Nathalie Taft Andrews v. Sheepscot Island Company, 138 A.3d 1197

Sheepscot Island Company (SICO), a for‑profit Maine corporation owning MacMahan Island property, proposed converting to a nonprofit in 2014 by reclassifying its single class of shares into two membership types: "cottage" and "associate." Cottage members would have greater voting power; associate memberships would be nontransferable and terminate on death. All holders would retain perpetual liquidation rights proportionate to preconversion shares.
A majority of shareholders approved the conversion plan at the 2014 meeting; the Taft plaintiffs (dissenting shareholders, some non‑cottage owners) voted against and preserved dissenters' rights.
The Tafts sued in the Business and Consumer Docket seeking declaratory and injunctive relief, alleging the plan unlawfully reclassifies shares unequally in violation of 13‑C M.R.S. § 601(1) and the nonprofit conversion statute, 13‑C §§ 931–936.
The trial court dismissed the complaint under M.R. Civ. P. 12(b)(6), concluding the conversion plan complied with § 931(3) and that § 601(1) did not bar disparate membership rights after conversion.
On appeal, the Maine Supreme Judicial Court reviewed statutory interpretation de novo, treated complaint facts as admitted, and affirmed dismissal, holding the conversion plan met statutory requirements and that dissenting shareholders' remedy is appraisal rights.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the conversion plan complied with 13‑C § 931(3)(B)’s requirement to describe the "manner and basis" of reclassifying shares	Tafts: Plan fails to reclassify all shares "equally" and thus does not satisfy § 931(3)(B)	SICO: Plan describes manner and basis of reclassification in detail and complies with § 931(3)(B)	Held for SICO: § 931(3)(B) requires disclosure of manner/basis, not equality; plan satisfied the statute
Whether 13‑C § 601(1) (equal terms for shares of a class) restricts post‑conversion nonprofit membership classes	Tafts: § 601(1) requires identical terms and so forbids reclassification into disparate nonprofit memberships	SICO: § 601 applies to for‑profit share structure; nonprofit corporations don’t issue shares; conversion statute governs reclassification	Held for SICO: § 601(1) does not constrain nonprofit memberships post‑conversion; even if applied, the plan’s members within each class have identical terms
Whether dissenting shareholders have a right to veto the conversion or other remedies besides appraisal	Tafts: Seek invalidation/injunction barring implementation	SICO: Statutory appraisal remedy is the exclusive practical protection for dissenters absent statutory noncompliance or fraud	Held for SICO: Dissenters lack veto; appraisal rights (fair value) are the available remedy; dismissal affirmed

Nadeau v. Frydrych, 108 A.3d 1254 (Me. 2014) (standard for reviewing Rule 12(b)(6) dismissal and treating complaint facts as admitted)
Moody v. State Liquor & Lottery Comm’n, 843 A.2d 43 (Me. 2004) (treating documents referenced in a complaint as part of the pleadings when authenticity not challenged)
MacMahan Island Ass’n v. Andrews, 943 A.2d 592 (Me. 2008) (prior case invalidating SICO’s earlier conversion plan for failing to include reclassification terms required by § 931(3)(B))
In re Valuation of Common Stock of McLoon Oil Co., 565 A.2d 997 (Me. 1989) (historical explanation of appraisal remedy and rationale for majority rule over unanimous consent in corporate changes)