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Delaware Judge Calls 'Strike Two' on Shawe Over Requested Filing Injunction

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Phil Shawe.[/caption] A federal judge in Delaware threatened TransPerfect Global Inc. CEO Philip R. Shawe with a nationwide filing injunction Friday if he continues to pursue litigation stemming from the court-ordered sale of his translation-services company. U.S. District Judge John E. Jones III issued a "strike two" against Shawe, after the TransPerfect co-founder filed a $75,000 tort claim against Delaware law firm Potter Anderson & Corroon for allegedly filing a misleading application for attorney fees during the underlying litigation. Potter Anderson, which represented Shawe's rival Elizabeth Elting in the Chancery Court action, blasted the lawsuit last month as a meritless, bad-faith attempt to relitigate issues already decided in the Delaware state courts. The firm asked for sanctions against Shawe and his attorney Christopher M. Coggins, including an order that would prevent Shawe from filing further litigation related to the Chancery Court dispute. On Friday, Jones said Shawe filed the lawsuit specifically to harass the firm and to abuse the court system, but he stopped short of issuing a "drastic" filing injunction. Instead, he dismissed the suit with prejudice and ordered Shawe and Coggins both to pay Potter Anderson's attorney fees. However, the judge kept open the possibility that any further litigation could result in a filing injunction. "We express our opinion that any future court plagued by subsequent frivolous lawsuits brought by Shawe to collaterally attack the Delaware rulings should very seriously consider imposing an injunction to put a final end to this behavior," said Jones, who is visiting from the Middle District of Pennsylvania, in a 13-page memorandum and order. The ruling followed concerns in other courts that Shawe was using litigation to attack his opponents and undermine Chancery Court Chancellor Andre G. Bouchard's decision to sell TransPerfect amid hopeless infighting between Shawe and Elting, the company's two founders. In June, New York Supreme Court Commercial Division Justice Shirley Werner Kornreich issued the first warning about an injunction against Shawe over a frivolous lawsuit he filed against the custodian appointed by the court to oversee TransPerfect's sale, saying "it is time for this saga to end.” Shawe's lawsuit against Potter Anderson, filed in September, accused the firm of supposedly fudging the numbers in sworn affidavits last year documenting the firm’s expenses related to its work on behalf of Elting in the Chancery Court. There, Shawe was ultimately sanctioned $7 million for litigation misconduct, including lying under oath, and was ordered to pay Elting's fees. Jones said Shawe provided no support for the amount he requested from Potter Anderson, and instead used the suit as a collateral attack on the state court's rulings. Any "reasonable attorney," he said, would have recognized Shawe's purposes According to the order, Shawe and Coggins will each pay half of Potter Anderson's fees. The firm is due to file a proposed order on the sanctions ruling within 10 days. Shawe, who has reportedly reached an agreement to buy out Elting's stake and keep control of TransPerfect, said he was "grateful" Potter Anderson did not succeed in its request for a nationwide filing ban. "In general, I continue to believe having litigation about litigation itself, is not productive—especially because we are so close to final resolution in the underlying dispute," he said. "As I have throughout the litigation, I am continuing to make best efforts to settle with Ms. Elting on all fronts, and will continue to do so." Coggins did not return a call seeking comment on the ruling Friday, and an attorney for Potter Anderson did not respond to a message requesting a comment. The case was captioned Shawe v. Potter Anderson & Corroon.

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