Court Opinion

ID: 4167024
Source: CourtListenerOpinion
Date Created: 2017-05-09 14:14:29.233903+00
Date Added: 2024-06-11T14:25:01.410060
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/09/2017 09:14 AM CDT

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                                Nebraska Court of A ppeals A dvance Sheets
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                                         JONES v. McDONALD FARMS
                                            Cite as 24 Neb. App. 649

                                Dianne Jones, individually and on behalf
                                 of McDonald Farms, I nc., a Nebraska
                                  corporation, appellant, v. McDonald
                                  Farms, Inc., a Nebraska corporation,
                                            et al., appellees.
                                                 ___ N.W.2d ___

                                        Filed May 9, 2017.     No. A-15-777.

                1.	 Actions: Equity: Accounting. A derivative action which seeks an
                     accounting and the return of money is an equitable action.
                2.	 Actions: Equity: Corporations. An action seeking corporate dissolu-
                     tion is an equitable action.
                3.	 Equity: Appeal and Error. In an appeal of an equitable action, an
                     appellate court tries factual questions de novo on the record and reaches
                     a conclusion independent of the findings of the trial court, provided that
                     where credible evidence is in conflict on a material issue of fact, the
                     appellate court considers and may give weight to the fact that the trial
                     judge heard and observed the witnesses and accepted one version of the
                     facts rather than another.
                4.	 Corporations: Courts. Although the Business Corporation Act gives
                     the courts the power to relieve minority shareholders from oppressive
                     acts of the majority, the remedy of dissolution and liquidation is so dras-
                     tic that it must be invoked with extreme caution.
                5.	 Corporations. The ends of justice would not be served by too broad
                     an application of the authority to dissolve and liquidate a corporation
                     under the Business Corporation Act, for that would merely eliminate one
                     evil by the substitution of a greater one—oppression of the majority by
                     the minority.
                 6.	 ____. A corporation is not required to pay dividends to its shareholders.
                7.	 Corporations: Stock. Stock transfer restrictions are generally enforce-
                     able under Nebraska law unless they are unreasonable.
                8.	 ____: ____. A stock restriction provision providing for book value
                     as determined by independent certified accountants for a company in
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                       JONES v. McDONALD FARMS
                          Cite as 24 Neb. App. 649

     accordance with generally accepted accounting principles is sufficiently
     certain to be enforced.
 9.	 Appeal and Error. An appellate court is not obligated to engage in an
     analysis that is not necessary to adjudicate the case and controversy
     before it.

  Appeal from the District Court for Hamilton County: R achel
A. Daugherty, Judge. Affirmed.
  Andre R. Barry and Jonathan J. Papik, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellant.
   Daniel M. Placzek, of Leininger, Smith, Johnson, Baack,
Placzek & Allen, for appellees.
   Moore, Chief Judge, and R iedmann and Bishop, Judges.
   R iedmann, Judge.
                      INTRODUCTION
   A minority shareholder of a closely held family farm cor-
poration brought an individual and a derivative action against
the corporation and the majority shareholders claiming breach
of fiduciary duty, misappropriation of corporate assets, and
corporate oppression. Essentially, the minority shareholder
took issue with the corporation’s failure to pay dividends,
its refusal to purchase her shares at a price she thought was
fair, and its payment of commodity wages to the majority
shareholders. Following a bench trial, the district court for
Hamilton County entered judgment in favor of the corporation
and majority shareholders. Finding that the minority share-
holder failed to prove oppressive conduct, misapplication or
waste of corporate assets, or illegal conduct by the majority
shareholders, we affirm.
                      BACKGROUND
  McDonald Farms, Inc., was incorporated in 1976 by
Charles McDonald and Betty McDonald. Charles and Betty
were the parents of four children: Donald McDonald, Randall
McDonald, Dianne Jones, and Rosemary Johns (Rosemary).
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                   JONES v. McDONALD FARMS
                      Cite as 24 Neb. App. 649

Donald and Randall began farming with Charles in the mid-
1970’s. Charles resigned as president of the corporation in
1989, at which time Randall became president and Donald
became vice president. At the time McDonald Farms was
incorporated, Charles and Betty held majority interests in the
corporation and Donald and Randall each held a minority
interest. Upon Betty’s death in 2010, her shares were devised
equally to her four children. In June 2012, Charles gifted his
stock equally to Donald and Randall. As a result, Donald and
Randall each currently own 42.875 percent of the shares and
Jones and Rosemary each own 7.125 percent of the shares.
Charles passed away in March 2014.
   McDonald Farms’ assets include approximately 1,100 acres
of irrigated farmland and dry cropland. Since 1991, McDonald
Farms has leased its land to two corporations: D & LA Farms,
Inc., a corporation owned by Donald and his wife, and R & T
Farms, Inc., a corporation owned by Randall and his wife. The
land is leased on a 50-50 crop share basis, and Donald and
Randall perform the farming duties such as planting, harvest-
ing, and selling the crops.
   McDonald Farms was initially incorporated as a subchapter
S corporation under the Internal Revenue Code, but in 1993,
Charles decided to convert it to a subchapter C designation. A
subchapter C corporation pays its own taxes and is treated as
an entity separate from its stockholders. Phillip Maltzahn, who
has worked as McDonald Farms’ certified public accountant
since 1990, testified that he recommends that farmers put their
farming operation under a C corporation but leave the land out
of the corporation.
   According to Maltzahn, as a C corporation employee, a
farmer should receive wages for his work in planting, harvest-
ing, and selling crops. There are two ways for an employee
to receive wages from the corporation: cash, which would be
subject to Social Security and Medicare taxes, or commodity
wages. Commodity wages are paid by transferring grain or
another such commodity from the corporation to the employee,
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and at the time of the transfer, a wage is created. It is the
corporation’s choice whether to pay wages in cash or com-
modities, but if it chooses commodities, the corporation avoids
paying Social Security and Medicare taxes. Maltzahn’s recom-
mendation is that the farming corporation pay its employees
via commodity wages. He said that it is not unusual for farm-
ers to be paid in commodity wages in central Nebraska and
that in fact, “[a]ll of [his] farm clients do that.”
   Maltzahn explained that when Charles converted McDonald
Farms to a C corporation, Charles’ desire was to pay as little
in taxes as possible in order to build the size of the corpora-
tion. Because the corporate tax rate on the first $50,000 of net
income is 15 percent, Maltzahn’s goal, and Charles’ goal, was
to keep the corporation’s annual taxable income at $50,000.
According to Maltzahn, all shareholders benefit from a C cor-
poration designation because the book value for the corporation
increases each year by $50,000, minus the 15-­percent federal
tax liability. Maltzahn testified that he works for at least 100
other C corporations and that they all share the same goal of
keeping net income around $50,000 annually in order to take
advantage of the 15-percent tax rate. He said that planning to
reduce taxable income takes a lot of tax planning, including
timing business functions such as paying crop inputs, replac-
ing assets, and paying commodity wages.
   According to Maltzahn, Charles could have received com-
pensation every year he ran the corporation, but he did not
because he wanted to keep the cash in the corporation and
grow it as large as possible. Donald and Randall also could
have taken annual compensation for working for McDonald
Farms since the 1970’s, but they did not. However, McDonald
Farms paid Charles commodity wages worth $10,019 in 2004
and $8,355 in 2005. Then in 2010, 2012, and 2013, grain
prices were high, and McDonald Farms needed to reduce
its income, so it again decided to pay commodity wages. In
2010, prior to Betty’s death, Charles received 13,100 bushels
of corn at a value of $50,173. Although Donald and Randall
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were minority shareholders at the time, they received no
profits. In June 2012, Donald and Randall became major-
ity shareholders and they, along with Charles, each received
10,000 bushels of corn worth $77,100 for that year. In 2013,
Charles received 21,667 bushels of corn valued at $157,200,
and Donald and Randall each received 16,667 bushels of corn
worth $120,000.
   When considering the number of years Charles, Donald,
and Randall worked for the corporation, Maltzahn did not
believe the commodity wages they have been paid were dis-
proportional. He said the commodity wages paid to Charles,
Donald, and Randall in 2010, 2012, and 2013 were reason-
able because the amount of unpaid wages accrued since 1976
was much larger than the actual amounts paid. Maltzahn said
that McDonald Farms was not legally obligated to pay wages
to Charles, Donald, and Randall, but it was optional for the
corporation to do so. He recommended the corporation do so,
however, as part of its tax planning strategy. Jones’ expert,
Christopher Scow, had no opinion as to whether the commodity
wages paid were appropriate.
