Delaware Court of Chancery.

The details of Philip R. Shawe's $785 million deal to buy TransPerfect Global Inc. emerged in a Wilmington courtroom on Wednesday, as attorneys for his rival, Elizabeth Elting, argued for the unraveling of the sale.

In a hearing that lasted more than four hours, it was revealed that Shawe beat out two other bidders in the fourth round of a court-ordered auction to maintain control of the company he and Elting started in 1992.

Shawe's final-round offer of $770 million, his attorneys said, was the highest offer on the table as bidding concluded on Nov. 15, 2017, prompting Robert B. Pincus, the court-appointed custodian of the company, to enter exclusive negotiations with Shawe in the three days that followed. Those talks produced an ultimate bid of $785 million, which Pincus accepted when he entered a securities purchase agreement on Nov. 19.

But attorneys for Elting argued that by that point Pincus' impartiality had been compromised by an unrelenting public campaign to discredit the custodian and undermine the sale process as whole. For more than an hour and a half, they told Delaware Court of Chancery Chancellor Andre G. Bouchard that Pincus was facing intense pressure to wrap up the modified auction and likewise extinguish lawsuits, filed by Shawe, that targeted him personally.

It was that conflict of interest, they said, that led Pincus on Nov. 19 to enter the agreement with Shawe and to rebuff a later attempt by private equity firm H.I.G. Capital to increase its offer to purchase TransPerfect from $750 million to about $900 million.

Bouchard, Elting's attorneys said, should invalidate the deal and force Pincus to negotiate directly with H.I.G. in order to meet the custodian's goal of maximizing value for the company.

However, they faced a tough line of questioning early from Bouchard that seemed to subside later in the hearing, which started around 10 a.m. Under the terms of a 2016 ruling granting Elting's request to sell TransPerfect, Bouchard must sign off on the sale agreement. That ruling would then be subject to appeal before the Delaware Supreme Court.

Philip S. Kaufman, a Kramer Levin Naftalis & Frankel partner representing Elting, acknowledged during the arguments that Bouchard appeared skeptical of Elting's position, but he pressed ahead with claims that Shawe's intentional misconduct during the sale process had scared away some bidders and depressed offers from others.

He also said that Pincus, a partner with Skadden, Arps, Slate, Meagher & Flom, had made critical and “fundamental” accounting errors surrounding tax liability, which undervalued H.I.G.'s bid and swung Pincus' decision in favor of Shawe.

Pincus' attorney, fellow Skadden partner Jennifer C. Voss, stood by Pincus' analysis and said she could respond to Elting's tax argument in writing within five business days.

Voss defended the agreement, saying that any challenge would have to meet the high bar of showing that Pincus had abused his discretion in striking the deal with Shawe. Pincus, she said, had not taken Shawe's litigation seriously and was not compromised by Shawe's public attacks.

She also noted that, under the agreement, Elting would receive approximately $300 million for her half of the company.

Meanwhile, Kaufman and his Potter Anderson & Corroon co-counsel Kevin R. Shannon, said that, even without the tax errors, Pincus failed to secure a better deal with H.I.G. that would have also kept TransPerfect's 4,000-employee workforce intact and maintained the company as a going concern.

According to Kaufman, H.I.G. planned to use its $900 million bid to buy TransPerfect and then enter into a merger with Lionbridge, a rival translation-services company, which H.I.G. also owns. H.I.G., he said, valued TransPerfect's business more than it did Lionbridge's and had committed to expanding its workforce.

Kaufman said there was also an informal agreement in place to make Elting president of the combined company, with an equity stake in the new firm. Negotiations between Pincus and H.I.G., he said, could be completed in a “matter of days.”

Meanwhile, Kaufman said, a third bidder had reduced its initial bid of between $900 and $950 million to $725 million in the third round, specifically citing the serious threats associated with Shawe's behavior.

“Locking up a deal with Shawe was an additional abuse of discretion, and an egregious one as well,” he said.

Voss, however, said that Shawe's offer, the highest at the end of bidding, maintained the status quo and avoided post-merger shake-ups that could have hurt TransPerfect's workers. As for Shawe's alleged misconduct, she said Elting could have moved for sanctions during the sale process, but opted instead to levy her allegations after the sale agreement was entered.

“She waited until after the recommendation was made, and filed it simultaneously with her objections,” Voss said, saying a “feeling of laches” attached to the strategy.

Bouchard wrapped up the hearing around 2:15 p.m., saying that he needed “a little time.”

“I'll deal with it as promptly as I can,” he said, saying there were other court matters that he had to attend to.

It was not clear when Bouchard would return a ruling on Pincus' recommendation.

Shawe, who was not in court on Wednesday, said Elting was “not a buyer” in the sale process and had been “dishonest” about her relationship with the bidders.

The case is captioned Shawe v. Elting.