Booth v. Franks
2017 Ark. 193
| Ark. | 2017Background
- Clyde and Frank Booth were minority shareholders (50 shares each) in First Community Bank of Crawford County (FCB); they purchased shares for $100 each.
- First Bank agreed to merge with FCB; First Bank filed a merger application with the Arkansas State Banking Board on November 15, 2013 and published notice in the Arkansas Democrat-Gazette on three dates within the statutory window.
- The Booths did not file a written protest during the 15-day post-application window required by Ark. Code Ann. § 23-46-406(a)(1).
- FCB notified shareholders on December 6, 2013 that the bank valued dissenting shares at $0.01 per share; the shareholders’ meeting on December 19 approved the merger despite the Booths’ votes against it, and the Booths gave statutory notice of dissent under Ark. Code Ann. § 23-48-506.
- The Board held a formal hearing on January 16, 2014, approved the merger, and issued findings the circuit court found inadequate; after remand the Board issued expanded findings in January 2015.
- The Booths challenged the Board’s procedures and the constitutionality of notice and valuation in Sebastian County Circuit Court; the court held the Booths failed to preserve substantive objections by not filing timely protest before the Board and affirmed after the Board supplemented its findings.
Issues
| Issue | Plaintiff's Argument (Booth) | Defendant's Argument (Board) | Held |
|---|---|---|---|
| Whether Board's newspaper notice of the merger hearing violated due process as applied to shareholders | Newspaper notice was constitutionally deficient because targeted mailed notice was feasible and required where parties could be identified | Newspaper notice complied with Mullane; shareholders had other statutory avenues and were not uniquely entitled to targeted notice for the Board's regulatory hearing | Board's newspaper notice was adequate; no special notice required |
| Whether the Booths preserved constitutional and statutory challenges for judicial review | Booths argue their later objections and conditional notices preserved issues and they were denied meaningful opportunity to be heard | Board argues Booths failed to file written protest within the statutory 15-day window and thus failed to preserve issues for administrative record | Booths failed to preserve issues by not filing timely written protest; objections not preserved |
| Whether dissenting shareholders were deprived of adequate appraisal remedies | Booths contend $0.01 per share violated property and due process rights and statutory appraisal process was frustrated | Board shows statutory appraisal procedure under § 23-48-506 was available and mechanical; Booths were aware and attempted conditional actions that are not recognized | Statutory appraisal procedure was the appropriate remedy; Booths did not properly pursue or preserve it |
| Whether Board's original findings were sufficient under administrative review | Booths argued original order lacked adequate findings and conclusions | Board supplemented findings after remand | Circuit court (and this Court) found original findings inadequate but acceptable after Board's expanded findings; appeal affirmed |
Key Cases Cited
- Mullane v. Central Hanover Trust Co., 339 U.S. 306 (1950) (newspaper notice may be insufficient where parties are identifiable and targeted notice is feasible; otherwise adequate)