   Maltzahn also explained that paying compensation via com-
modity wages in the years after the compensation is earned
does not fit the definition of deferred compensation as that
term is used in the Internal Revenue Code. Under the code,
deferred compensation means compensation earned in 1 year
is spread out and paid over multiple years so it falls under a
lower tax bracket and the employee pays less taxes. To the con-
trary, McDonald Farms took income earned over multiple years
and paid it in a lump sum in 1 year, a strategy which works as
a tax detriment to the employees because their tax bracket is
higher in the years the income is actually paid.
   Under McDonald Farms’ articles of incorporation, before
selling, giving, or transferring any shares of stock, a share-
holder must first offer the shares to the board of directors for
purchase by the corporation “at the book value of said stock
as determined by the books of the corporation by regular and
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usual accounting methods.” In January and August 2012, Jones
offered to sell her shares to the corporation for $240,650. She
claimed the price offered was the fair market value of the
shares based on a December 2010 valuation report prepared
by a certified public accountant for purposes of Betty’s estate.
Donald and Randall declined Jones’ offer, but offered to pur-
chase her shares for $47,503.90, a sum which represented the
shares’ book value as of December 2011 minus $6,000 which
they claimed was lost by the corporation due to Jones’ failure
to return a form to the Farm Service Agency. At one point,
Donald and Randall offered Jones more than book value for
her shares, but no agreement was ever reached.
   Jones commenced this action on April 1, 2013. She sought
an accounting, damages for breach of fiduciary duty and con-
flicting interest transactions, and judicial dissolution of the
corporation based on oppressive conduct, misapplication and
waste of corporate assets, and illegal corporate conduct. Trial
was held in January and February 2015, and the district court
subsequently issued an order denying Jones’ requests for relief.
Relevant to this appeal, the district court found that the cor-
poration’s subchapter C designation and tax strategy, the pay-
ment of commodity wages, and the corporation’s purchase of
expensive equipment were not unreasonable or inappropriate.
In addition, the court determined that the failure to purchase
Jones’ shares at her requested price did not establish oppres-
sive conduct. Jones now appeals to this court.

                ASSIGNMENTS OF ERROR
   Jones claims the court erred in failing to dissolve the cor-
poration under Neb. Rev. Stat. § 21-20,162 (Reissue 2012)
because Donald and Randall (1) denied her any economic
benefit from her shares while attempting to force her to sell
her shares below their fair value, (2) misapplied and wasted
corporate assets by making improper payments to themselves
and Charles, and (3) acted illegally by taking improper deduc-
tions for payments to themselves and Charles. She also alleges
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the court erred by not requiring Donald and Randall to return
to the corporation improper payments directed to themselves
and Charles to reduce the corporation’s net income and in fail-
ing to recognize its power to require Donald and Randall to
pay her fair value for her corporate shares.
                   STANDARD OF REVIEW
   [1,2] A derivative action which seeks an accounting and the
return of money is an equitable action. Woodward v. Andersen,
261 Neb. 980, 627 N.W.2d 742 (2001). An action seeking cor-
porate dissolution is also an equitable action. Id.
   [3] In an appeal of an equitable action, an appellate court
tries factual questions de novo on the record and reaches a
conclusion independent of the findings of the trial court, pro-
vided that where credible evidence is in conflict on a mate-
rial issue of fact, the appellate court considers and may give
weight to the fact that the trial judge heard and observed the
witnesses and accepted one version of the facts rather than
another. Id.
                            ANALYSIS
   Although Jones’ complaint asserted four causes of action, on
appeal, she only challenges certain decisions made by the dis-
trict court. She asserts that the court erred in failing to provide
a remedy pursuant to § 21-20,162 for corporate oppression,
misapplication and waste of corporate assets, and/or illegal
conduct. She asks that we remand this cause to the district
court with directions ordering Donald and Randall to purchase
her shares for fair value. We decline to do so, because we agree
with the district court that Jones was not entitled to a remedy
under § 21-20,162.
   [4,5] At the time this action was commenced, the Business
Corporation Act provided in relevant part:
      [T]he court may dissolve a corporation:
         ....
         (2)(a) In a proceeding by a shareholder if it is estab-
      lished that:
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         ....
         (ii) The directors or those in control of the corporation
      have acted, are acting, or will act in a manner that is ille-
      gal, oppressive, or fraudulent; [or]
         ....
         (iv) The corporate assets are being misapplied or
      wasted.
§ 21-20,162. Although the Business Corporation Act gives the
courts the power to relieve minority shareholders from oppres-
sive acts of the majority, the remedy of dissolution and liqui-
dation is so drastic that it must be invoked with extreme cau-
tion. See Woodward v. Andersen, supra. The Supreme Court
has stated that the ends of justice would not be served by too
broad an application of the statute, for that would merely elim-
inate one evil by the substitution of a greater one—oppression
of the majority by the minority. Id.
   Through this action and her arguments on appeal, Jones is
essentially challenging McDonald Farms’ tax strategy. Rather
than attempting to reduce net taxable income to $50,000 per
year in various ways such as paying commodity wages and
timing the purchase of new assets, Jones argues the cor-
poration should maximize its income and pay dividends to
its shareholders. She claims its failure to do so constitutes
oppressive conduct, misapplication or waste of corporate
assets, and/or illegal conduct. The evidence presented at
trial established that there is nothing inherently inappropri-
ate about McDonald Farms’ tax strategy or decision not to
pay dividends.
   [6] A corporation is not required to pay dividends to its
shareholders. See Neb. Rev. Stat. § 21-2050(1) (Reissue
2012) (board of directors may authorize and corporation
may make distributions to its shareholders subject to certain
restrictions). The articles of incorporation specifically make
payment of dividends discretionary. Jones argues, however,
that the failure to pay dividends constitutes oppressive behav-
ior. She claims that the corporation has over $13 million in
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assets and no debt; therefore, it had the resources to pay
a dividend.
   The evidence reveals, however, that McDonald Farms has
never paid dividends. Instead, management has chosen to
operate the business in a manner that best reduces its taxa-
tion. Its accountant, Maltzahn, recommends farming corpora-
tions operate under a subchapter C designation with the goal
of keeping taxable income around $50,000 in order to reduce
its tax burden. Charles made the initial decision to select a
subchapter C designation, and his desire was always to pay
as little in taxes as possible in order to build the size of the
corporation. Donald and Randall have continued to run the
business as Charles had run it. Because Charles never paid
dividends to shareholders, Donald and Randall never elected
to do so either.
   In order to reduce its taxable income each year, McDonald
Farms strategically times the purchase of new equipment, the
sale of crops, and the payment of commodity wages. Randall
testified that although the corporation would strategically time
major purchases, it never purchased assets for the sole pur-
pose of reducing taxable income. In the several years leading
up to this action, McDonald Farms replaced irrigation pivots,
installed a new irrigation system, and replaced a “[grain] dryer
and a leg.” The expenditures were large, but as the district
court determined, the evidence demonstrates that the purchases
were thought out and necessary. The irrigation pivots replaced
equipment that was more than 30 years old. The irrigation
system was purchased after a drought year in which water
restrictions were discussed for the area, and McDonald Farms
applied for and received grants toward its purchase. The evi-
dence established that the new system would provide long-term
benefits and cost savings to the corporation.
   When commodity prices were high and net income would
have exceeded the $50,000 limit, Charles paid himself com-
modity wages upon the recommendation of Maltzahn. This first
occurred in 2004 and 2005, before Jones was a shareholder.
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Donald and Randall were both minority shareholders at the
time, and no profits were distributed to them. Again, in 2010,
Charles paid himself commodity wages. At the time, Donald
and Randall were still minority shareholders and Jones had
not yet received her shares. Neither of the minority sharehold-
ers received profits in 2010. In mid-December 2010, Jones
and Rosemary became minority shareholders, and in 2012,
Donald and Randall became majority shareholders. In 2012
and 2013, commodity wages were paid to Charles, Donald,
and Randall.
