Arps, Slate, Meagher & Flom LLP.
The employees sent the letter following a spree of motions filed by Transperfect Global, Inc. in the Delaware Court of Chancery alleging Skadden and Arps has billed them over $14 million in undisclosed legal fees.
Transperfect’s personal experience with Skadden and the Chancery Court goes back years, beginning with the forced sale of a successful company. The court’s Chancellor Andre Bouchard appointed his own friend and former colleague, Skadden partner Robert Pincus, as custodian of the company during the sale process, which was also the first time the Chancery Court forced the sale of a profitable company over the objections of two of its three shareholders. Yet, two years after the 2018 completion of the transaction, Transperfect is still receiving monthly bills from Pincus – including his $1,475 hourly fee – for undisclosed services.
One of the main issues seems to be the fact that Pincus’ invoices are permitted to be filed with little to no detail, under the guise of protecting the sale process – even though it was completed years ago – and the bills keep coming. It is more likely to protect Delaware’s corporate climate and the flow of legal fees that contribute heavily to the State’s revenue stream. “Opening Skadden’s invoices to scrutiny sets a harmful precedent for the self-feeding system,” is how one insider phrased it.
With that, TransPerfect claims it is being billed millions of dollars by a close friend of the sitting Chancellor month after month for services that TransPerfect and its founder declares are neither needed nor rendered. Any objection they try to raise has been frustrated by Chancellor Bouchard’s decisions.
Even though TransPerfect ended its first quarter of 2020 with billed revenues of $190 million, up 14% from the same period in 2019, it seems, the bills are starting to have an impact on the thousands of employees who rely on Transperfect for their livelihood. The letter from the employees claims in part, “for the first time ever, this spring we will not receive raises. Even worse, many of us who work hourly have had our hours reduced or been furloughed entirely. We are asking for your office to open an inquiry to scrutinize both the cozy relationship between Chancellor Bouchard and his former firm, as well as the Chancery Court’s complete lack of transparency and Skadden’s questionable billing practices. These actions and to end this Court-sanctioned looting of TransPerfect. It’s hurting us in irreparable ways. Enough is enough, we need you to step up and investigate this matter immediately.”
After further research, it seems that Skadden, Arps, Slate, Meagher & Flom LLP. has a long, intricate history with the Delaware Chancery Court, and specifically with Andre Bouchard. The most obvious connection being that Chancellor Bouchard was a partner at Skadden. Coincidentally, Bouchard worked with Pincus long before appointing him TransPerfect’s custodian. When TransPerfect appealed the decision, it was reviewed by another Skadden partner and subsequently denied. When they continued the fight, the Delaware Supreme Court’s Chief Justice who reviewed Bouchard’s decisions was Bouchard’s former intern at Skadden.
Aside from its blatant ties to the court, Skadden, Arps, Slate, Meagher & Flom LLP. has a slew of its own issues that could compromise public trust and credibility. Last week The Reverend Al Sharpton sent a scathing letter to the firm, scolding them for a “staggering lack of diversity in the legal industry that Skadden Arps exemplifies so abhorrently.” He continues by quoting their own website stating “while your firm claims that ‘diversity and inclusion are fundamental to [y]our success as a global law firm,’ the appallingly low levels of diversity at Skadden tell a different story.”
The letter ends with Sharpton berating the firm for including a picture of Dr. Martin Luther King’s memorial on their website to “falsely imply that the firm embodies the ideals of fair justice and equal treatment for all.”
Since the sending of the letter on April 15, it appears Skadden has removed from their website the image of Dr. King, but still maintains itself as “champions of inclusion.”
There is nothing new about the old-boys-club that is the Delaware justice system, but amid a global pandemic that has seen unemployment rates skyrocket and business close en masse, it seems particularly egregious that the cronies in Delaware continue to line their pockets with the profits of legitimate companies simply because they can. That money could be better spent on sustaining the employees who stand to lose the most right now.