Sean Rayford/Getty Images, YouTube
Shirley Shawe is a private citizen who recently bought over $500,000 of ad-time in early voting states to slam Joe Biden over a past business dispute.
The ad is focused on the Delaware Chancery Court system which was formed to adjudicate business disputes between corporations. Shirley Shawe and her son, Phil Shawe, were previously involved in a contentious, 4-year legal dispute over the ownership and sale of his company TransPerfect in the chancery system.
The ad, which can be viewed here, opens with a clip of Joe Biden defending the chancery court during an argument with Elizabeth Warren in a 2005 Senate Judiciary Committee Hearing, “to my colleagues suggesting that the Delaware Chancery Court is not open, I find it outrageous, such a statement. Maybe you can tell me, is it not a competent court? Is it not an open court?”
“Employees from companies like Enron literally cannot go to Delaware and hire local counsel” Warren responds “and that effectively cuts thousands of small employees and local trade creditors. If they can’t afford it, they’re not there”
The ad also explains how The Center for Public Integrity ranked Delaware 48th out of 50 states on “key issues like transparency and accountability”. It then calls the court “too male and too white”.
The ad is set to run in Iowa and New Hampshire, the two first primary states, and in Biden’s home state of Delaware.
Shawe’s press representative, Juda Engelmayer, told CBS News that Shawe is a “registered Republican” and in a statement, Shawe defended her decision to run the ads, “As a citizen, I’m free to use my voice, and I will not agree to remove stop my campaign, until the issue of Chancery Court corruption is addressed.”
Both Biden and Warren’s campaigns disagreed with the ad and are calling for it to be removed.
“The ad misrepresents Vice President Biden’s position in this exchange from 2005 by manipulating footage to suggest he means one court when he means another,” Biden campaign national press secretary Jamal Brown said in a statement. “It’s a clear reminder of the way that third-party money poisons our politics with false attack ads, and it has no place in this race.”
Deputy communications director for Warren’s campaign, Chris Hayden told CBS News that the “Ad should be taken down.” adding “Elizabeth does not believe individual donors should have an outsized influence in this primary, and has consistently said that Super PACs or individuals with the means to finance ad campaigns on their own should stay out of the primary,”
Warren and Biden will face off in the third Democratic primary debate next month and the subject of corporate interests will most certainly be one of the central themes.
Shirley Shawe has been calling for an overhaul of the chancery court system since 2017. She was a key figure in one of the most acrimonious business disputes in recent memory involving her son’s company, TransPerfect.
Here’s what you need to know.
1. She Owns 1% of TransPerfect
CEO of TransPerfect Phil Shawe
Shirley’s son Phil Shawe is the co-founder, owner, and current CEO of TransPerfect, the world’s largest language translator and a global corporation valued at $800 million.
Phil Shawe started the company with his ex-girlfriend and former business partner Liz Elting in Shawe’s dorm room in 1992 and agreed to split the company 50-50. With Shawe and Elting at the helm, the company hit $10 million in annual sales by 1998, $50 million by 2004, and only got bigger from there.
TransPerfect reached $705 million in total sales in 2018 and currently has 4,000 full-time employees in more than 90 cities along with a network of 15,000 freelancers and the capability to translate 170 languages.
At one point during their explosive growth period, Phil transferred 1% of his ownership to Shirley.
2. Shirley Shawe Was a Key Figure in the Lengthy Legal Battle over Transperfect’s Ownership
Shirley Shawe
The start of Phil and Liz’s public legal battle began in 2011 when private disputes between them became public and started interfering with how they ran TransPerfect. Phil and Liz were engaged for a year before Elting broke it off which may have caused the initial rift that grew into a very ugly, public, and lengthy legal battle.
It started in 2011 when Elting was upset with some of Shawe’s business purchases that included using corporate frequent flyer miles to buy a plane ticket for his fiancee, “Your priorities are all wrong now, and we’re not meant to be business partners,” she wrote in an e-mail according to Forbes, “[Let me know] how much you want to buy me out for–I’d like to make this amicable.”
Things escalated from there. Elting allegedly pouring a bottle of water on Shawe’s head during a corporate meeting and the two were constantly questioning and sabotaging each other’s business decisions. Shawe had finally had enough and offered Elting $150 million, $100 million in cash, for her stake in the company. Elting responded with a $300 million cash offer. Shawe rejected, and the two took the battle to court.
It was during this nearly 4-year legal battle when Shirley Shawe got involved in the dispute and started her battle with the Delaware Chancery Court system.
