Complaint Review: Transperfect

TransPerfect (Translations.com) co-founder and co-CEO, Elizabeth Elting filed suit to have other co-CEO, Phillip Shawe, removed from his position stating that Shawe, "has proven himself unfit to serve as a director or officer of TransPerfect, having engaged in conduct that this Court already has described as being so over the top and so off the charts that it immediately calls into mind his abilities to effectively run any corporation, even a mom and pop drug store." (source: https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=dvVYVVZMVZBLgtyOJOZ41w==&system=pro )

On May 23, 2014, Ms. Elting filed a petition in Delaware seeking a decree of judicial dissolution of TransPerfect and appointment of a custodian or a receiver.Elting further alleged that Shawe had engaged in secretly implementing raises and bonuses in violation of more than 20 years of TPI policy requiring that Mr. Shawe and Ms. Elting jointly approve such action as well as issuing a directive to have the computer removed from the office of the company treasurer, causing a payroll crisis jeopardizing Transperfect's employees from getting paid on time. Futhermore, Mr. Shawe continued "persistently and profanely harassing, abusing, threatening and intimidating" the company treasurer.

Mr. Shawe's intrusions proved so egregious that Elting sought, and obtained, a temporary restraining order barring Mr. Shawe from engaging in any activity relating to company payroll. She also alleged that Mr. Shawe was endangering TPI's tax status by refusing to pay additional distributions necessary to ensure the proportionality of tax payments. This refusal allegedly exposes both Ms. Elting and Mr. Shawe to potentially ruinous tax liability.Counter-AllegationsOn May 22, 2014, Mr. Shawe commenced an action against Ms. Elting, asserting claims for, among other things, breach of fiduciary duty and corporate waste.Mr. Shawe's counter allegations stated that, on a number of occasions, Ms. Elting was taking actions designed to seize control of the banking and accounting functions of Transperfect, and to retaliate against the back office employees who she deemed loyal to him.

Citing a pattern of financial misconduct, including unauthorized distributions of company funds. One such case in the amount of $21 million to pay for Ms. Elting' s personal taxes. Mr. Shawe further alleged that the company treasurer, with Ms. Elting's authorization, illegaly paid herself a $25,000 bonus outside of company policy. Mr. Shawe also alleged that Ms. Elting's personal housekeeper was carried on Transperfect's books as an executive assistant and that she misappropriated Transperfect's funds by causing the company to pay $144,000 to the law firm in charge of her personal account. (source: http://www.nybusinessdivorce.com/files/2014/08/Elting-1.pdf)

A Manhattan judge handling the case appointed former Divorce Court Judge Harold Beeler to help referee the business dispute and act as a medium for business communication. Elting's attorney told the judge that Transperfect's Park Avenue offices have become a "war zone" with accusations for Shawe hacking into Elting's Facebook account and Elting digging her high heel in Mr. Shawe's leg. Both continue to run the multinational company to this day. (source: http://nypost.com/2014/06/17/transperfect-co-founder-files-court-order-against-ex-fiance/)