As reported by Law360, Chancellor Andre G. Bouchard, Philip Kaufman and his firm Kramer Levin, "frustrated the fair examination of Mr. Greenberg." For using one Partner to inappropriately defend and obstruct testimony from another, the Court would later sanction Kramer Levin and fine them over $100,000 in fees for deposition misconduct. Ronald Greenberg, Kramer Levin, and exiting Co-CEO Liz Elting stand accused of unlawfully converting over $21 million in corporate funds, including fraudulent attorneys fees that Kramer Levin took directly from TransPerfect, while simultaneous plotting to oust the active CEO and dissolve the successful company.
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Kramer Levin Naftalis & Frankel Sanctioned in Chancery Court
1. CORRECTED: Chancery Sanctions Kramer Levin In TransPerfect Case - Law360
http://www.law360.com/articles/691571/corrected-chancery-sanctions-kramer-levin-in-transperfect-case
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CORRECTED: Chancery Sanctions Kramer Levin
In TransPerfect Case
Share us on: By Maya Rajamani
Law360, Wilmington (August 14, 2015, 9:47 PM ET) -- A Delaware Chancery judge on Friday sanctioned
Kramer Levin Naftalis & Frankel LLP for the conduct of one of Kramer Levin’s attorneys, ruling that he
violated Court of Chancery rules during a February deposition.
Chancellor Andre G. Bouchard determined that Kramer Levin must pay the legal costs surrounding the
deposition of its attorney Ronald Greenberg in the highly tumultuous business divorce between Elting and
Phillip Shawe, co-CEOs of translation services company TransPerfect Global Inc., after finding attorney
Philip Kaufman “inappropriately” instructed Greenberg not to answer many of the 75 questions asked and
ended the deposition prematurely.
“The litigation of these actions has been a heated affair to be sure, but that does not excuse unprofessional
conduct,” Chancellor Bouchard wrote in his opinion. “Mr. Kaufman’s defense of this deposition crossed the
line between zealous advocacy and unprofessional conduct, and frustrated the fair examination of Mr.
Greenberg.”
The ruling stems from what is essentially a business divorce between Elting and Shawe, who started
TransPerfect out of a dorm room at New York University in 1992, and were at one point engaged to be
married before breaking up in 1997, according to court records.
2. CORRECTED: Chancery Sanctions Kramer Levin In TransPerfect Case - Law360
http://www.law360.com/articles/691571/corrected-chancery-sanctions-kramer-levin-in-transperfect-case
While their romantic ties appeared to fall apart, their business relationship did not, and over the years the
translation company grew into a global powerhouse in the industry with 92 offices in 86 cities worldwide,
court records state.
But the co-CEOs' professional dealings eventually fractured into a morass of litigation in both Delaware and
New York, with Elting seeking to have the company dissolved because of the endless loggerheads and
corporate battles.
In March, Shawe moved for sanctions against Elting and Kramer Levin, maintaining Kaufman acted
inappropriately while defending the deposition of Greenberg, according to the chancellor’s opinion on Friday.
In Friday's opinion, Chancellor Bouchard said that Kaufman should not have instructed Greenberg not to
answer certain questions, as there was no order from the court limiting the scope of the deposition.
“Having reviewed the complete transcript of Mr. Greenberg’s deposition, I conclude that Mr. Kaufman’s
defense of that deposition did not comport with the standards required by the Court of Chancery Rules,” the
chancellor wrote. “Many of the questions that Mr. Kaufman instructed Mr. Greenberg not to answer were
benign and did not implicate any privilege.”
The chancellor said Kaufman was not relieved of his obligations under the court’s rules simply because
Shawe did not call him as a witness at the trial, and that that very decision seemed to be a “legitimate
strategic choice,” based on the trial proceedings.
He added that “unclean hands” does not apply in this particular instance because Shawe’s motion for
sanctions during the Greenberg deposition does not relate to the allegations of discovery misconduct Elting
has claimed in her pending motion for sanctions.
On Thursday, Chancellor Bouchard named a Skadden Arps Slate Meagher & Flom partner as the court-
appointed custodian to oversee the sale of TransPerfect Global Inc., ruling that the hopeless deadlock
between its warring co-CEOs is threatening the multimillion-dollar global firm's financial future.
The case, most of which is heavily redacted in the court record, went before the Chancery Court for a six-day
trial earlier this year, and during post-trial arguments, Chancellor Bouchard warned the pair to come to
some sort of settlement or he would be forced to write an opinion that makes both sides look “small-minded,
petty and vindictive.”
In the chancellor’s Thursday opinion, he described all manner of conduct such as profanity-laced, angry
emails over company business, and what he called “temper tantrums” and “mutual hostaging,” where the co-
CEOs would hold up business decisions until they got their way.
Chancellor Bouchard devotes particular attention to allegations Shawe spied on Elting by accessing her
computer to get hold of personal email, and going into her unoccupied office on New Year's Eve 2013 to
copy her hard drive and set up a way to monitor it remotely, writing that he believes Shawe “became enraged
when Elting engaged counsel to assist her and that he spied on Elting to gain intelligence in pursuit of a
personal vendetta against her.”
3. CORRECTED: Chancery Sanctions Kramer Levin In TransPerfect Case - Law360
http://www.law360.com/articles/691571/corrected-chancery-sanctions-kramer-levin-in-transperfect-case
Shawe has accused Elting of her own misconduct, such as what his court papers called “outright sabotage” of
the company by allegedly getting customers to withhold business and blocking needed hires. He has also
moved to have her Kramer Levin partner Greenberg disqualified from the case, arguing that one of the
attorneys representing her should actually be a witness in the case because he has been a “central figure” in
past disputes, in addition to asking for monetary sanctions based on Kaufman’s improper actions during the
deposition.
The chancellor on Thursday wrote that Shawe's sabotage claims were barred by “unclean hands.”
Attorneys from Kramer Levin Naftalis & Frankel LLP did not immediately respond to request for comment
Friday.
Elting is represented by Gerard E. Harper and Robert N. Kravitz of Paul Weiss Rifkind Wharton & Garrison
LLP, Philip S. Kaufman, Ronald S. Greenberg, Marjorie E. Sheldon,and Jared I. Heller of Kramer Levin
Naftalis & Frankel LLP, Kevin R. Shannon, Berton W. Ashman Jr., Christopher N. Kelly and Jaclyn C. Levy
of Potter Anderson & Corroon LLP, and Kurt M. Heyman and Melissa N. Donimirsky of Proctor Heyman
Enerio LLP.
Shawe is represented by Ronald C. Minkoff, Richard M. Maltz and Andrew J. Ungberg of Frankfurt Kurnit
Klein & Selz LLP, Philip L. Graham Jr. and Penny Shane of Sullivan & Cromwell LLP, Howard J. Kaplan
and Joseph A. Matteo of Kaplan Rice LLP, Gregory P. Williams, Lisa A. Schmidt and Robert L. Burns of
Richards Layton & Finger PA., Peter B. Ladig, Brett M. McCartney and Kyle Evans Gay of Morris James
LLP, and Paul D. Brown of Chipman Brown Cicero & Cole LLP.
The cases are In re: TransPerfect Global Inc., case numbers 9661, 9686 and 9700, in the Delaware Court of
Chancery.
— Additional reporting by Matt Chiappardi and Lisa Ryan.
Correction: An earlier story incorrectly stated the parties subject to sanctions. The error has been corrected.
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