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Trial is legal surgery, the narrowest specialty, and it requires unique skills. Our clients want our service and hope they never need it again- like surgery.

Corporation's Right to Redeem Controlling Shares Enforced by Nebraska Supreme Court

On August 18, 2006, nearly five years after contentious litigation between family members commenced, the Nebraska Supreme Court issued a final decision on the matter. Throughout the litigation, Domina Law Group pc llo represented Andrew, the son, who found himself thrust into litigation against his father, Bill, over control of a substantial family business (the “Company”).

Despite Shareholder Agreements dating back to the mid-1940’s requiring the Company redeem shares of departing stockholders, Bill claimed his deceased father’s shares should not be redeemed. His contention was motivated by his desire to retain control.

Andrew, the Company’s long-time, highly successful President, built the Company from a largely dormant, low-activity corporation, to a substantial enterprise. Thereafter, his father, Bill, took an antagonistic position over the controlling shares. As a result, litigation ensued.

The Nebraska Supreme Court’s August 18, 2006 unanimous decision in favor of Andrew reversed the Douglas County District Court’s ruling for Bill, the father. The Supreme Court’s Opinion clearly holds actions taken by Bill, including signing and performing the Agreements in question and then trying to void them because he regretted them, was not a ground for relief. The Court rejected Bill’s claims that Andrew, and the Company, were estopped, or had waived, rights under the Agreements. The historic documents of the Company were enforced.

“The Nebraska Supreme Court’s decision resolving this issue of corporate governance and business structure is highly important. It means stability for the Company, security for virtually all its employees, and continuity as the Company continues to manufacture its important pharmaceutical products for America’s livestock industry,” said David Domina who represented Andrew throughout the proceedings.

The Nebraska Supreme Court’s decision is one of few written and published in the State’s jurisprudence concerning the enforcement of shareholder rights to redeem stock following death, or other circumstances involving a shareholder-employee’s departure from a closely held company.

August 21, 2006
David A. Domina

Domina Law Group pc llo is a firm of trial lawyers. We specialize in complex litigation on a national basis. Our lawyers are ethical, aggressive, and committed to providing spirit and vitality to the judicial system and our client’s legal rights.

Categories: Supreme Court

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