   As Maltzahn explained, payment of commodity wages is
common for farming corporations, and although the amount
paid in wages was determined by the corporation’s desire to
reduce its income to $50,000, Maltzahn was not concerned
that the wages paid were unreasonable or excessive when
considering the number of years Charles, Donald, and Randall
had worked without pay. The payments equate to $302,747 to
Charles and $197,100 each to Donald and Randall for their
35-plus years of work. Jones’ own expert, Scow, could not
opine whether the wages paid were appropriate, and he also
conceded that an annual farm management fee of 7 percent
to 10 percent of gross income would be reasonable. Maltzahn
testified that using either the 71⁄2-percent rate or the 10-­percent
rate, Donald and Randall still have not been fully compen-
sated. Although the dissent states that “[t]he commodity wages
paid to Randall, Donald, and Charles for alleged unpaid (and
undocumented) past services are an unfair and unjustified
business decision that was disguised as an acceptable tax
reduction policy,” no such opinion was offered at trial by any
expert to contradict Maltzahn’s testimony.
   The only commodity payments made while Jones was a
shareholder were the payments made in 2012 and 2013. The
question before us is whether payment of those wages con-
stitutes oppressive acts by the majority shareholders. Given
Maltzahn’s uncontroverted testimony that the payments were
reasonable; the number of years Charles, Donald, and Randall
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worked without compensation; and Scow’s admission that an
annual management fee of 7 to 10 percent of gross income
would be reasonable, we find nothing illegal, fraudulent, or
oppressive in either the decision to pay commodity wages or in
the amount of the wages paid.
   The dissent argues that the payment of commodity wages
denies the minority shareholders their reasonable expecta-
tions of sharing in the profits. It relies upon Baur v. Baur
Farms, Inc., 832 N.W.2d 663 (Iowa 2013), in which the
Iowa Supreme Court adopted the reasonable expectations of a
minority shareholder standard to assess minority shareholder
claims of oppression. It is questionable whether the reason-
able expectation standard applies to minority shareholders
who have acquired their interest by gift or devise, because
the test involves assessing the reasonable expectations held
by minority shareholders “‘in committing their capital to
the particular enterprise.’” See, e.g., Edenbaum v. Schwarcz-
Osztreicherne, 165 Md. App. 233, 256, 885 A.2d 365, 379
(2005); Ford v. Ford, 878 A.2d 894 (Pa. Super. 2005); Mueller
v. Cedar Shore Resort, Inc., 643 N.W.2d 56 (S.D. 2002).
See, also, Gimpel v. Bolstein, 125 Misc. 2d 45, 477 N.Y.S.2d
1014 (1984) (explaining reasonable expectations test was not
entirely appropriate where corporation had been in existence
for many years and complaining shareholder had received
share by gift or devise).
   To the extent the reasonable expectations test may apply,
“‘oppression should be deemed to arise only when the major-
ity conduct substantially defeats expectations that, objec-
tively viewed, were both reasonable under the circumstances
and were central to the [minority shareholder’s] decision to
join the venture.’” Matter of Wiedy’s Furniture Clearance
Center Co., 108 A.D. 81, 84, 487 N.Y.S.2d 901, 903 (1985).
Accordingly, even Fox v. 7L Bar Ranch Co., 198 Mont. 201,
209-10, 645 P.2d 929, 933 (1982), relied upon by the dis-
sent, states that when defining oppression using the reason-
able expectation standard, it must be done “‘in light of the
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particular circumstances of each case’” and that “‘courts will
proceed on a case-by-case basis.’” The court in Fox continued,
stating that “[b]ecause of the special circumstances underlying
closely held corporations, court[s] must determine the expec-
tations of the shareholders concerning their respective roles
in corporate affairs. These expectations must be gleaned from
the evidence presented. . . . That is the province of the District
Court . . . .” Id. at 210, 645 P.2d at 933.
   The Montana Supreme Court addressed the reasonable
expectations of a minority shareholder who claimed it was
oppressive for the closely held corporation to deny dividends.
Rejecting the argument, the court stated:
      [Plaintiff] complains that the Corporation pays no divi-
      dends, but he is well aware from his long involvement
      with the Corporation that it has historically not paid
      dividends. While failing to issue dividends to sharehold-
      ers could be an oppressive tactic, the mere non-­issuance
      of dividends is not oppressive in all circumstances. Here,
      the District Court concluded that neither [minority share-
      holder] had any capital investment—having received
      their shares as gifts—which would lead to an expectation
      of profits . . . .
Whitehorn v. Whitehorn Farms, Inc., 346 Mont. 394, 401, 195
P.3d 836, 842 (2008).
   Likewise, in the present case, Jones did not have any capi-
tal investment—her shares were devised to her by her mother,
Betty. She received her shares in December 2010 and sought
to have the corporation buy her shares out in January 2012.
During this 13-month duration, no commodity wages were
paid, which makes suspect the dissent’s claim that her rea-
sonable expectations were violated as a result of payment of
commodity wages. And based upon the history of the corpora-
tion, the minority shareholders had no reasonable expectation
that profits would be paid out to them. Never, in the history of
this corporation that was established in 1976, has a minority
shareholder ever been paid profits.
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   That is not to say that the majority shareholders can retain
all profits to themselves if doing so constitutes oppression;
indeed, after determining that the evidence did not establish
that the majority shareholders deprived Jones of any return
on her share, the district court cautioned that “[i]t is quite
possible that continuation of payment of commodity wages
without the payment of dividends to shareholders would result
in that finding, but based upon the evidence as was presented,
the evidence at this time does not support a finding of oppres-
sion.” This conclusion implies that the district court found
Maltzahn’s uncontroverted testimony credible that the amounts
paid thus far as commodity wages were not disproportion-
ate to back wages and, therefore, did not constitute oppres-
sive behavior.
   The dissent contends that payment of back wages in the
form of commodity payments is “incredulous” in part because
Donald and Randall were already “handsomely rewarded
when they ultimately received 86 percent of a corporation
with approximately 1,100 acres of farmland and other assets
appraised at over $9 million in 2012.” It claims the exclusion
of profits to the minority shareholders “fails to consider the
decision made by their parents to give each of the sisters a
7.125-percent share of the corporation. Presumably that deci-
sion was intended to confer some benefit on the sisters.”
   As correctly noted by the dissent, the value of the corpora-
tion was appraised at over $9 million when Jones was devised
her 7.125-percent share in the corporation. The dissent attempts
to shame Donald and Randall for the shares their parents obvi-
ously believed they deserved, stating:
      Receiving almost $4 million in farmland and other assets
      might be considered a fairly substantial “payment” for
      the brothers’ efforts. The brothers have been generously
      rewarded for their loyalty to the family’s farm operation,
      as signified by Charles’ transferring his remaining stock
      to only Randall and Donald in June 2012.
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But it disregards the fact that despite Jones’ total lack of
involvement in the family farm, her 7.125 percent equated to
$641,250 in 2012 and continues to grow each year. It is not
within the province of this court to judge the estate planning
decisions of Charles and Betty. And it is important to remem-
ber that Charles, one of the incorporators of McDonald Farms,
not only acquiesced, but also initiated and partook in the deci-
sion to pay commodity wages to the majority shareholders as
a tax planning strategy beginning in 2004 when he first paid
wages to himself. Jones has the ability to realize the benefit her
mother, Betty, intended to bestow on her via the buyout provi-
sion in the articles of incorporation, but Jones is dissatisfied
with the buyout formula.
   Jones asserts that the payment of commodity wages was
illegal deferred compensation, but as Maltzahn explained, the
wages paid to McDonald Farms’ employees were actually
the opposite of the Internal Revenue Code’s definition of
deferred compensation.
   Jones also claims that the corporation’s refusal to pay fair
value for her shares constitutes corporate oppression. The
price Jones believes is fair for her shares is based on a valua-
tion of McDonald Farms that had been performed for Betty’s
estate. However, McDonald’s Farms’ articles of incorporation
require that shares be offered for sale to the corporation “at
the book value of said stock as determined by the books of
the corporation by regular and usual accounting methods.”
Jones relies on Baur v. Baur Farms, Inc., 832 N.W.2d 663
(Iowa 2013), to argue that we should disregard the provision
contained in the articles of incorporation because it does not
provide fair compensation for minority shareholders. We agree
with Jones that in Baur, the Iowa Supreme Court found that
the specific provision in the bylaws of a closely held farming
corporation regarding stock transfers was problematic because
it potentially prevented the minority shareholder from receiv-
ing fair value for his shares. However, we note the limitations
of Baur, in that the court expressed no view on whether the
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price offered was outside the range of fair value and incom-
patible with the minority shareholder’s reasonable expecta-
tions given a history of not having received dividends for
several decades.
