TransPerfect

TransPerfect
Private
Industry
Founded New York, New York, United States (1992 (1992))
Founder
  • Liz Elting
  • Phil Shawe
Headquarters New York City, United States
Key people
 Phil Shawe, President and CEO
Revenue US$504,600,000 (2015)[1]
Number of employees
 4,000 (2015)[2]
Website www.transperfect.com

TransPerfect Translations is a translation services company based in New York City. The company provides "translation and discovery services" primarily to companies in the legal and healthcare fields.[2] As of 2012, TransPerfect was "the largest privately owned language services provider, with offices in over 90 cities worldwide".[3][4]

History

TransPerfect founders Elizabeth Elting and Phil Shawe met in a New York University (NYU) dormitory room and founded the company in 1992. With no external financing, TransPerfect grew from a two-person dormitory-based operation into one of the 125 largest privately held companies in the New York area.[5]

In 1998 the firm hit $10 million in sales and began expanding worldwide. In 1999, Elting and Shawe decided to establish a technology division. In doing so, they looked to provide language services for companies that used only digital content. They purchased the keyword based domain name, Translations.com for $75,000, figuring that the cost was about the same as a professional branding exercise.[6][7]. They launched Translations.com with several million dollars in outside investment to meet the demand for software and website translations.[8] In 2004, they bought out their investors and merged TransPerfect and Translations.com. That year they also hit $50 million in revenues.[8]

The company grew using primarily live translation services from multilingual people all over the world. In 2003, Shawe and Elting sought to bridge the gap between human translation and computer-aided translation.[9] So the two of them acquired a technology called Wordfast that was initially developed in 1999 as a platform-independent translation memory software for another translation company. Wordfast is owned by Shawe and Elting, but while TransPerfect uses the product under license,[10] it remained a wholly separate entity that is operated by the software’s founder Yves Champollion.[11]

As its revenues grew to nearly $65 million in 2005, the firm continued making key acquisitions. TransPerfect acquired Crimson Language Services, a Boston based medical and other highly-regulated industries translation company.[12]

Adding to its business, TransPerfect in 2012 acquired Digital Reef, and entered the E-Discovery business.[13]

In 2013, the company acquired Vasont Systems, a component content management system that helps companies publish multilingual technical documentation, product manuals, and other business information.[14]

From 2015-2018, TransPerfect was involved in a legal dispute between its founders, but continually competed and performed in its marketplace.[15][16] It closed 2016 with sales at $546 million, and its sales for the full year 2017 totaled $614.8m[17]. Two months after the conclusion of three-year lawsuit that ended with Shawe buying Elting's position and becoming the sole owner, the company posted its most successful month's revenues in June 2018, at $62 million.[18] It posted $337 Million for the first half of 2018, which was up nearly 20% from 2017.[19]

Patented technology

In July 2013, TransPerfect prevailed in a U.S. Federal patent trial against competitor MotionPoint. The trial began as a result of MotionPoint's claim that TransPerfect's use of its own translation technology patent was invalid, and infringed one of MotionPoint's patents. TransPerfect sued MotionPoint, and MotionPoint filed a counter-suit.[20] After three weeks of arguments, a California jury voted in favor TransPerfect and awarded $1 million in damages.[21] In July 2015, the United States Patent and Trademark Office Trial and Appeal Board ruled that the claims of the Transperfect patent in question was unpatentable.[22]

Following an apparent difficulty in communications between one another, Elting considered her options regarding her 50% ownership of the company. Among the issues she was concerned with was the value of her 50% ownership share.[23] Elting sought relief from the legal system. Shawe saw that as an attempt by Elting to use the courts to help her negotiate an exit policy.[24] In 2014, Elting sought to remove Shawe as an officer of TransPerfect Translations International, Inc. (TPI). Elting sought an injunction barring Shawe from conducting any managerial activity related to TransPerfect and sought the dissolution of TransPerfect, alleging that Shawe had engaged in "erratic and abusive behavior".[25][26] New York State Supreme Court Justice Melvin Schweitzer dismissed the case, suggesting the two needed to work it out privately and not seek remedy from a court.[27]

