Wayne L. Ryan Revocable Trust v. Ryan
308 Neb. 851
| Neb. | 2021Background
- Streck, Inc. is a closely held S‑corporation in the diagnostics/hematology market; founder Dr. Wayne Ryan and family controlled the company until his daughter Connie acquired voting control and became CEO in 2013.
- Connie led a management-run sale process called “Project Blizzard” in 2014; the process produced several IOIs/LOIs but was discontinued after Dr. Ryan was excluded and declined to approve any LOI.
- The Wayne L. Ryan Revocable Trust (RRT) sued Connie and Streck alleging shareholder oppression and breach of fiduciary duty; Streck elected to purchase the petitioning shareholder’s shares under Neb. Rev. Stat. § 21‑20,166.
- A 9‑day bench trial addressed fair value (valuation date Oct. 29, 2014), prejudgment interest, and payment terms. Competing experts offered valuations: RRT’s expert (Reilly) supported fair value of the RRT’s 52.275% interest at $467 million; Streck’s expert (Risius) valued it far lower.
- The district court adopted the RRT’s proposed findings (largely verbatim), credited Reilly and Riddle (RRT experts), rejected Risius, fixed fair value at $467 million for the RRT’s shares, awarded prejudgment interest (~$256 million at 12% from Jan 19, 2015 to Aug 12, 2019), denied installment payments, and denied dissolution. The Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument (RRT) | Defendant's Argument (Streck) | Held |
|---|---|---|---|
| Whether the trial court erred by adopting the RRT’s proposed findings verbatim | Adoption permitted when a party’s submission credibly establishes the facts; findings were supported by evidence | Court failed to exercise independent judgment and improperly adopted counsel‑drafted findings | Affirmed: judge may adopt proposed findings if supported by evidence and reflect independent judgment; no prejudice shown |
| Proper fair value of RRT’s shares (valuation methods and weight to LOIs) | Reilly’s DCF, GPTC, and GMA analyses, plus industry testimony and sales‑process critique, reliably show higher value | Risius’ lower valuation and Project Blizzard LOIs better reflect market value; Reilly inflated value and relied on synergies | Affirmed: court credited Reilly and Riddle, found Project Blizzard process unreliable, and held Reilly’s valuation had acceptable factual/principled basis |
| Entitlement to prejudgment interest and applicable procedure/rate | § 21‑20,166(5)(a) authorizes discretionary prejudgment interest (12%) even though amount was unliquidated; RRT did not refuse any realistic offer in bad faith | Prejudgment interest governed by § 45‑103.02 (procedural requirements) and RRT failed to comply; RRT’s actions were not in good faith | Affirmed: § 21‑20,166(5)(a) controls and permits interest unless petitioner refused payment in bad faith; no evidence of bad faith found |
| Whether Streck could pay in installments | RRT argued full payment appropriate given Streck’s prior assurances and SLC analysis | Streck requested installments citing inability to raise funds in 10 days | Affirmed: trial court exercised equitable discretion to require lump sum; court found Streck’s evidence not credible and denied installments |
Key Cases Cited
- Rigel Corp. v. Cutchall, 245 Neb. 118 (1994) (articulates factors for “fair value” in shareholder appraisal/dissolution context)
- Dell v. Magnetar Global Master Fund, 177 A.3d 1 (2017) (discusses weight to give transaction price/LOIs versus DCF in appraisal)
- Uptime Corp. v. Colorado Research Corp., 161 Colo. 87 (1966) (treats adoption of prevailing party’s proposed findings as judge’s responsibility)
- AVG Partners I v. Genesis Health Clubs, 307 Neb. 47 (2020) (reviews standard for prejudgment interest awards)
- Anderson v. A & R Ag Spraying & Trucking, 306 Neb. 484 (2020) (equitable valuation and appellate review standards)