   In Baur v. Baur Farms, Inc., supra, the original corporate
bylaws included restrictions on transfers of the company’s stock
and established a stock redemption price of $100 per share. The
bylaws were amended in 1984 to include a buyout provision.
Under this provision, a shareholder wishing to sell his shares
was required to first offer to sell them to the corporation or the
other shareholders. If a different price was not agreed upon,
the purchase price of the stock was set at the “‘book value per
share of the shareholders’ equity interest in the corporation as
determined by the Board of Directors, for internal use only, as
of the close of the most recent fiscal year.’” Id. at 665. The
1984 amendment established a book value of $686 per share.
   The minority shareholder attempted to sell his stock to
the corporation for more than 20 years, but the parties were
never able to come to a mutually agreed upon price in order to
abide by the provision in the bylaws. Thereafter, the minority
shareholder filed suit, requesting, among other forms of relief,
payment of the fair value of his ownership interest. On appeal,
the Iowa Supreme Court concluded that the record was not
adequate to determine whether the price offered by the cor-
poration for the purchase of the minority shareholder’s shares
was “so inadequate under the circumstances as to rise—when
combined with the absence of a return on investment—to the
level of actionable oppression.” Id. at 677.
   With respect to the stock transfer restriction contained in
the bylaws, the Iowa Supreme Court noted that the parties had
not been able to come to a mutually agreed-upon price, and
the book value option was also problematic from the minority
shareholder’s perspective. Notably, the price per share ratified
in 1984 was never formally revisited or revised, and accord-
ing to the Iowa Supreme Court, the language of the book
value buyout provision failed to address several important
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questions: (1) whether book value must be set by express reso-
lution of the board or may be determined from an inspection
of the books of the corporation without formal action by the
directors or shareholders; (2) whether annual determination
of the book value for purposes of the bylaw provision was
intended; and (3) whether the board, when setting the book
value under the provision, must use asset values that are rea-
sonably related to actual or fair market values and be based
on generally accepted accounting principles. Essentially, the
parties in Baur v. Baur Farms, Inc., 832 N.W.2d 663 (Iowa
2013), could not agree on how to calculate the book value of
the stock under the corporation’s bylaws.
   The issue in the present case is different. Contrary to Baur,
the issue in the instant case is not how to calculate the book
value of Jones’ shares, but, rather, whether limiting redemp-
tion to book value is so disproportionate to fair value as to
constitute corporate oppression. The provision in McDonald
Farms’ articles of incorporation provides that the shares must
be offered to the corporation for purchase at the book value
of the stock as determined by the books of the corporation by
regular and usual accounting methods. So the three questions
raised by the provision in Baur v. Baur Farms, Inc., supra,
are not present here, and Jones does not challenge the method
by which book value is calculated. She does not contend that
Donald and Randall’s offer to buy her shares at $47,503.90
does not actually constitute book value. Instead, she claims
that the book value of her shares is not fair, because the land
owned by McDonald Farms was appraised at over $13 million.
However, Maltzahn testified that book value includes capital
stock, paid-in capital, and retained earnings. The real estate is
included in the amount of paid-in capital only to the extent of
its cost basis. To include the appreciation of the land in Jones’
buyout number would require us to disregard the plain lan-
guage of the transfer restriction.
   [7,8] Stock transfer restrictions are generally enforceable
under Nebraska law unless they are unreasonable. See, Neb.
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Rev. Stat. § 21-2046 (Reissue 2012); Pennfield Oil Co. v.
Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006); Elson v.
Schmidt, 140 Neb. 646, 1 N.W.2d 314 (1941). The Nebraska
Supreme Court has determined that a stock restriction provi-
sion providing for book value as determined by independent
certified accountants for a company in accordance with gener-
ally accepted accounting principles was sufficiently certain to
be enforced. See F.H.T., Inc. v. Feuerhelm, 211 Neb. 860, 320
N.W.2d 772 (1982).
   In Elson v. Schmidt, supra, after determining that a stock
restriction requiring the stockholders to first offer the stock
to the remaining stockholders at par value was not an unrea-
sonable restraint upon the transfer of property, the Nebraska
Supreme Court enforced the restriction as written. In doing so,
it stated: “There is no merit in the contention of the appellant
as to fraud, and his further contention that the amount received
for the stock is unconscionable, as compared with the offer
made by him is not an issue, when [the restriction] is held to
be a valid contract.” Id. at 653, 1 N.W.2d at 317.
   In the present action, the stock transfer restriction is a valid
contract; in accepting the stock, the shareholders agreed to the
provisions contained in the articles of incorporation as to the
value of redemption. Jones argues that the articles of incor-
poration should not govern the purchase of shares because
Donald and Randall did not comply with them when Charles
transferred his shares to them instead of first offering them
to the corporation for purchase. We note, however, that Jones
received her shares as a result of a testamentary devise upon
Betty’s death, an event that likewise would have required that
they first be offered to the corporation for purchase.
   Having found that the transfer restriction is enforceable as
written, we conclude that Donald and Randall did not engage
in oppressive conduct in rejecting Jones’ offers.
   [9] Based on the foregoing, we find that the district court
did not err in finding insufficient evidence to establish oppres-
sive conduct, misapplication or waste of corporate assets, or
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illegal conduct. Jones also assigns that the district court erred
in failing to require Donald and Randall to return to McDonald
Farms the commodity wages paid to themselves and Charles
and in failing to recognize its power to require Donald and
Randall to pay fair value for her shares. However, we need
not address those arguments, because we have determined
that the payment of commodity wages was not inappropriate
and that Donald and Randall were not obligated to purchase
Jones’ shares at her requested price. An appellate court is not
obligated to engage in an analysis that is not necessary to adju-
dicate the case and controversy before it. Doty v. West Gate
Bank, 292 Neb. 787, 874 N.W.2d 839 (2016). Accordingly, we
affirm the district court’s decision.
                         CONCLUSION
   We conclude that the district court did not err in finding
that Jones failed to establish a basis for judicial dissolution of
McDonald Farms based on oppressive conduct, misapplica-
tion or waste of corporate assets, or illegal conduct. We there-
fore affirm.
                                                       A ffirmed.
   Bishop, Judge, dissenting.
   Shareholders may reasonably expect to share in a corpora-
tion’s profits. However, in this case, the majority shareholders
intentionally excluded the minority shareholders from receiv-
ing any portion of $628,500 in corporate profits (from 2012
and 2013) under the guise of “[c]ommodity [w]ages” they
claimed were owed to them for their unpaid past services to
McDonald Farms. This claim is incredulous for several rea-
sons. First, there was no agreement between McDonald Farms
and the majority shareholders to pay any wages for any work
performed as an officer, director, or employee. Second, to the
extent the brothers were entitled to some added benefit over
their sisters because of their personal involvement with the
corporation, they were handsomely rewarded when they ulti-
mately received 86 percent of a corporation with approximately
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1,100 acres of farmland and other assets appraised at over
$9 million in 2012. Receiving almost $4 million in assets each
might be considered a fairly substantial catch-up “payment”
for the brothers’ efforts. Finally, the notion that the commodity
wages had to be paid as part of a tax strategy is not persuasive
in light of reasons one and two. Although the district court
concluded that the “evidence at this time does not support a
finding of oppression,” the court also stated, “It is quite pos-
sible that continuation of payment of commodity wages with-
out the payment of dividends to shareholders would result in
that finding . . . .” I dissent because the evidence does support
finding the payment of commodity wages constituted oppres-
sive conduct, and I would reverse, and remand for the district
court to consider ordering equitable alternatives to dissolution
of the corporation, as discussed later.

                  EVIDENCE RELEVANT TO
                     COMMODITY WAGES
No Agreement or Other Documentation
to Support Compensation
for Past Services.
