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“Business Divorce” Highlights the Problems of Love & Commerce in New York

An eye popping business dispute between former lovers is putting the conflict inherent in building a business with a romantic partner on full display.

The issues involved may even end up before the Supreme Court, and the parties may one day come to wish they’d married and used the mechanisms in divorce court to sort out the status of their company.

In the meantime, years of back and forth lawsuits, staff departures, and even lost clients have been the price of continuing to work alongside your ex.

Now, the company itself may be sold under court order, separating the parties once and for all.

In 1992, a pair of graduate students at NYU’s Stern School of Business opened a language translation firm together in their dorm room.

Philip Shawe and Elizabeth Elting guided the company through early years of explosive growth and in 1996, announced their engagement to each other.

TransPerfect Global, Inc., was doing well and expanding widely, and the future seemed bright for the couple.

While TransPerfect continued to profit, their relationship deteriorated, and in 1997, Elting called off the engagement.

According to court papers, Shawe became, “very angry and got under the bed and stayed there for at least half an hour.”

Despite their breakup, both remained on at the head of TransPerfect, which has now posted 22 consecutive years of growth, has an estimated value of $470 million, and employs more than 3,000 workers in 85 offices around the globe, translating 170 languages.

It is, by all accounts, a remarkably successful venture.

Elting owns 50% of the company, Shawe owns 49%, and his mother controls the final 1% of the stock.

In the nearly two decades since they split up, conditions within the company have broken down along similar lines.

Minor disputes, even petty disagreements, have repeatedly blown up into huge battles, often drawing in other employees and alienating the company’s customers.

Things seem to have escalated wildly around 2011, when Elting lashed out after learning that Shawe used corporate airline miles to buy a plane ticket for his fiancee, without her permission, and had been granting raises to workers without her authorization.

Soon thereafter, Elting decided she’d had enough and offered to let Shawe buy out her stake.

The company generates around $80 million in profits, and whether Shawe lacked the liquidity to purchase Elting’s shares or simply didn’t want to go through with it, the buy-out never happened.

That’s when everything really fell apart.

Shawe demanded that the company open an office in Montpelier, France, threatening to hold payroll hostage and freeze the company’s accounts if Elting didn’t agree.

Court records show that Shawe broke into Elting’s office and hacked into her email and Facebook page.

Shawe, meanwhile, wrote in an affidavit to the court that, “She has physically assaulted me on numerous occasions including incidences of kicking, pouring water on me and even intentionally dousing me with hot coffee.”

Lawsuits played out in Manhattan, where the parties live, including a 2014 request from Shawe for an emergency order of protection against his business partner.

Shawe told the court about an encounter where Elting, he claimed, “made aggressive comments, jumped up from behind her desk, raced across the room, came at me, intentionally pushing and shoving me into the wall.” Then, she, “kicked me very hard twice on the right leg with dress shoes that were pointed at the toe.”

Elting’s lawyer argued that she, a 100 pound woman, was the victim in the interaction.

Manhattan Judge Debra James responded by telling them to take it up with the proper authorities. “If either party is in fear of their safety,” she wrote, “the remedy is to go to the police or criminal court.”

Later, Manhattan’s Judge Melvin Schweitzer appointed a former matrimonial judge, Harold Beeler, to referee their dispute, since it had all the characteristics of a bad divorce, without the parties having actually gotten married.

Now, the case is being heard before Delaware Chancery Court Judge Andre Bouchard, who has taken the unusual step of ordering both out of the company, and for TransPerfect to be sold.

After evidence of how Shawe and Elting’s disputes have disrupted the workplace came to light, Bouchard felt he had to act.

Perhaps responding to the departed Human Resource Director’s resignation statement that, “I cannot be complicit in this pervasive and continuous hostile environment where inappropriate behavior impacts the morale, health and well-being of myself and the staff,” Bouchard issued a far-reaching ruling.

Calling TransPerfect, “a corporate hell” of “complete and utter dysfunction,” he blamed the “nuclear war” between Shawe and Elting for the problems.

“The painfully obvious conclusion,” Bouchard wrote, “is that Shawe and Elting need to be separated from each other in the management of the company for its own good.”

Shawe has vowed to appeal all the way to the Supreme Court if need be.

“It’s never happened in American history, for a private, profitable business to be taken over by the government in a forced sale,” he told the New York Post.

While not everyone’s business will span the globe, it’s extremely common for married couples to share an LLC, operate a franchise, and otherwise work together to support a business they’ve built together.

When the marriage ends, one of the big questions facing both parties will be how to unwind the business interests, and whether they even need to.

While the couple in this story seems to have lost the ability to engage with each other in the barest of civil ways, your situation may be different.

But will it be in five years? What if your spouse re-marries while you’re still working together or sharing profits from a venture?

When dealing with complicated divorces that include a shared business, get the best legal help available.

The attorneys at Zelenitz, Shapiro & D’Agostino help people in Queens come out of a divorce in the strongest position possible, protecting their assets and their interests all along the way.

Call us today at 718-523-1111 for a free consultation with an experienced Queens divorce lawyer.