EXTREMELY IMPORTANT REVELATION FOLKS
Look folks, I would like to think that I am the first one who contemplated what I see as the lawfirm of Skadden Arps’ inappropriate influence in the Delaware courts, but in fact I’m 20-plus years late! If my thinking is accurate, it is my opinion that Bouchard must be a bit arrogant to be so obvious in his actions, but these “Good Ole Boys” might have been pulling the wool over the Delaware shareholders and citizens for a very long time.
Everyone, please read carefully this old article below and see if you see the same parallels I do in regard to the present day situation with the Skadden cohorts — Bouchard, Strine, Pincus, and Voss, seemingly and apparently representing the current situation in Delaware and in the Chancery Court system. Folks, perceived Delaware Chancery Court corruption is what the New York Times was writing about in 1995!
In all my time researching Bouchard’s behavior and methods, from when he first got my attention in regard to the Register of Wills office, I had never come across this amazing article. Being the curious dude I am, I picked the brain of a SEO professional I know, and guess what? His guess is someone is paying a pretty penny to bury this horrific press from the public — and has been successful — until now! Some establishment folks in the legal profession may call this a stretch, however all things considered, things have been the same, in my educated opinion, since 1995 with Delaware still having an incestuous judicial system that is well protected politically. Expect a ruling coming against TransPerfect employees for Skadden — 20 years in the making!
Read this story from the New York Times from May 23, 1995! And please tell me your thoughts! In my view, nothing has changed!
May 23, 1995
The Delaware judicial system, chief arbiter of right and wrong in corporate America, is on trial.
Critics say a single national law firm — Skadden, Arps, Slate, Meagher & Flom — appears to have influenced the makeup of the Delaware Supreme Court, the judicial body that has dominated corporate case law in America for the last century and that wrote the rulebook for the 1980’s takeover binge.
A Skadden partner played a role in advising Gov. Thomas R. Carper, a Democrat, to remove a Supreme Court judge who had ruled against one of the firm’s clients, the New York financier Ronald O. Perelman. Moreover, several current and former members of the firm have close ties with the Governor or are serving in his administration. Governor Carper’s critics fear that Skadden’s prominence in Delaware politics will erode the judiciary’s reputation and lessen its sway over corporate governance in the United States.
A lot is at stake. Almost half of the Fortune 1000 companies are registered in Delaware. They, and everyone who buys them or sues them or manages them, are subject to Delaware law as interpreted by the state’s business-law tribunal, the Court of Chancery, and its overseer, the state’s Supreme Court.
It was the Supreme Court whose rulings pushed Paramount out of the bidding for Time Inc. in 1989 and paved the way for the Time Warner merger, for example. And Delaware judges presided over the $25 billion RJR Nabisco buyout in 1988.
Today, one year after Justice Andrew G. T. Moore 2d was ousted from it, the same Supreme Court will review the lawsuit that some critics have linked to the controversy: Cinerama v. Technicolor. It pits Michael Forman, the movie-theater baron from Los Angeles, against Mr. Perelman, whose fortune and reputation were built on his acquisition of Technicolor more than a decade ago.
Legal scholars and corporate lawyers will be watching closely as the court once again reviews a lower court ruling favorable to Mr. Perelman. Mr. Moore, before his departure from the bench, had twice joined in unanimous decisions that sternly reversed trial court decisions favorable to Mr. Perelman, Skadden’s client.
Recently, Mr. Moore ended a yearlong silence to declare his view that his departure was politically inspired. “The citizens of Delaware and the corporate community should have grave concern about the circumstances that prevailed in the selection of state judges,” he said in an interview. “If the process was designed to insulate the courts from political influence, unfortunately, it does not appear to have done so.”
Many others agree. Indeed, Governor Carper’s action has split the Delaware bar, outraged legal scholars and even drawn fire from institutional investors. Sarah Teslik, executive director of the Council of Institutional Investors, called state senators last summer to protest the Governor’s action and told The National Law Journal: “The Governor thinks that if he makes Skadden happy he makes C.E.O.’s and corporate America happy; he’s forgotten that corporate America has owners.”
Supporters of Governor Carper defend his decision, saying Mr. Moore was an unpopular and razor-tongued jurist who lacked the “temperament” to serve on the high court. Besides, they note, Mr. Carper had pledged to appoint more women to the state’s courts, and the woman who replaced Mr. Moore is the first to serve on the state’s top court.
Even so, the Governor’s failure to reappoint Mr. Moore to a second 12-year term broke sharply with a tradition stretching back more than half a century of letting well-regarded judges stay on the bench for as long as they pleased.
Joseph Flom, a senior partner at Skadden in New York, said he was stunned when the “extremely competent” Mr. Moore was not reappointed. He denied his firm had played any improper role in Mr. Moore’s exit, and insisted Skadden sought no political influence over other court appointments in Delaware.
“That suggestion boggles my mind,” Mr. Flom said. “These conspiracy theories just don’t stand the light of day.”
But even Mr. Flom agreed that Delaware judges today probably view their future with less certainty. “The Governor has made them feel less secure that they will be reappointed, a little more edgy,” he said. “Is that good or bad? I don’t have a clue.”
It is perhaps understandable that Skadden’s name and the Technicolor case have been invoked by Mr. Moore’s angry defenders.
Rodman Ward Jr., a Skadden partner who has represented Mr. Perelman in the Technicolor case for a decade, was an influential member of a state panel that declined to recommend Mr. Moore to the Governor for reappointment. Richard G. Elliott Jr., a partner in another Wilmington firm that is representing Technicolor in the case, was also on the nine-member panel.