Liz and Phil took their dispute to the Delaware Chancery Court system where they tried to negotiate a sale of Liz’s stake in the company.
After years of deadlocked negotiations, Court Chancellor Andre Bouchard ruled that the TransPerfect should be sold to third parties through an auction to be overseen by corporate attorney Robert Pincus, “Disallowing third-party bidders … would reduce competition in the sale of the company, contrary to the objective of maximizing stockholder value,” Bouchard wrote in his decision.
His rationale was that Shawe’s actions had made it less likely that an outsider would pay full price, “What rational person would want to step into Elting’s shoes to partner with someone willing to ’cause constant pain’ and ‘go the distance’ to get his way?”
It was a controversial decision that wouldn’t allow Shawe or Elting to run the business or be involved in its sale. Elting and her team of lawyers were in favor of the ruling. Shirley and Phil were opposed because it meant giving up control of the company and they feared many of their 4,000 employees would lose their jobs.
Phil filed a Federal suit calling the sale of TransPerfect “unconstitutional”. During the negotiations, Shirley submitted a proposal where she offered to give her 1% to Elting so that the sale would be approved and allow Phil to maintain ownership.
Phil Shawe Twitter PhotoPhil Shawe
“Their press releases and other media pronouncements clearly demonstrate that Ms. Shawe’s supposed offer is just another part of the Shawes’ unprecedented public campaign to attack the court’s reputation and its rulings,” wrote Kevin Shannon, a Potter Anderson & Corroon lawyer who is representing Elting, about the proposal in 2017.
Shirley fired back in an interview with the Delaware News Journal, “Liz began this whole pursuit because she said she was unable to run the company, but now it is becoming clear that she never wanted to actually run TransPerfect,” she said, adding, “I tried to give her 51 percent control and now she admits that she just wants to sell it and she wants to sanction me for trying.”
Andrew Bouchard denied Shawe’s proposal and her appeal to the Delaware Supreme Court was also denied. Her only option at that point was to go to the United States Supreme Court.
3. She’s Made Attack Ads in the Past
Shirley Shawe has experience using her money and influence to sway public opinion. During the legal battle of TransPerfect and in the midst of Shirley’s proposal being denied by the Delaware Chancery Court, she tried to drum up some public support.
In 2017, a group of 700 TransPerfect employees formed Citizens for Pro-Business Delaware, a lobbying organization dedicated solely to eliminating the Chancery Court’s authority to sell a business, specifically TransPerfect.
According to Delaware Online, the group bought thousands of dollars of radio, print and online ads and sent mailers to more than 35,000 Delaware households.
Shirley Shawe was the driving force behind Citizens for Pro-Business Delaware. She paid for and starred in the television ad which appeals to the emotions of the people of Delaware, pleading that if the sale goes through “not only will these people lose their jobs, but their jobs will go overseas.”
The same organization is currently funding the Joe Biden attack ads.
4. She Coined the Term “Dexit”
Shirley Shawe
In 2018, Phil Shawe put together the most competitive bid offer for the auction of TransPerfect and ended up buying the company for $770 million. Once the appeal date passed on August 1, 2018, he immediately moved the company to Nevada to avoid any risk of being tied up in the Delaware Chancery Court again.
Shirley Shawe said of the move, “The expense burden some jurisdictions place on resident companies through overly high litigation costs is simply staggering; our situation in Delaware was a perfect example. Without significant legislative reform, I would not be surprised if TransPerfect’s ‘Dexit’ becomes part of a larger trend.” Adding, “Nevada has a reputation for a rational and predictable judiciary, as well as one that operates with lower litigation costs and promotes settlements.”
‘Dexit’ is a take on the term “Brexit” which refers to the withdrawal of the United Kingdom from the European Union in 2016.
5. She Filed a Defamation Suit Against Liz Elting’s Law Firm
Shirley Shawe filed a defamation suit against Liz Elting’s lawyers Kramer Levin Naftalis & Frankel, claiming that the lead attorney on the case “crossed the line” by making false statements that “were intended to damage Shawe’s business and personal reputation” while talking to a reporter.
According to Delaware Business Now, Shirley also released a YouTube video that highlighted “three instances in which Kaufman’s statements outside the courtroom directly conflict with what he said during oral arguments on the appeal of the unprecedented decision of the Chancery Court last month”.
Delaware Supreme Court Judge Shirley Werner Kornreich, J. “dismissed the complaint with prejudice, unanimously affirmed, with costs.” on March 8, 2018.