   There was no evidence of any agreement between McDonald
Farms and any shareholder for the payment of wages as an offi-
cer, director, or employee. Randall and Donald both testified
they had no expectation of receiving wages from McDonald
Farms, and neither could account by recollection, nor by any
documentation whatsoever, as to the amount of time spent on
McDonald Farms’ business as opposed to the time each worked
for his own farming corporation. Each brother represented he
was spending 100 percent of his time working for his own
farming corporation (R & T Farms, Inc., and D & LA Farms,
Inc.), as reflected in the tax returns, the brothers’ joint venture
agreement, and/or each brother’s employment agreement with
his own corporation. In fact, Donald acknowledged that devot-
ing 100 percent of his time to D & LA Farms included the time
that he spent on McDonald Farms, “because it was all part of
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the same thing.” Indeed, the actual farming of the land owned
by McDonald Farms was done by Randall and Donald through
their respective corporations. Instead of paying rent for the
land, they simply shared the harvested crop on a 50-50 basis
with McDonald Farms. McDonald Farms, in turn, provided
irrigation equipment and grain bins, and it shared equally the
costs for seed, fertilizer, and other expenses associated with the
crop. Randall acknowledged that the “tenant” made decisions
about when to plant and what seed to purchase.
   Further, although Randall testified that he did not know
whether Charles held any positions as an officer of McDonald
Farms after his resignation as president in 1989, the schedule E
in the 2009 and 2010 corporate tax returns provides for com-
pensation of officers, and the schedule shows Charles, Betty,
Randall, and Donald all listed as officers. The schedule E
further shows that during both those years, Charles devoted
100 percent of his time to McDonald Farms, Betty devoted
only 10 percent of her time, Randall devoted only 10 percent
of his time, and Donald devoted only 10 percent of his time.
Accordingly, the evidence shows that Charles was still primar-
ily running the corporation at least until 2010 and that not a
significant amount of Randall’s or Donald’s time was spent
running McDonald Farms. Additionally, when Randall was
questioned about what his responsibilities were with regard to
managing McDonald Farms, he had difficulty describing his
duties. The following colloquy took place:
          [Counsel for Jones]: What were you doing on behalf of
      McDonald Farms when you became president?
          [Randall]: Um, paying bills, whatever needed to be
      done, I did.
          [Counsel for Jones]: What else needed to be done
      besides pay bills for McDonald Farms?
          [Randall]: Whatever it took to operate the corporation.
          [Counsel for Jones]: What, other than paying bills, did
      it take to operate the corporation?
          [Randall]: Whatever it takes.
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         [Counsel for Jones]: Okay. Do you have anything spe-
      cific in mind under “whatever it takes” other than pay-
      ing bills?
         [Randall]: To operate the corporation?
         [Counsel for Jones]: Right.
         [Randall]: No, I guess not.
         [Counsel for Jones]: There’s nothing that needs to be
      done to operate McDonald Farms other than pay bills?
         [Randall]: Well, operate — do what — to operate
      McDonald Farms?
         [Counsel for Jones]: Right.
         [Randall]: Pay taxes. Um, yeah, I don’t know what else
      to say, I guess.
         [Counsel for Jones]: So in order to operate McDonald
      Farms, you need to pay taxes, correct?
         [Randall]: Well, have to pay taxes, yes.
         [Counsel for Jones]: And pay other bills?
         [Randall]: Correct.
         [Counsel for Jones]: And there’s nothing else that
      needs to be done to operate McDonald Farms?
         [Randall]: I’m sure there is.
         [Counsel for Jones]: You’re the president, right?
         [Randall]: Right.
         [Counsel for Jones]: Tell me what it is.
         [Randall]: Whatever needs to be done.
   Randall also testified that his mother, Betty, continued to
keep the corporate checkbook even after Randall became
president. Randall took custody of the corporate checkbook
“[p]robably after [his father, Charles,] g[a]ve up his shares
in 2012.” Upon questioning from his own attorney, Randall
indicated that as employees and officers of McDonald Farms,
he and Donald serviced irrigation pivots, grain bins, and
equipment. Randall said that he and Donald also spread
fertilizer, purchased liability and crop insurance, and made
sure McDonald Farms was participating in government pro-
grams. When asked how he knew when he was working for
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McDonald Farms and when he was working for his own
farming business, Randall said, “If I’m working on McDonald
Farms’ grain bins, their pivots, if I’m maintaining wells,
engines, anything McDonald Farms owns, I’m working for
McDonald Farms.” When asked if he expected McDonald
Farms to compensate him, Randall responded, “I guess I
never thought about it a whole lot, so probably not.” When
asked how much more he thought he was owed in back
wages, Randall said, “I have no idea.” And when asked if he
had even started to calculate that, Randall replied, “No,” and
he had “[n]o idea” whether he was done paying back wages
to Donald and himself.
    The accountant for McDonald Farms, Phillip Maltzahn,
opined that the commodity wages paid to Charles, Randall,
and Donald were reasonable “[b]ecause the amount of unpaid
wage from 1976 through 2010, ’11, ’12, ’13, would have been
much, much larger than the actual amounts paid.” Maltzahn
acknowledged that he referred to the commodity wages as
deferred compensation when his depositions were taken in
2014. He explained that his use of the deferred compensa-
tion terminology was to explain it was not a legal obligation
for McDonald Farms to pay Randall and Donald, but that
“[m]orally it was owed to them . . . .” Apparently, Maltzahn
was not aware that deferred compensation had to be treated dif-
ferently today than when he worked for the Internal Revenue
Service in the 1970’s. Maltzahn also admitted that commodity
wages were not properly noted on the 2012 tax return and that
nothing had been done to correct that—no amended return had
been filed, nor was he planning to file one. He explained that
filing an amended return was unnecessary, since there would
be no net income increase because it would show additional
income (commodity wages) but would also deduct the same
amount. There was no testimony by Maltzahn regarding any
kind of accounting record maintained to track past services
rendered by Charles, Randall, or Donald, for which payment
would later be expected.
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Brothers’ Efforts Already
Compensated Through
Ownership Interests.
   Randall and Donald justified distributing commodity wages
only to themselves rather than sharing the profits with their
sisters because their sisters had not “done anything” for
McDonald Farms. This explanation suggests that Randall and
Donald believe they are entitled to take all the profits from the
corporation due to their personal involvement with the family
farming business. Randall testified:
         [Counsel for Jones]: And when you paid commodity
      wages to yourself, did you consider paying those out as
      dividends to the minority shareholders?
         [Randall]: No.
         [Counsel for Jones]: Why not?
         [Randall]: They weren’t — they hadn’t worked any-
      thing — it was a wage. It was back wages is what we
      did. They hadn’t done anything for the corporation.
         [Counsel for Jones]: So you considered that was back
      wages, and they hadn’t done anything for the corpora-
      tion, so the shareholders weren’t entitled to that?
         [Randall]: Correct.
   This explanation, however, fails to consider the deci-
sion made by their parents to give each of the sisters a
7.125-­percent share of the corporation. Presumably that deci-
sion was intended to confer some benefit on the sisters. The
entitlement (to all profits) position further strains credulity
in light of Randall and Donald together receiving 86 percent
of the corporation’s stock from their parents—a corpora-
tion appraised at over $9 million in 2012. Receiving almost
$4 million in farmland and other assets might be considered
a fairly substantial “payment” for the brothers’ efforts. The
brothers have been generously rewarded for their loyalty to
the family’s farm operation, as signified by Charles’ trans-
ferring his remaining stock to only Randall and Donald in
June 2012.
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   McDonald Farms owns approximately 1,100 acres of irri-
gated (pivot, gravity, and drip) and dry cropland with building
improvements. Building improvements include a grain storage
facility with an estimated capacity of 305,000 bushels, two
Quonset buildings, three machine sheds, a barn, a garage, and
a home. An appraisal in 2012 placed a value of $9,195,000
on the land, bins, and irrigation pivots. Randall acknowledged
this to be “a fair number at the time [he] sat down with . . .
Maltzahn in 2012.” McDonald Farms generates revenue in one
way—by leasing farmland, and it always leases that land to
R & T Farms and D & LA Farms.
   Despite being given 86-percent ownership of this $9 mil-
lion entity, the brothers nevertheless suggest they are entitled
to receive additional payments for past unpaid services given
to the corporation; services for which they can barely describe
and have no agreements or records to support.
Tax Strategy Cannot Justify Random,
Unsupported Payments to Only
Majority Shareholders.
   The explanation provided by the majority shareholders
and the corporation’s accountant for how they arrived at the
amount of commodity wages to be paid had nothing to do with
any accounting of time and services provided to the corpora-
tion by each shareholder; rather, it was solely about paying
out any profits to reduce the corporation’s taxable income to
$50,000. McDonald Farms was in the business of leasing farm-
land, with its primary asset being the corporation’s ownership
of approximately 1,100 acres of land; the corporation had no
debt. In order to reduce McDonald Farms’ taxable income to
$50,000 each year, excess profits were used to purchase new
equipment, prepay expenses for the next year, and pay com-
modity wages.