The suit was then taken to the Delaware Chancery where Elting reissued her complaint, and Shawe alleged that Elting had breached her fiduciary duties by not moving ahead with certain business-related opportunities, such as leases, acquisitions, and diverting funds for her own personal use.[28] In August 2015, The Chancellor of the Delaware Chancery Court, Andre Bouchard, decided to have a third-party sell the shares of the company in a public auction.[29]

Former New York Mayor Rudolph Giuliani chimed in and suggested that the court decision in Delaware would harm Delaware's status as a popular business incorporation state.[30][31] NY Justice Schweitzer also publicly commented on the case in Delaware, saying, "I was kind of shocked at how extreme the result was... The company is still doing phenomenally well and I thought there were steps that should have been taken short of ordering a sale. That's would I would have done if I still had the case."[32]

The argument against the Chancellor has been the misapplication of Delaware General Corporation Law,[33] clause 226 that authorizes the sale of a company when it faces financial default and other catastrophic issues. Here, as the company has only proven to do even better each year, even during this lawsuit period.[34] The defendants have argued that the company has not suffered and that the only remedy is the appointment of tie-breaking board member to help move issues along.[35] Following Bouchard's decision, Shawe sought an appeal of the ruling and the oral argument was held on January 18, 2017.[36]

For the appeal, Professor Alan Dershowitz argued for Shirley Shawe, a 1% owner in the company.[37] Dershowitz argued that Chancellor Bouchard's decision was tantamount to an illegal constitutional taking.[37] Delaware Chief justice Leo Strine argued back to Dershowitz that he had no right to bring that up since it was not in the initial case, and the two argued over the law.[38] The appeal affirmed Bouchard's decision.[39] Shawe and Dershowitz then suggested that they will petition the U.S. Supreme Court for certiorari.[40] In March 2017, Shirley Shawe announced that she would attempt to break the manufactured corporate deadlock to end the legal case and stop the court imposed sale,[41] and laid out a plan to vote her single share with Elting's 50%, giving Elting control to appoint five board members with staggered terms, making it mathematically improbable for deadlock to ensue.[42][43] Elting's team rejected that offer, advising that there was already a sale order in place.[44][45] On June 2, 2017, the Delaware Chancellor heard the case of Shirley Shawe's proposal to grant the votes of her 1% to Elting to cede control, and simultaneously heard the motion by Elting to sanction Mrs. Shawe for trying to settle the case without the public sale.[46] Bouchard appeared unsettled by the amount of media that this case has garnered,[47][48] and stated that this case should settle out of court.[46] During the hearing, he challenged Elting asking her why she would not accept control of the company as she has stated she wanted during the initial case and the appeal,[49] and her attorney intervened and stated that she would not run a company where Philip Shawe owned 49%.[49][50]

Judge Bouchard chose to order mediation while still pursuing the public sale order.[49][50][46], and stated that he had appointed former Chancellor Bill Chandler to mediate, and would not rule on either motion for at least 30 days.[50]

After the final round of bidding for the company on November 10 passed, late in the evening on November 14th, 2017, Delaware State Senator Colin Bonini wrote an email to Chancellor Andre Bouchard asking to be permitted to oversee the review of bids. Bonini cited questions of "conflicts that would make the auction process appear 'rigged or invalid,'" dealing with Credit Suisse, the investment bank running the TransPerfect auction, and the law firm Skadden Arps, and one of the bidders that was allegedly intertwined with both.[51] Bouchard notified the parties that he would not take any action on the letter, but entered it into the public record; several media then reported the letter and the allegations.[52]

With more than two years of litigation and legal questions over whether a court can order the auction of a successful private company that is not in distress or bankruptcy,[53] the court appointed custodian, Robert Pincus, a partner at Skadden Arps, announced in a November 20, 2017 email to the employees of the company, that Philip Shawe was the successful bidder in the public auction, and that he was in final talks to bring this matter to an end.[54]

Employee group forms to protect company

Included in this case has been a campaign waged by a group that calls itself Citizens for a Pro-Business Delaware[55] to lobby the legislature to change the chancery rules regarding the forced sale of a private, well performing company.[56] The group claims over 1200 members.[57] "Citizens " built a website, has run television commercials,[58] taken billboard and newspaper ads, petitioned elected leaders[59] and held press conferences to press the issue of their concern for the jobs that may be lost[57] and the impact this decision would have on Delaware's ability to continue attracting new companies to incorporate in the state.[60]

