The Pizza Principle

From Delaware Chancellor Bouchard in yesterday’s decision in In re Transperfect Global, Inc. / Elting v. Shawe:

Nine years ago, in shifting fees where a litigant had advanced frivolous arguments, then-Chancellor Strine remarked that “it is more time-consuming to clean up the pizza thrown at a wall than it is to throw it.” The “pizza principle” is on full display in this decision.

Before the court are petitions the Custodian of TransPerfect Global, Inc. filed for reimbursement of attorneys’ fees and expenses he and his counsel incurred from May 2019 to December 2020. The amount is large—approximately $3.66 million. As detailed below, however, the vast majority of this amount was incurred because TransPerfect and its 99% owner, Philip R. Shawe, kept throwing pizzas at the wall. Among other things, they sued the Custodian in Nevada state court concerning two of his fee petitions in contempt of an exclusive jurisdiction provision in an order of this court; prematurely made not one, but five different attempts for appellate review of the contempt decision; objected in 192 pages of briefing and 108 pages of expert submissions to virtually every entry in the Custodian’s billing records; and filed three non-meritorious motions attacking various aspects of the fee petitions.

In this unduly lengthy opinion [64 pages, and 494 citation footnotes]—necessitated by having to clean up the “extralarge, deep-dish pie[s] with lots of toppings” that TransPerfect and Shawe have thrown against the wall—the court grants the Custodian’s fee petitions in the amount of $3,242,251, to be paid in the manner explained herein.

From a 2016 story in Forbes (Katia Savchuk), some backstory on the corporate breakup that led to the litigation:

Elting and Shawe built the company from a dorm-room startup to a global leader with $505 million in sales. But tensions between them flared up five years ago, spilling into legal battles in two states with mortifying episodes of infighting. There was Shawe charging the petite Elting with battery by high heel, his breaking into her office and stealing her confidential e-mails with attorneys, and F-bombs galore. Despite an astonishingly acrimonious relationship, the ex-lovers have thrived as business partners, and out of their dysfunction has grown a company that has, ironically, solved one of the world’s biggest problems—how to communicate better.