Nonvoting Shareholders Lack Appraisal Rights in Asset Dispositions Absent an Express Charter Grant

I. Introduction

Streck, Inc. v. Ryan arises from the sale of a privately held Nebraska S corporation’s business through a two-step structure: Streck transferred substantially all assets and liabilities to a newly formed entity (“Streck LLC”) and then sold the equity of Streck LLC to a Madison affiliate, followed by distribution of proceeds to Streck shareholders.

Streck’s capital structure mattered. Its amended articles authorized two common-stock classes: Class A (voting) and Class B (nonvoting), stating: “Except for the right to vote, all of the rights and preferences of the Class A voting shares and the Class B non-voting shares shall be identical.” After closing, Class B holders were paid cash proceeds (about $70.10/share), but certain Class B holders (including a charitable foundation) demanded substantially more and attempted to invoke statutory appraisal rights.

The core issue was narrow but consequential for closely held firms: whether Class B nonvoting shareholders can claim appraisal rights for a statutory “disposition of assets” when § 21-2,172(a)(3) ties the right to being “entitled to vote,” and whether Streck’s articles “provided” appraisal rights under § 21-2,172(a)(5) despite not mentioning appraisal explicitly.

II. Summary of the Opinion

The Nebraska Supreme Court affirmed partial summary judgment holding that Class B nonvoting shareholders lacked appraisal rights for this asset disposition. The court treated § 21-2,172(a)(3) as controlling: appraisal rights in an asset disposition exist only if the shareholder is entitled to vote on the disposition. Because Streck’s Class B shares were nonvoting under the articles, Class B shareholders could not invoke statutory appraisal.

The court further held:

• Appellate jurisdiction existed because certification under § 25-1315(1) was not an abuse of discretion.
• Declaratory judgment was proper to resolve the threshold statutory entitlement question (whether Class B holders had appraisal rights), particularly given the 60-day procedural pressure within the appraisal framework.
• “Interested transaction” exceptions did not create Class B appraisal rights under these facts, and charitable-foundation statutes did not independently confer appraisal rights.
• Streck LLC remained in the case and allegedly assumed liabilities, undercutting arguments that dismissal of other parties left no one to satisfy any judgment.

A dissent (Papik, J., joined by Freudenberg, J.) would have found that the “identical rights” charter language—except voting—did “provide” appraisal rights to Class B holders under § 21-2,172(a)(5).

III. Analysis

A. Precedents Cited

1. Appellate jurisdiction and final-order certification

• Johnson v. City of Omaha (319 Neb. 402, 23 N.W.3d 420 (2025)) — cited for the standard that jurisdictional issues without factual disputes present questions of law. It frames the court’s threshold obligation to assure jurisdiction.
• Castellar Partners v. AMP Limited (291 Neb. 163, 864 N.W.2d 391 (2015)) — anchors abuse-of-discretion review for § 25-1315(1) certification and reinforces that improper certification defeats appellate jurisdiction.
• Czech v. Allen (318 Neb. 904, 21 N.W.3d 1 (2025)) — reiterates the appellate court’s duty to determine jurisdiction before addressing merits.
• Cerny v. Todco Barricade Co. (273 Neb. 800, 733 N.W.2d 877 (2007)) — supplies the three-part test for an appeal under § 25-1315(1) (multiple claims/parties; final order as to fewer than all; “no just reason for delay”).

These cases did not shape the appraisal rule directly; they structured the court’s path to reaching it and validated the district court’s use of certification to isolate a dispositive legal question (Class B appraisal entitlement) before undertaking valuation litigation.

2. Summary judgment, interpretation standards, and contract principles

• Noel v. Pathology Med. Servs. (ante p. 92, 26 N.W.3d 196 (2025)) — supplies de novo review for summary judgment and the evidence-viewing rule favoring the nonmovant.
• D&M Roofing & Siding v. Distribution, Inc. (319 Neb. 707, 24 N.W.3d 850 (2025)) — cited for two key propositions: contract interpretation/ambiguity are questions of law, and courts will not rewrite contracts or add terms not chosen by the parties. The majority used this to resist reading an appraisal-rights grant into charter silence.
• Wayne L. Ryan Revocable Trust v. Ryan (308 Neb. 851, 957 N.W.2d 481 (2021)), Anderson v. A & R Ag Spraying & Trucking (306 Neb. 484, 946 N.W.2d 435 (2020)), and Syring v. Archdiocese of Omaha (317 Neb. 195, 9 N.W.3d 445 (2024)) — collectively reinforce plain-meaning statutory interpretation and the admonition against reading into or out of statutes.
• Groseth v. Groseth (257 Neb. 525, 600 N.W.2d 159 (1999)) — supports looking to official comments of a model act for interpretive guidance where Nebraska statutes were patterned on that model.
• Labenz v. Labenz (291 Neb. 455, 866 N.W.2d 88 (2015)) — cited for the principle that contract clauses must be read together, not in isolation (important to the majority’s refusal to elevate the “identical rights” phrase over the “except voting” carve-out and statutory backdrop).
• Bauers v. City of Lincoln (255 Neb. 572, 586 N.W.2d 452 (1998)) — invoked for the idea that existing statutes are incorporated into contracts, supporting the majority’s view that the statutory voting-based limit on asset-disposition appraisal rights was baked into the shareholder bargain.