There have been charges of unethical actions by Elting's law firm Kramer Levin Naftalis & Frankel,[61] which was sanctioned by the Chancery Court for "repeatedly instruct[ing] a witness not to answer questions.[62]

A defamation suit was filed by Shirley Shawe against Kramer Levin, claiming that its lead attorney on the case “crossed the line” by making false statements in connection with the Delaware sale case that “were intended to damage Shawe’s business and personal reputation,” while talking to a reporter about the case.[63] Citing that same interview, attorney Philip Kaufman was also accused of contradicting himself when he argued before the appeal court from what he claimed to the reporter.[64] Ms. Shawe ran a series of TV ads highlighting the varying sets of comments made by Kaufman and the video was posted to YouTube.[65]

References

  1. ↑ "TransPerfect provides language and technology services to manage multilingual content". Forbes. Retrieved 26 October 2016.
  2. 1 2 Stengel, Geri (27 February 2013). "A $340 Million Company Shares Strategies For Growing Without Outside Funding". Forbes. Retrieved 11 January 2016.
  3. ↑ Chase, Randall (13 Feb 2017). "Court-Ordered Sale of TransPerfect Translation Company Is Upheld". New York Times.
  4. ↑ Stengel, Geri (11 January 2012). "Want to Grow the Economy? Change Four Attitudes About Women Entrepreneurs". Forbes. Retrieved 11 January 2016.
  5. ↑ "Top 125 Privately Held Companies". Crain's New York Business. Crain Communications, Inc. 19 November 2012. Retrieved 19 June 2013.
  6. ↑ Sullivan, Michael K. (6 April 2018). "Translations.com - Invest in the domain, not the formal branding effort -". SullysBlog.com.
  7. ↑ "TRANSPERFECT LAUNCHES TRANSLATIONS.COM, INC". www.translations.com. 11 October 1999.
  8. 1 2 Savchuk, Katia (25 March 2016). "Inside The Nasty Corporate Divorce Between Ex-Lovers Who Built A Company Worth Nearly $1 Billion". Forbes.
  9. ↑ Bouchard, Andre (15 January 2018). "In re: TRANSPERFECT GLOBAL, INC". courts.delaware.gov. H. The Wordfast Controversy
  10. ↑ Smart, Andrew (11 September 2017). "Wordfast May Not Be Part of TransPerfect Sale | Slator". Slator.
  11. ↑ Taylor, Charlie (14 October 2017). "Pirates of the First State: At Business Climate's End". Respvblica.
  12. ↑ DePalma, Donald A. (27 October 2005). "Merger and Acquisition Activity Continues as TransPerfect Acquires Crimson". www.commonsenseadvisory.com. Common Sense Advisory, Inc.
  13. ↑ Alspach, Kyle (4 October 2012). "Matrix-backed Digital Reef acquired by TransPerfect". www.bizjournals.com. Boston Business Journal.
  14. ↑ "TransPerfect Merger with Vasont: One-Stop Solution for Global Clients". TechWhirl. Tech Writer Today Magazine. 27 January 2014.
  15. ↑ Bell, Terena (27 April 2017). "A flawed decision on TransPerfect". Crain's New York Business. Crain Communications.
  16. ↑ TransPerfect. "TransPerfect Annual Sales Reach All-Time High in 2016". GlobeNewswire News Room. TransPerfect.
  17. ↑ "TransPerfect Posts Record USD 615M Revenue for 2017 | Slator". Slator. 2018-01-17. Retrieved 2018-02-08.
  18. ↑ Rainey, Douglas (15 July 2018). "TransPerfect reports record revenue after court clears way for co-founder to buy out partner - Delaware Business Now". delawarebusinessnow.com.
  19. ↑ Kosman, Josh (13 July 2018). "TransPerfect business booming after years-long 'custody' battle". New York Post. News Corp.