   When Randall was asked about paying his father, Charles,
$50,173 in commodity wage payments in 2010, the following
exchange took place:
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   [Counsel for Jones]: That payment was not based on a
calculation of [Charles’] contributions to the management
of the company?
   [Randall]: I don’t know how [Maltzahn] c[a]me up
with it.
   [Counsel for Jones]: So you didn’t come up with the
calculation?
   [Randall]: No.
   [Counsel for Jones]: You didn’t make a decision about
what [Charles] had contributed to the company in making
that payment?
   [Randall]: No.
   [Counsel for Jones]: And the same would be true of the
commodity wage payments that were made to [Charles]
in 2012?
   [Randall]: Correct.
   [Counsel for Jones]: You didn’t make any calculation
on what he had contributed to the company to justify
those payments?
   [Randall]: Correct.
   [Counsel for Jones]: Now, the commodity wage pay-
ments to you and Don in 2012 and 2013 are the same,
right?
   [Randall]: Correct.
   [Counsel for Jones]: And when you made those pay-
ments, you did not consider the specific services that each
of you provided to McDonald Farms?
   [Randall]: It was wages for McDonald Farms — from
McDonald Farms. I don’t know if we specified specific
things that we did to earn them wages.
   ....
   [Counsel for Jones]: You didn’t have any time sheets
or other records of work actually performed when you did
this, did you?
   [Randall]: No.
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        [Counsel for Jones]: You didn’t look at what others
     who provide similar services for other corporations did,
     did you?
        [Randall]: No.
        [Counsel for Jones]: Did you consider what an inde-
     pendent investor would consider reasonable in terms of
     what the commodity wages were?
        [Randall]: No.
        [Counsel for Jones]: You didn’t consider what Rosemary
     or [Jones] might think of the commodity wages?
        [Randall]: No.
        [Counsel for Jones]: Certainly didn’t consult with
     them?
        [Randall]: They don’t know what we’ve done for the
     corporation.
        [Counsel for Jones]: You didn’t go to them and say this
     is what we’ve done and what we think we deserve?
        [Randall]: No.
        [Counsel for Jones]: And it didn’t even cross your
     mind to do that?
        [Randall]: No.
   Randall acknowledged that if it looked like McDonald
Farms was going to realize more than $50,000 in income, then
he would sit down with the accountant and try to figure out
ways to get the net income down to $50,000. The decision
on how to do that was not based on any prior corporate plan-
ning; rather, the decisions appeared fairly random. Sometimes
commodity wages were paid. Sometimes fertilizer was pre-
paid. And sometimes, new equipment was purchased. As an
example, the 2009 profit and loss worksheet was showing
the corporation’s net income was likely to be $477,450 that
year, so to get that net income down to $50,000, McDonald
Farms bought a new “[grain] dryer and a leg” ($210,228),
even though the brothers had planned to make that purchase
through their corporations. While this purchase added value
to McDonald Farms, it obviously was a significant personal
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savings to the brothers by not having to make that investment
through their own corporations. The same could be said for
the irrigation systems purchased by McDonald Farms in 2012
($174,043) and 2013 ($173,716). And although there is some
merit to Jones’ arguments about possible conflicts of interests
between the brothers acting in their personal capacities for
their own farming corporations versus acting in their capacities
as majority shareholders of McDonald Farms when making
these purchasing decisions, this dissent focuses only on the
oppressive nature of the commodity wages.

                          ANALYSIS
Payment of Commodity Wages for
Undocumented Past Services
Is Oppressive Conduct.
   The majority states, “Through this action and her argu-
ments on appeal, Jones is essentially challenging McDonald
Farms’ tax strategy.” I do not see Jones’ arguments being
limited in this way. Although Jones does take issue with how
the corporation’s tax strategy deprives minority shareholders
of any profits, she largely takes issue with how the corpora-
tion has elected to take corporate profits and distribute them
as commodity wages (for past services) to some sharehold-
ers instead of paying dividends to all shareholders. Of the
$628,500 paid in commodity wages from 2012 to 2013, each
sister would have been entitled to 7.125 percent of those
profits if they had been distributed as dividends. (Although
Jones and her sister acquired their interest in the corporation
upon the passing in 2010 of their mother, Betty, this dissent
addresses only the 2012 and 2013 commodity wage distribu-
tions which were made when the brothers had become major-
ity shareholders.)
   Most of the testimony at trial was focused more on the pay-
ment of commodity wages for past services than it was on the
equipment purchases or other expenses paid for by the corpo-
ration. Jones, for example, did not object to the corporation’s
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purchase of the irrigation pivots. She argues that when consid-
ering capital improvements, a corporation should also consider
paying dividends. Further, any increase in the value of the cor-
poration from capital improvements did not benefit her because
Randall and Donald “have refused to pay her fair value for
her shares.” Brief for appellant at 27. Both she and her sister,
Rosemary, testified they had not received any economic benefit
from their shares in the corporation. Rosemary did, however,
have the benefit of living “on the homeplace” which is located
on McDonald Farms’ land. She does not pay rent for the house,
barn, and two lots there; however, she testified that it is “very
stressful living there” because “they [presumably her brothers]
don’t want me there.”
   So the primary issue is not the general concept of trying
to keep the corporation’s taxable income at $50,000 to stay
within the 15-percent tax bracket, as there are certainly equip-
ment investments and prepaid business costs that improve the
overall business operation and add value. Rather, the problem
arises when an arbitrary figure is created to pay out remaining
net income only to the majority shareholders, and that figure is
based on accounting practices that were speculative (no agree-
ments on past wages, no records of specific services rendered,
no time records), or even nonexistent (commodity wages paid
in 2012 were not reported on the corporation’s tax return). So
the issue is not by itself the goal of reducing the corporation’s
taxable income to $50,000; rather, it is whether Randall and
Donald exercised their fiduciary duty of good faith and fair
dealing with Jones and Rosemary when they made the deci-
sion to distribute profits only to themselves under the guise of
commodity wages instead of distributing those profits in pro-
portionate shares to all shareholders.
   An officer or director of a corporation occupies a fiduciary
relation toward the corporation and its stockholders, and is
treated by the courts as a trustee. Woodward v. Andersen, 261
Neb. 980, 627 N.W.2d 742 (2001). Although the burden is
ordinarily upon the party seeking an accounting to produce
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evidence to sustain the accounting, when another person is in
control of the books and has managed the business, that other
person is in the position of a trustee and must make a proper
accounting. Id. The burden of proof is upon a party holding
a confidential or fiduciary relation to establish the fairness,
adequacy, and equity of a transaction with the party with whom
he or she holds such relation. Id. As noted in Woodward, once
the fiduciary relationship between the parties is established
and evidence is presented that certain transactions existed that
allegedly breached a fiduciary duty, the burden shifts. In this
case, the burden shifted to Randall and Donald to prove the
fairness, adequacy, and equity of the commodity wage distri-
bution to themselves and their father, Charles. In my opinion,
they failed to meet this burden.
   Randall and Donald failed to provide any reliable authority,
nor a proper factual basis, to demonstrate the appropriateness
or fairness in the distribution of commodity wages in the man-
ner present here. The notion that majority shareholders can
simply pay themselves any amount of money for past services
without the existence of any agreement with the corporation,
without any expectation that wages would ever be paid, and
without any documentation or specificity of past services
performed, belies the concept of fair dealing with other share-
holders. It is clear the district court had some concern about
the evidence presented, but was perhaps hesitant to compel
dissolution of this family farming corporation. That is under-
standable. It has been widely observed that courts are reluctant
to apply the drastic remedy of statutory dissolution, especially
in proceedings by a shareholder; and because dissolution and
liquidation is so drastic, it must be invoked with extreme cau-
tion. See In re Invol. Dissolution of Wiles Bros., 285 Neb.
920, 830 N.W.2d 474 (2013). The district court in the present
case concluded:
         Based upon the evidence presented at trial as set forth
      above, the Court finds that the evidence does not estab-
      lish the conduct of the majority shareholders was such
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      as to deprive [Jones] of any return on her shares. It is
      quite possible that continuation of payment of commodity
      wages without the payment of dividends to shareholders
      would result in that finding, but based upon the evidence
      as was presented, the evidence at this time does not sup-
      port a finding of oppression.