3. Declaratory judgment availability

• Chase County v. City of Imperial (302 Neb. 395, 923 N.W.2d 428 (2019)) — cited for (a) declaratory judgment not being available when a “serviceable” remedy exists, and (b) the requirements of an actual controversy and justiciable issue. The court distinguished the appraisal statute as incomplete for resolving the threshold entitlement dispute for Class B holders.
• Ameritas Life Ins. v. Balka (257 Neb. 878, 601 N.W.2d 508 (1999)) — provides the affirmative proposition that declaratory judgment is proper to determine rights and obligations under a statute.

4. “Step transaction” and form/substance arguments

• Mid City Bank v. Douglas Cty. Bd. of Equal. (260 Neb. 282, 616 N.W.2d 341 (2000)) — cited to define the step-transaction doctrine as a tax doctrine rooted in substance-over-form for tax liability. The court declined to import that doctrine into corporate appraisal-rights analysis absent statutory authorization.

5. Appraisal-rights history and statutory nature

• Stoneman v. United Neb. Bank (254 Neb. 477, 577 N.W.2d 271 (1998)) and Athlon Sports Communications v. Duggan (549 S.W.3d 107 (Tenn. 2018)) — cited for historical context: the evolution from unanimity requirements to statutory mechanisms (like appraisal rights) protecting minority shareholders. They help justify why appraisal rights are statutory and bounded by legislative conditions.

6. Out-of-state and model-act guidance on charter silence

• Indiana Farm Bureau Co-op. v. AgMax (622 N.E.2d 206 (Ind. App. 1993)) — used by the majority to support a reluctance to “read into” articles of incorporation rights not mentioned (there, merger approval requirements; here, voluntary appraisal rights). The court analogized: comprehensive articles that do not mention the relevant right are not treated as implicitly creating it.
• In re ITT Derivative Litigation (932 N.E.2d 664 (Ind. 2010)) — cited for background that Indiana’s corporate law was modeled after the Revised Model Business Corporation Act, bolstering comparability of the Indiana case’s interpretive approach.

7. Dissent’s interpretive backstops

The dissent referenced Timberlake v. Douglas County (291 Neb. 387, 865 N.W.2d 788 (2015)) (expressio unius), Sievert v. Alli (309 Neb. 246, 959 N.W.2d 777 (2021)) (don’t add meaning not in statute), and Espinoza v. Job Source USA (313 Neb. 559, 984 N.W.2d 918 (2023)) (avoid superfluity), to argue that (i) § 21-2,172(a)(5) does not require “express” language and (ii) Streck’s “identical rights” language sufficed.

B. Legal Reasoning

1. The “gating” function of § 21-2,172(a)(3) for asset dispositions

The majority’s reasoning is fundamentally textual and hierarchical: in a “disposition of assets,” § 21-2,172(a)(3) grants appraisal rights only “if the shareholder is entitled to vote on the disposition.” Because Streck’s Class B shares are nonvoting by charter, the statutory gate never opens for Class B holders.

This framing treats voting entitlement not as a mere procedural detail but as a substantive condition precedent to appraisal rights in the asset-disposition category. That choice matters: it keeps the court from rebalancing shareholder protections via “equity” or “substance-over-form” and instead forces any expansion of rights to come from (a) the Legislature or (b) a clear charter grant.

2. The limited role of “interested transaction” language

The opinion rejects two attempts to use “interested transaction” concepts to create appraisal rights for Class B holders:

• § 21-2,172(b)(4) does not affirmatively grant appraisal rights in private companies. The court reads (b)(4) as an exception-to-an-exception: it makes appraisal rights available despite the market-out exception in (b)(1) (publicly traded shares). Because Streck’s shares were not publicly traded, neither (b)(1) nor (b)(4) mattered.
• The “liquidation and non-interested transaction” carve-out in § 21-2,172(a)(3) is not a grant. The clause limiting appraisal rights when shareholders will receive cash net assets and the disposition is not interested functions as a subtraction from otherwise-existing rights, not as a mechanism to award rights to nonvoters.

3. Voluntary appraisal rights under § 21-2,172(a)(5): “provided” means “expressly granted” (majority)

The hardest interpretive move is the majority’s treatment of § 21-2,172(a)(5), which allows appraisal rights “to the extent provided by the articles of incorporation, bylaws, or a resolution of the board of directors.”