  20. ↑ Paul Demery (29 July 2013). "In a web translation patent battle, the jury sides with TransPerfect". Internet Retailer. Vertical Web Media. Retrieved 18 August 2013.
  21. ↑ Donald DePalma (15 July 2013). "Jury Decides Translation Automation Case". Common Sense Advisory. Common Sense Advisory, Inc. Retrieved 18 August 2013.
  22. ↑ "MotionPoint Corporation v. TransPerfect Global: Final Written Decision Finding All Challenged Claims Unpatentable".
  23. ↑ Rainey, Douglas (2 Jan 2017). "Did TransPerfect's Shawe get a fair shake in sales dispute?" ("a would-be buyer other than Shawe would not pay top-dollar for a 50-50 share that would still leave control of the company in limbo"). bird street media llc. Delaware Business Now.
  24. ↑ Faes, Florian (29 Nov 2016). "A Fight About Money, Not Spite, Says TransPerfect's Phil Shawe". Slator.com.
  25. ↑ Elting v. Shawe (Supreme Court Of The State Of New York County Of New York August 4th, 2014). Text
  26. ↑ Ross, Barbara. "Co-founder of $400 million company seeks restraining order against his business partner and former lover". New York Daily News. NYDailyNews.com. Retrieved 18 June 2014.
  27. ↑ "TransPerfect Translations International Announces Major Victory In New York Supreme Court". PR Newswire. The Street. 8 Sep 2014.
  28. ↑ Chiappardi, Matthew (3 Jun 2015). "TransPerfect Co-CEOs Warned To Make Peace Or Else". Portfolio Media, Inc. Law360.
  29. ↑ "Court orders feuding biz partners, ex-lovers, to sell their profitable translation firm".
  30. ↑ Mordock, Jeffrey (22 Apr 2016). "Giuliani blasts Delaware court for decision in lover's spat". News Journal. USA Today. Delaware Online.
  31. ↑ Davidoff Solomon, Steven (15 Nov 2016). "TransPerfect Is Threatened by Owners' Petulance". Dealbook. New York Times.
  32. ↑ Mordock, Jeff (12 Jan 2017). "Shawe adds celebrity attorney Dershowitz to legal team". The News Journal. USA Today. The Arizona Republic.
  33. ↑ Samaha, Sarah M. (2018). "Shawe v. Elting: The Imperfect Sale of TransPerfect Global, Inc". Maryland Law Review. 77 (3): 900–927. Retrieved 25 July 2018.
  34. ↑ Bonini, Colin (8 Feb 2017). "We must keep Delaware the best place for business". Delaware Voice. USA Today Network. The News Journal.
  35. ↑ Lucas, Fred (27 May 2016). "Judicial Overreach: Small Court, Big Economic Ramifications". Townhall.com. Townhall.
  36. ↑ Mordock, Jeffrey (16 Nov 2016). "Supreme Court to hear TransPerfect case on Jan. 18". The News Journal. Delaware Online. USA Today Network.
  37. 1 2 Feeley, Jef (18 Jan 2017). "Dershowitz Adds Star Power to Heated TransPerfect Fight". Bloomberg. Bloomberg LP.
  38. ↑ Mordock, Jeff. "Alan Dershowitz, Justice Strine spar over TransPerfect". New Journal (18 Jan 2017). Delawareonline. USA Today.
  39. ↑ McParland, Tom (13 Feb 2017). "Del. Supreme Court Upholds Forced Sale of TransPerfect". Delaware Law Weekly. ALM Media Properties, LLC.
  40. ↑ McParland, Tom (20 Jan 2017). "TransPerfect-Linked Group Lobbies to Curb Forced Sales of Corporations". Delaware Law Weekly. ALM Media Properties, LLC.
  41. ↑ Durkin, Brian C. (2018). "Manufactured Deadlocks? The Problematic "Bad Faith Defense" to Forced-Sales of Delaware Corporations Under Section 226 of the Delaware General Corporation Law". Boston College Law Review. 59 (2): 724–761.
  42. ↑ Pappas, Leslie (16 Mar 2017). "TransPerfect Shareholder Offers to Break Owner Deadlock". Bloomberg. Bloomberg BNA.
  43. ↑ Sullivan, Vincent (21 Apr 2017). "TransPerfect Shareholder Seeks Meeting To Expand Board". Portfolio Media, Inc. Law360.