There is no clear authority in Nebraska as to exactly what
might constitute oppression; thus, it is unclear on what basis
the district court reached its conclusion that the evidence did
not support a finding of oppression. We know that oppres-
sion does not include simply being unkind or mistrusting, see
Detter v. Miracle Hills Animal Hosp., 12 Neb. App. 480, 677
N.W.2d 512 (2004), overruled in part on other grounds, Detter
v. Miracle Hills Animal Hosp., 269 Neb. 164, 691 N.W.2d
107 (2005); nor does it include the failure to hold sharehold-
ers’ meetings or appoint a second director, see Woodward v.
Andersen, 261 Neb. 980, 627 N.W.2d 742 (2001). Further, nei-
ther the Business Corporation Act applicable in this case, nor
the new Nebraska Model Business Corporation Act, § 21-201
et seq. (Cum. Supp. 2016) (operative January 1, 2017), pro-
vide any guidance on what constitutes oppressive conduct.
Therefore, it is helpful to consider decisions in other states
which involve alleged oppressive conduct in closely held
farming or ranching corporations.
   In Baur v. Baur Farms, Inc., 832 N.W.2d 663 (Iowa 2013),
the Iowa Supreme Court similarly noted the absence of any
definition of oppressive or oppression in Iowa’s Business
Corporations Act. Baur Farms, Inc. observed that its court
of appeals had examined the decisions of other jurisdictions
and “concluded oppression is ‘an expansive term used to
cover a multitude of situations dealing with improper conduct
which is neither illegal nor fraudulent.’” 832 N.W.2d at 670.
Baur Farms, Inc. quoted from an Oregon case as an example
of oppression:
      “[T]he case of the shareholder-director-officers refusing
      to declare dividends, but providing high compensation
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     for themselves and otherwise enjoying to the fullest
     the ‘patronage’ which corporate control entails, leaving
     minority shareholders who do not hold corporate office
     with the choice of getting little or no return on their
     investments for an indefinite period of time or selling
     out to the majority shareholders at whatever price they
     will offer.”
832 N.W.2d at 670.
   Baur Farms, Inc. further noted:
     Other jurisdictions have developed several sometimes
     overlapping standards for evaluating minority sharehold-
     ers’ claims of oppression in closely held corporations.
     Some have concluded oppression is “‘burdensome, harsh
     and wrongful conduct’ . . . or ‘a visible departure from
     the standards of fair dealing and a violation of fair play
     on which every shareholder who entrusts his money to
     a corporation is entitled to rely.’” . . . Other courts have
     linked oppression to the derogation of the fiduciary duty
     “of utmost good faith and loyalty” owed by shareholders
     to each other in close corporations. . . .
        A third approach, now perhaps the most widely
     adopted, links oppression to the frustration of the reason-
     able expectations of the corporation’s shareholders. . . .
        Courts applying the reasonable expectations standard
     have granted relief when the effect of a majority share-
     holder’s conduct is to deprive a minority shareholder of
     any return on shareholder equity.
832 N.W.2d at 670-71 (citations omitted).
   Baur Farms, Inc. also addressed oppression in the context
of stock transfer price restrictions, stating, “[s]ome courts
have declined to enforce transfer price restrictions determined
by formulas producing transfer prices so small in relation
to the true value of the shares as to make the restrictions
unconscionable or oppressive.” 832 N.W.2d at 671. The Iowa
Supreme Court adopted a “reasonableness standard” for eval­
uating minority shareholder claims of oppression, noting that
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“[m]anagement-controlling directors and majority sharehold-
ers of such corporations have long owed a fiduciary duty to
the company and its shareholders.” Id. at 673-74. Further, this
duty “encompasses a duty of care and a duty of loyalty to the
corporation” as well as a duty to “conduct themselves in a
manner that is not oppressive to minority shareholders.” Id. at
674. The Iowa Supreme Court held that “majority shareholders
act oppressively when, having the corporate financial resources
to do so, they fail to satisfy the reasonable expectations of a
minority shareholder by paying no return on shareholder equity
while declining the minority shareholder’s repeated offers to
sell shares for fair value.” Id. With regard to determining fair
value, the court stated:
         Where stock transfer restrictions have provided for
      purchase by a corporation at book value, some courts
      have concluded the restrictions may be enforced if the
      value has been determined in accordance with gener-
      ally accepted accounting practices. [Citations omitted.]
      Significant discrepancies between market value and book
      value have cast doubt on the enforceability of provisions
      requiring transfers at book value. [Citations omitted.]
      Courts will thus consider whether the accounting methods
      used in establishing book value are fair and equitable
      to all the parties involved, and where arbitrary valua-
      tions appear on the books, courts have substituted values
      derived from acceptable accounting procedures.
Baur v. Baur Farms, Inc., 832 N.W.2d 663, 675-76 (Iowa
2013).
   As in the case before us, Baur Farms, Inc. also involved
a closely held corporation in which the minority shareholder
“has no access to an active market in its shares that might
allow his realization of a return on his equity position.” 832
N.W.2d at 676. And like the minority shareholder in Baur
Farms, Inc., Jones lacks the “voting power to force the board
of directors to set a book value that is reasonably related to
the fair value of the company’s assets.” 832 N.W.2d at 676.
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Because the district court in Baur Farms, Inc. had dismissed
the case after the minority shareholder’s presentation of evi-
dence, the Iowa Supreme Court reversed, and remanded for
the district court to take any additional evidence to determine
the fair value of minority shareholder’s equity interest in the
corporation, and to apply the reasonable expectation standard it
adopted in its opinion to determine if the corporation had acted
oppressively. And, notably, if the conduct was determined to be
oppressive, Baur Farms, Inc. acknowledged the district court’s
equitable authority to be “flexib[le] in resolving the dispute.”
832 N.W.2d at 677.
   Another state has carefully considered the issue of oppres-
sion in a closely held ranching corporation. The Montana
Supreme Court has stated, “Oppression may be more easily
found in a close-held, family corporation than in a larger, pub-
lic corporation.” Skierka v. Skierka Bros., Inc., 192 Mont. 505,
519, 629 P.2d 214, 221 (1981). And in Fox v. 7L Bar Ranch
Co., 198 Mont. 201, 209, 645 P.2d 929, 933 (1982), it stated,
“Shares in a closely held corporation are not offered for public
sale. Without readily available recourse to the market place, a
dissatisfied shareholder is left with severely limited alterna-
tives if one group of shareholders chooses to exercise leverage
and ‘squeeze’ the dissenter out.” The Montana Supreme Court
also noted that while many courts hold that “‘oppression sug-
gests harsh, dishonest or wrongful conduct,’” there are other
courts that “find it helpful to analyze the situation in terms
of the ‘fiduciary duty’ of good faith and fair dealing owed by
majority shareholders to the minority.” Id. And “‘other com-
mentators have developed a definition for oppression in terms
of “the reasonable expectations of the minority shareholders in
light of the particular circumstances of each case.” . . .’” Id. at
209-10, 645 P.2d at 933.
   Fox v. 7L Bar Ranch Co., supra, involved a closely held
family corporation (7L Bar Ranch) consisting of 17,600 acres
of largely grazing land which was being leased at consider-
ably less than its market value. The 7L Bar Ranch corporation
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was interrelated to two other family corporations, one of
which was the sole user of 7L Bar Ranch’s grazing land. A
dispute arose between two brothers. One brother claimed that
the cashflow of the corporation in which he had a 50-percent
interest was controlled by one in which he had a 25-percent
interest; the complaining brother never received any dividend
or remuneration of any kind from any of the corporations even
though two of the businesses showed retained earnings of
over $400,000 and one of them had cash assets that exceeded
$400,000. The Montana Supreme Court agreed that this inter-
relationship of corporations allowed one brother to control
whether a profit was made by any corporation in which the
other brother held stock. The court noted:
      “Although dividend withholding is used as a squeezeout
      technique and is used in corporations of all sizes, this
      technique (indeed practically all squeeze techniques) is
      applied most frequently in close corporations . . . .
      ‘Most of the abuses in the field of dividend policy have
      occurred among the smaller corporations, especially in
      cases where there is a concentrated control in a single
      family.’ . . .”