The Class B holders argued the articles “provided” appraisal rights because they promised identical rights to Class A holders except voting. The majority rejected that, concluding that (i) the statutory right in an asset disposition is tied to voting, and (ii) if a corporation intends to break that linkage by voluntarily granting appraisal rights to nonvoters, it must do so expressly.

The majority supported this “express grant” requirement by:

• Incorporating statutes into the shareholder contract (Bauers v. City of Lincoln) and resisting contract “rewriting” (D&M Roofing & Siding v. Distribution, Inc.).
• Consulting model-act comments (Groseth v. Groseth)—particularly the Model Business Corporation Act commentary stating that an “express grant” under the analogous section overrides exceptions—and then defining “express” by reference to Black’s Law Dictionary.
• Reading the “Except for the right to vote” clause broadly (not limited to certain votes) so that importing appraisal for nonvoters would effectively contradict the charter’s nonvoting design and the statute’s voting gate for asset dispositions.

4. Declaratory judgment as a “bridge” to implement the appraisal scheme

A practical procedural holding underlies the merits: once Class B holders served a § 21-2,180 demand, Streck faced the § 21-2,181(a) 60-day clock or risk paying the demanded amount plus interest. But Streck’s threshold position was that Class B holders were not entitled to appraisal at all.

The court treated declaratory judgment as a necessary companion remedy to implement the statutory process where the statute does not itself provide a clean mechanism to adjudicate entitlement before valuation litigation. This avoids forcing corporations into a “pay-or-try-to-value” posture when the real dispute is statutory eligibility.

C. Impact

1. Asset disposition appraisal rights become predictably vote-linked in Nebraska

The decision strengthens a bright line: in Nebraska, nonvoting shareholders in privately held corporations generally cannot obtain appraisal rights from an asset sale unless the corporate documents explicitly confer them. This reduces valuation litigation risk for corporations that use nonvoting equity as an economic instrument while reserving control.

2. Drafting consequences: “equal rights except voting” is not enough

The majority’s approach makes careful drafting decisive. If a company wants nonvoting investors to have appraisal rights in an asset disposition, the charter/bylaws/board resolutions should: (i) mention “appraisal rights,” (ii) tie them to specific transactions (e.g., § 21-2,170 dispositions), and (iii) state that nonvoting classes are included notwithstanding § 21-2,172(a)(3). Conversely, companies that do not want such rights should avoid any language that could be argued to incorporate “all rights” of voting shares.

3. Litigation strategy: declaratory judgment as a threshold tool

The endorsement of declaratory judgment in this setting will likely be used by corporations to litigate eligibility early, potentially narrowing parties and issues before any expensive appraisal/valuation proceeding begins.

4. The dissent signals future pressure points

The dissent frames a plausible alternative: “provided” in § 21-2,172(a)(5) may not require the heightened clarity the majority demands. That interpretive conflict may resurface in future cases involving broader or more explicit “equal rights” clauses, or board resolutions that purport to extend appraisal rights without using the word “appraisal.”

IV. Complex Concepts Simplified

• Appraisal rights: A statutory right for certain shareholders to demand cash payment of “fair value” for their shares when the company undertakes specified major transactions, with a court determining value if the parties cannot agree.
• Disposition of assets (§ 21-2,170): A transaction where the corporation sells substantially all its assets (often effectively selling the business) rather than selling stock.
• Nonvoting vs. voting shares: Voting shares control corporate approvals; nonvoting shares typically receive economic benefits but lack decision-making power. Here, Nebraska’s appraisal statute for asset sales ties appraisal rights to voting entitlement.
• Interested transaction: A deal involving conflicts (e.g., controlling persons benefiting). The court held that “interested transaction” language in the appraisal statute did not, in this case, expand appraisal rights to nonvoters.
• Declaratory judgment: A lawsuit asking the court to declare legal rights (here, whether Class B holders were eligible for appraisal) before proceeding to other remedies (like valuation).
• Certified final judgment (§ 25-1315(1)): A trial court’s ability, in limited circumstances, to certify a partial resolution for immediate appeal so a key legal issue can be decided without waiting for the entire case to finish.

V. Conclusion

Streck, Inc. v. Ryan cements a Nebraska rule of corporate appraisal rights that is both textual and formal: for asset dispositions, appraisal is reserved to shareholders entitled to vote, and nonvoting shareholders cannot reach appraisal through general charter “equal rights” language. If appraisal rights are to be extended to nonvoters under § 21-2,172(a)(5), the court requires an express grant.

The decision also validates declaratory judgment as a practical device to resolve appraisal-eligibility disputes early, thereby preventing the appraisal statute’s deadlines from forcing valuation litigation (or payments) when the real dispute is entitlement. Going forward, Nebraska corporate planners and litigators should treat voting rights, appraisal rights, and charter drafting as an integrated package—especially in closely held, family-controlled enterprises using nonvoting equity.