DE Judicial Watchdog Releases Factsheet on Chancery Court, Makes Activists and Experts Available for Comment

WILMINGTON, Del.–(BUSINESS WIRE)–Today – following news that Twitter Inc. filed a lawsuit against Elon Musk for not going through with his purchase of the social media giant – Citizens for Judicial Fairness, a Delaware-based judicial fairness advocacy group committed to shining a light on the First State’s Court of Chancery, has announced it is releasing a fact sheet about the court and making the group’s resident experts and advocates available to the press for comment.

Said Rev. Al Sharpton, “While many Americans may not have heard of the Delaware Chancery Court, it is there that more than half of the nation’s Fortune 500 companies are presided over by an opaque, archaic judicial institution. It is there that a Court with seven justices has not one person of color on the bench, and has only had one Black justice in the entirety of its 230-year history. And it is there that those justices operate in secret, with no cameras or microphones in the courtroom, few – if any – public financial disclosures by justices, and with barely a modicum of transparency in how the Court operates.”

CHANCERY COURT FACTS

A Court System Ripe for Corruption & Backroom Deals

Unlike most other courts across our country and the federal government. The Chancery Court does not use randomized wheel spin for case assignments. Currently, Chancery Court Chancellors are free to select cases based on their own self-interest. This leads to corrupt practices much like former Chancer Bouchard’s decision to appoint former employer Skadden Arps as custodian for a high profile case that charged millions in unfair fees. To make matters worse, there are no cameras in the courts for public records or accountability.

Shady Judicial Rulings with ZERO Accountability & Transparency

In the case of TransPerfect, Chancellor Andre Bouchard put the company up for auction and utilized the seldom-used mechanisms of appointing a custodian despite the company flourishing with over $470 million in revenue despite previous offers to buy the company outright by partner Phil Shawe. Bouchard then allowed the custodian unbridled authority over the entire sale, gave him carte blanche to hire consultants, approved non-itemized billing of exorbitant fees and, finally, would not grant Shawe, who was ordered to pay the custodian, permission to review Shawe’s own bills.

A Court Sorely Lacking Diversity

The Chancery Court of Delaware has only had one black judge (Tamika R. Montgomery-Reeves) in its 230 year history with Delaware’s entire judicial system plagued by a lack of diversity. People of color, who represent nearly 40% of Delaware’s population, make up just 15% of the judges who sit on the state’s top courts, but comprise 62% of the state’s incarcerated population. Because of a secretive, rigged process, Delaware’s judicial nominations continue to promote the interests of an elite few at the expense of Delaware’s diverse population & companies.

Decisions Based on Connections, not Facts.

In an appeal decision from the Delaware Supreme Court, Justice Karen L. Valihura gave the following dissenting opinion on the shady billing practices of the Chancery Court & its custodian in the TransPerfect case, “the Court of Chancery failed to narrowly tailor the scope of the custodian’s authority.”

A Neverending Revolving Door.

Delaware Judges’ Code of Judicial Conduct – Notably, does not prohibit any activity upon the judges’ resignation, such as taking a job at a corporate law firm that the former judge dealt with while on the bench. The result?

  • Leo Strine Jr.: Skadden Arps –> Supreme Court Chief Justice –> of counsel at Wachtell, Lipton, Rosen & Katz

  • Stephen Lamb: Skadden Arps –> Chancery Court Chancellor –> of counsel at Paul, Weiss
  • Andre Bouchard: Skadden Arps –> Chancery Court Chancellor –> partner at Paul, Weiss

Egregious Mistakes. But no Reform

In a truly preposterous outcome in Ingres Corp. v. CA Inc., a 2010 breach of contract case where both sides agreed (when does that happen?!) the judge had erred. Vice Chancellor Leo E. Strine Jr. said, “I forgot this oral statement and delved only into the voluminous record. As indicated above, this record was confusing and I came away from it with the wrong impression. …I overlooked this deposition testimony and instead focused upon the written documents in the record when drafting the Post-Trial Opinion. In short, I blew it.” He goes on, “my original factual finding to the contrary was inaccurate.” Yet, Strine, even after admitting how his significant error impacted his prior conclusion, decides the error does not materially change the outcome of the case.

RECENT ACTIVISM BY CITIZENS FOR JUDICIAL FAIRNESS

Citizens for Judicial Fairness, formerly known as Citizens for a Pro-Business Delaware, has been advocating for transparency, accountability, and diversity in the Chancery Court since the unprecedented forced sale of TransPerfect Global, a profitable translation and language services company, by Chancery Court Chancellor Andre Bouchard. The sale resulted in a disastrous court-appointed custodianship by Skadden Arps’ Robert Pincus, who bilked TransPerfect for tens of millions of dollars without saying why or what for. Sharpton, CJF, and activists have been vocal about their demands for justice systems that work for diverse everyday employees rather than legal and corporate elites.

Contacts

Chris Coffey, ccoffey@tuskholdings.com

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