  44. ↑ Taylor, Charles (11 Apr 2017). "Milim/TransPerfect and the Delaware business climate". Times of Israel. Times of Israel.
  45. ↑ Bonini, Colin (21 March 2017). "The 51 percent solution in the Transperfect case". The News Journal Media Group. DelawareOnline.
  46. 1 2 3 Waltz, Samuel. "Analysis: TransPerfect crawling toward a resolution?" (20 June 2017). Delaware Business Times. Delaware Business Times.
  47. ↑ Reese, Hayley (10 July 2017). "Delaware Law Updates - TransPerfect's Controversial Business Divorce Continues, Illustrating The Need For LLC Operating Agreements". JD Supra, LLC. JDSupra.
  48. ↑ McParland, Thomas (5 June 2017). "Bouchard Sends TransPerfect Dispute to Mediation With Ex-Chancellor". ALM Media Properties, LLC. http://www.delbizcourt.com.
  49. 1 2 3 Chiappardi, Matt (2 June 2017). "Chancery Orders Fierce TransPerfect Dispute Into Mediation". LexisNexis. Law360.
  50. 1 2 3 Rainey, Douglas (3 June 2017). "Mediator appointed in effort to resolve TransPerfect impasse". Bird Street Media LLC. Delaware Business Now.
  51. ↑ Chiappardi, Matthew (15 November 2017). "Del. State Lawmaker Wants To Intervene In TransPerfect Sale - Law360". www.law360.com. Lexis Nexis. Law360.
  52. ↑ Rainey, Douglas (16 November 2017). "Bonini points to potential conflicts in process of selling TransPerfect - Delaware Business Now". Delaware Business Now. Delaware Business Now.
  53. ↑ McParland, Tom (21 November 2017). "Custodian Says Shawe to Purchase Rival's TransPerfect Stake | Delaware Business Court Insider". Delaware Business Court Insider. Law.com. Delaware Business Court Insider.
  54. ↑ Chiappardi, Matthew (21 November 2017). "Shawe Forges Deal To Buy TransPerfect After Bitter Fight - Law360". www.law360.com. Lexis Nexis. Law360.
  55. ↑ Hals, Thomas (13 Feb 2017). "Top Delaware court upholds sale of translation firm TransPerfect". Reuters. Yahoo News.
  56. ↑ "Citizens for a Pro-Business Delaware launches six-figure advertising effort". DELAWARE BUSINESS NOW. bird street media llc. 11 Jan 2017.
  57. 1 2 Mordock, Jeff (18 Oct 2016). "Supreme Court decision a loss for TransPerfect workers". News Journal. USA Today. Delaware Online.
  58. ↑ Mordock, Jeff (2 Feb 2017). "TransPerfect workers spend $300,000 on new TV ads". The News Journa. USA Today. Delaware Online.
  59. ↑ McParland, Tom (17 Feb 2017). "For TransPerfect-Aligned Group, a Legislative Waiting Game". Delaware Business Court Insider. ALM Media Properties, LLC.
  60. ↑ Feeley, Jef (13 Feb 2017). "Photographer: Henrik Sorensen/Getty Images TransPerfect's Auction Order Endorsed by Delaware High Court". Bloomberg Technology. Bloomberg LP.
  61. ↑ Rajamani, Maya (14 Aug 2015). "Chancery Sanctions Kramer Levin In TransPerfect Case". Law360. LexiNexis.
  62. ↑ CASSENS WEISS, DEBRA (30 Sep 2015). "Kramer Levin is sanctioned $135K for deposition conduct". ABA Journal. American Bar Association.
  63. ↑ Feeley, Jef (1 Feb 2017). "TransPerfect's Shawe Escalates Feud With Defamation Suit". Bloomberg Technology. Bloomberg LP.
  64. ↑ Rainey, Douglas (20 Feb 2017). "TransPerfect shareholder claims opposing attorney offers contradictory statements". Delaware Business Now. bird street media llc.
  65. ↑ Rainey, Doug (20 Feb 2017). "TransPerfect shareholder claims opposing attorney offers contradictory statements". bird street media llc. Delaware Business Now.
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