Transperfect Chancery Court Dershowtiz

Alan Dershowitz left $5 million in Chancery Court Thursday

Betsy PriceGovernment, Headlines

Transperfect Chancery CourtDershowtiz

TransPerfect was back in Chancery Court Thursday, and this time paid the nearly $5 million it owes to avoid a contempt order

Famed lawyer Alan Dershowitz’s lively appearance Thursday in a Delaware Court of Chancery included debating former Harvard student and now Chancellor Kathaleen St. J. McCormick and eventually dropping checks worth nearly $5 million onto the defense table.

It essentially paid in full what TransPerfect Global owes the Chancery Court.

Along the way, the hearing — to decide if Transperfect should be charged with contempt for not paying — meandered into the Clinton Whitewater scandal, Charles Dicken’s “Bleak House,” Joseph Heller’s “Catch 22” and Transperfect’s desire to never be in a Delaware courtroom again.

Dershowitz’s presence came during the latest skirmish in the long-running legal battle between Philip Shawe, owner of transcription company TransPerfect Global, and Robert Pincus, formerly of Skadden, Arps, Slate, Meagher & Flom LLP.

Pincus was appointed by the Chancery Court to oversee the sale of TransPerfect when Shawe and his former co-founder could not agree on a way forward for the company. In that arrangement, TransPerfect was required to pay Pincus’ fees.

After the sale for $770 million to Shawe, Shawe filed suit in federal court, saying that Pincus inflated the cost of the sale. It also battled in Chancery Court, arguing that TransPerfect should not have to pay Pincus’s invoices without knowing how the fees were accounted for.

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Kathaleen St. J. McCormick

Thursday’s hearing was focused on TransPerfect’s refusal to comply with two orders from McCormick to pay nearly $5 million in fees to Pincus as well as more than $441,000 to Pincus’s lawyers, represented Thursday by Douglas D. Herrman of Troutman Pepper.

Dershowitz’s appearance comes during a busy week for him.

His name popped up again in documents related to convicted sex trafficker Jeffrey Epstein, whom Dershowitz  had represented.

Dershowitz responded with a 31-minute video welcoming the release of the Epstein material and saying it would prove he never did anything wrong. Dershowitz’s wife, Carolyn Cohen, was in the courtroom Thursday.

A former Harvard University law professor, Dershowitz also saw Harvard President Claudine Gay resign this week. She was hit by multiple charges of plagiarism, following a bad showing during Capitol Hill hearings about how Ivy League schools handled student protests after the Oct. 7 Hamas attacks and Israeli invasion of Gaza.

Dershowitz had said he was against Gay remaining president “on the merits.”

On Thursday, after Herman argued that TransPerfect’s avoidance of fulfilling McCormick’s orders must end, Dershowitz took the stand to say he’d brought checks with him that would cover the court’s order, but he wanted certain assurances.

TransperfectChancery Court

Alan Dershowitz

First, though, he told McCormick — who is head of the Chancery Court — he was glad to be back in Delaware. McCormick — who earned her undergraduate degree from Harvard — responded that she once had been a guest at a party at his Harvard home and felt it only fair to welcome him to her home.

Repeatedly during the proceedings, Dershowitz cupped his right hand behind his right ear, tilting it toward the judge, who spoke softly, and said he couldn’t hear her.

Dershowiz said he planned to give Herman two checks, one for nearly $5 million that TransPerfect owed Pincus and one for more than $443,000 to pay lawyer’s fees, which can run $2,000 for top attorneys. But, he stipulated, he wanted Herman to agree to keep that money in escrow, making it easier to claw back if TransPerfect’s federal case goes its way.

Dershowtiz at one point said that Pincus’ attorneys could have sent a first year associate to court to argue the contempt complaint when McCormick stopped him.

“Would you send a first year associate to argue against you,” McCormick asked Dershowitz.

“In this case, yes,” Dershowitz responded.

“I find you to be a credible person,” McCormick said, “but I don’t believe that.”

A few minutes later, Dershowitz told McCormick, “Our goal is, with respect, never again to see Your Honor, never again to enter the state of Delaware, never again to have any dispute with Delaware.”

McCormick told him that he seemed to be arguing points from the original case and not focusing on the contempt charges that were the point of the hearing.

Dershowitz argued that TransPerfect acted to be sure that it was able to appeal the rulings against it, a form of law he referred to as “soft contempt,” which he said stemmed from the Whitewater real estate scandal involving Hillary and Bill Clinton. Someone must be ruled against in order to appeal, according to soft contempt.

Dershowitz, ‘Bleak House,’ ‘Catch 22’

McCormick told Dershowitz that Shawe and TransPerfect paying up would settle the contempt claims, but Dershowitz argued that TransPerfect wanted some assurances that it would get back the $440,000 if it won it’s appeal.

He said the two most applicable court cases were not ones he could cite legally.

One, he said, was the 100-year-case at the heart of the 1852 Charles Dickens novel “Bleak House,” which involved a will that was contested for 117 years and only ended after all the money had been used for legal challenges. That, too, involved a chancellor in Britain’s Chancery Court.

The other was the case at the heart of  Joseph Heller’s 1961 novel “Catch 22.” In that case, an Air Force captain argues he’s become insane and unfit to fly missions, only to be told that if he’s smart enough to file that appeal, he can’t be crazy and will have to keep flying.

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McCormick told him that a better good faith move would be to simply pay what is owed, and Dershowitz again said he was prepared to do that and waved a blue folder he said was holding the checks.

McCormick told him that the only concession she would give TransPerfect would be to stay sanctions of the contempt order — which included Pincus’s suggestion that TransPerfect should pay $50,000 a day for not responding by deadline to the contempt orders to pay — pending the outcome of a federal motion that TransPerfect had filed Wednesday night.

When Herrman jumped up to say he didn’t know what was in the papers or checks, McCormick told him to take them to his desk and be sure they covered the expenses. 

Dershowitz said he wanted the court to understand that his client was not admitting that he was in the wrong.

McCormick responded that her only concession was that she would stay the sanctions but also stay the money they allegedly owe for Pincus’ defense against the federal securities fraud case.

After the court adjourned, Herrman declined to comment.

“I thought we made our point,” Dershowitz said. “It was a special pleasure to appear before a former student who has accomplished great things.”

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