Even more troubling to some in Delaware’s legal community, the panel reportedly recommended only one candidate, Carolyn Berger, to replace Mr. Moore, rather than following the usual practice of putting forth a slate of candidates. Ms. Berger could not take part in today’s Technicolor hearing. The reason: She used to work at Skadden.
Mr. Ward and Mr. Elliott both denied that Mr. Moore’s past decisions had any influence on the panel’s deliberations. They said they saw no reason to abstain from reviewing Mr. Moore simply because he had joined in rulings unfavorable to their firms.
There are other ties between Skadden and the Carper admininstration. A former Skadden associate, Leo Strine Jr., is the Governor’s chief counsel. And a Skadden partner, Steven J. Rothschild, was a key county finance chairman for Governor Carper, and is a friend of Judge Berger and her husband, Fred Silverman, who has also been named to a judgeship by Governor Carper.
William Prickett, an influential third-generation Delaware lawyer, has warned the Governor that “the perception is widely held that the important function of nominating judicial officers for the Supreme Court of Delaware has been subverted to achieve your political ends.”
A senior aide to Mr. Forman, the plaintiff in the lawsuit against Technicolor, said he believed the reputation of the Delaware court system had already been compromised.
“Look at the power!” said James Cotter, Mr. Forman’s partner and head of his financial interests. “If you live in that close-knit, insular environment, and you see a Supreme Court judge get defrocked — and there’s no gross impropriety involved at all — the message is clear: ‘Hey, watch out! You be nice to Skadden, Arps.’ It is enough for me to try to avoid the jurisdiction if I can.
“Mr. Flom said it was “nonsensical” to link Mr. Moore’s departure and Skadden’s role in the Technicolor case.
But there is one other small link between Governor Carper and the personnel in the Technicolor case: Mr. Carper’s 1992 campaign got $1,200, the maximum allowable gift, from Mr. Perelman’s Revlon Corporation. According to state records, Revlon had never before contributed to a Delaware gubernatorial campaign.
Revlon was hardly alone. Ever since the merger mania of the 1980’s, money has been flooding into Delaware electoral politics — notably from the financial centers of New York and Philadelphia. Contributors to the winning election campaigns of Mike Castle, a Republican, in 1984 and 1988, and to Mr. Carper in 1992, read like a Who’s Who of Wall Street.
Mr. Carper raised a record $1.2 million, nearly double his predecessor’s war chest. And at the center of his fund-raising effort was Mr. Rothschild of Skadden’s office in Wilmington, which also provided legal advice to the campaign. At least one other Skadden partner was a substantial contributor, as well. Although Mr. Flom called Skadden “completely bipartisan,” no local Skadden partner reported making a donation to Mr. Carper’s opponent.
Scholars specializing in campaign finance say the importance of the Delaware courts in the 1980’s takeover battles provides the most plausible explanation for the tide of out-of-state gifts. “The stakes were very high, and the Governor is obviously very central in the picking of the judges,” said Frank Sorauf, a University of Minnesota professor.
Before getting reappointed, though, an incumbent judge must be recommended by the nine-member judicial nominating commission appointed by the governor.
This little-noticed commission was first set up under an executive order signed in 1977 by Gov. Pete Du Pont to insure that merit, not politics, guided judicial appointments. It consists of five lawyers, including Skadden’s Mr. Ward, and four non-lawyers, and it is headed by James H. Gilliam Jr., the chairman of the Beneficial Corporation and a longtime supporter of Mr. Carper.
In renewing the commission’s mandate in 1993, Governor Carper directed it to submit at least three names for each opening unless there were too few “appropriate” candidates or “more than one office to be filled.” If the committee did not nominate an incumbent who sought reappointment, the governor could demand a supplementary list “of not less than three additional qualified persons.”
The current panel did not renominate Mr. Moore and did not submit any candidates except Judge Berger. Nevertheless, Mr. Carper endorsed the commission’s decision and appointed Judge Berger, who was confirmed by the State Senate after sharp questioning about how she came to be considered.
Although Judge Berger does not have Mr. Moore’s national reputation, she is considered well qualified. But even some of her supporters are concerned about whether the nominating panel’s standards are clear and its procedures are fair.
But Mr. Gilliam, the commission chairman, said the commission did its “difficult and painful” work with complete integrity. “The members were aware of their responsibilities and discharged them as mandated by the applicable executive order and the rules of the commission,” he said. “I stand on that.” He added, “Under no circumstances have I seen any indication that anyone has pursued any course of action to further personal interests.”
For corporate America, the next major test for this nominating procedure may well come when Chancellor William T. Allen’s term expires in two years.
Mr. Flom of Skadden deemed it highly unlikely that Governor Carper, if re-elected next year, would deny Chancellor Allen a new term. “People would be shocked,” Mr. Flom said. “Bill Allen is an extremely competent judge.”
But then, he conceded after a moment, so was former Justice Andrew Moore.
Correction: May 29, 1995
An article in Business Day on Tuesday about criticisms that a single law firm has influenced the Delaware judicial system misstated the corporate position of James H. Gilliam Jr., chairman of the Delaware Governor’s judicial nominating commission. He is executive vice president and general counsel of the Beneficial Corporation, not the company’s chairman.
About the Archive
This is a digitized version of an article from The Times’s print archive, before the start of online publication in 1996. To preserve these articles as they originally appeared, The Times does not alter, edit or update them.