Id. at 211, 645 P.2d at 934. The court went on to say:
      “The enterprise before us is a ‘close corporation’ in the
      strictest sense, that is, one in which, regardless of the
      distribution of the shareholdings, ‘management and own-
      ership are substantially identical’ . . . . In such a case,
      it seems almost self-evident, the fiduciary obligation of
      the majority to the minority extends considerably beyond
      what would be its reach in the context of a larger or less
      closely held enterprise. Here the relationship between
      the shareholders is very much akin to that which exists
      between partners or joint venturers.”
Fox v. 7L Bar Ranch Co., 198 Mont. 201, 213, 645 P.2d 929,
935 (1982).
   The Montana Supreme Court observed that “[t]his is a case
where control of a set of corporations, designed to be run by
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one person, brought to boil an already bitter family struggle
between people with a demonstrated inability to get along.”
Id. at 214, 645 P.2d at 936. The court concluded the excluded
brother “had a reasonable expectation of sharing in his inherit­
ance.” Id. The Montana Supreme Court affirmed the district
court’s finding of oppression (and deadlock in voting power)
and its order dissolving 7L Bar Ranch corporation.
   Fortunately in the case before us, there does not appear to
be a bitter family struggle or an inability to get along; how-
ever, there has been a denial of the two minority sharehold-
ers’ reasonable expectation of sharing in their inheritance.
Applying the legal principles set forth in Iowa and Montana,
majority shareholders act oppressively when, having the cor-
porate financial resources to do so, they fail to satisfy the
reasonable expectations of a minority shareholder by paying
no return on shareholder equity while declining the minority
shareholder’s repeated offers to sell shares for fair value. The
majority shareholders in this case, however, might suggest
that corporate financial resources are not available because
the net income has been reduced by payment of commodity
wages (to which they claim entitlement for payment of past
services) in an effort to control taxable corporate income. I do
not find this position persuasive for the reasons already stated.
Additionally, even if the use of commodity wages may be a
preferred method of income distribution for an agriculture-
based corporation, its availability does not by itself justify
the use of commodity wages to avoid sharing profits with
other shareholders.
   I agree with the following: Commodity wages can be paid
in lieu of actual wages; commodity wages may be preferred
over actual wages, because the corporation can avoid pay-
ment of payroll taxes; and minimizing a corporation’s taxable
income is a worthy goal. However, paying corporate profits to
only certain shareholders and calling them commodity wages
for unpaid past services does not, in my opinion, pass muster.
There is no question that attempting to minimize the payment
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of taxes through various tools and exceptions allowed under
the tax code is a common pursuit. As Judge Learned Hand has
been often quoted to say:
      [A] transaction, otherwise within an exception of the tax
      law, does not lose its immunity, because it is actuated by
      a desire to avoid, or, if one choose[s], to evade, taxation.
      Any one may so arrange his affairs that his taxes shall be
      as low as possible; he is not bound to choose that pat-
      tern which will best pay the Treasury; there is not even a
      patriotic duty to increase one’s taxes.
Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934). By
all appearances in Gregory, a shareholder’s alleged corporate
reorganization was on the surface consistent with applicable
laws, and that shareholder was able to accomplish the sale of
certain stock at a lower taxable rate as part of that process.
However, the Gregory court went on to conclude that the
shareholder in that case had engaged in “an elaborate scheme
to get rid of income taxes” which did not properly fall within
the intention of the corporate reorganization laws. 69 F.2d
at 810.
   My reference to the Gregory case is not to suggest any
“elaborate scheme” to avoid income taxes took place here;
rather, the point is that just because the tax code allows the
use of commodity wages does not mean that commodity wages
were intended to be used in the way they were used here—as
an alternative method of deferred or catch-up or gratuitous or
“morally” owed compensation—especially when there is no
evidence documenting any agreement or other obligation by
the corporation to pay wages of any type (as officers, directors,
or employees) to any of the shareholders in this case.
   The majority opinion seems to suggest that the commod-
ity wages paid here are justified because Maltzahn said they
were reasonable and “Jones’ own expert, Scow, could not
opine whether the wages paid were appropriate, and he also
conceded that an annual farm management fee of 7 percent to
10 percent of gross income would be reasonable.” However,
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Christopher Scow made it clear that he could not say whether
the commodity wages paid in this case were appropriate
because he did not know “what activities Charles was provid-
ing and being paid for.” Scow said the same thing regarding
commodity wages paid to Randall and Donald: “I cannot make
a determination if it’s appropriate, because I do not know what
services they actually provided.” Further, it is not particularly
relevant to the case before us that farm managers for absentee
owners are paid 7 to 10 percent of the gross income produced
on a farm. This case does not involve absentee owners; in fact,
the familial relationship between the owners and farm tenants
in this case would have significantly minimized the need for
much of the work provided by a farm management company.
Absentee farm owners are obviously agreeing in advance to
pay that 7- to 10-percent farm management fee; when grain
is sold and income is received, Scow said “we will deduct the
percentage of our fee at that time.” Scow testified that he sat
in meetings with prospective clients, most often with the farm
manager, to explain the services provided, such as bookkeep-
ing and accounting and insuring the property. Scow’s company
generated monthly or quarterly reports, and it had its own
accounting and bookkeeping staff. There is no evidence in the
present case of any verbal or written agreements regarding
fees or wages for any particular services, nor, according to
Randall’s own testimony, was there any expectation that such
fees or wages would be paid. Notably, when Scow was asked
if he had heard of “other farm managers receiving income
in years after the services for which it was performed,” he
responded, “I’ve not heard of that, no. I’ve not heard of any-
one else doing that.”
   The commodity wages paid to Randall, Donald, and Charles
for alleged unpaid (and undocumented) past services are an
unfair and unjustified business decision that was disguised
as an acceptable tax reduction policy. Under this tax prac-
tice, Randall and Donald can indefinitely pay themselves
unlimited commodity wages for past services, because there
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is no agreement or other documentation to support the tim-
ing or the value of those services. It can be any amount, for
any vaguely described service, rendered at no specific time.
When asked how much more he thought he was owed in back
wages, Randall said, “I have no idea.” And when asked if he
had even started to calculate that, Randall replied, “No,” and
he had “[n]o idea” whether he was done paying back wages
to Donald and himself. Further, Randall’s own testimony
made it clear that no consideration was ever given to sharing
any portion of the corporation’s net profits with the minor-
ity shareholders because “[t]hey hadn’t done anything for
the corporation.”
   The majority opinion inappropriately characterizes this dis-
sent’s discussion of the commodity wage issue as an “attempt[]
to shame Donald and Randall for the shares their parents obvi-
ously believed they deserved.” To the contrary, this dissent has
focused on Randall and Donald operating under a mistaken
(not shameful) impression that they were entitled to keep all
of McDonald Farms’ profits, because they did the farming
and their sisters did not. Understandably, the idea of having to
share those profits with their sisters was new to Randall and
Donald, because the brothers had only recently acquired their
majority interest in the corporation in June 2012. And further,
because the farm economy was good at that time (high com-
modity prices), they found themselves in the fortunate posi-
tion of having large amounts of corporate profits available for
distribution, another new concept for them as new majority
shareholders of McDonald Farms. But just because they were
inexperienced in finding themselves in such a situation does
not justify the decision they made to completely exclude their
sisters from a share of those profits.
   The majority opinion also says that Charles “not only
acquiesced, but also initiated and partook in the decision
to pay commodity wages to the majority shareholders as a
tax planning strategy.” However, Randall testified that after
Charles fell and hit his head in July 2012, he did not make
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any financial decisions for himself. Randall acknowledged
that Charles did not participate in the conversations with
Maltzahn about payment of commodity wages in 2013 (total-
ing $397,200) and that Charles “probably was not” part of
those conversations for the 2012 commodity wages (totaling
$231,300) either. Randall also acknowledged that after Charles
“went into the hospital and Riverside Lodge” (following his
fall in July 2012), Randall handled Charles’ affairs pursuant to
a power of attorney.
   The majority states that this “dissent’s claim that [Jones’]
reasonable expectations were violated as a result of payment
of commodity wages” is “suspect,” because commodity wages
were not even paid between December 2010 (when Jones
received her shares) and January 2012 (when Jones sought to
be bought out). However, commodity wages were paid in 2010,
so the practice of distributing net income by that method rather
than dividends was a practice Jones would have known to exist
upon acquiring her shares in the corporation. Additionally,
Jones did not file a lawsuit until April 1, 2013, after the 2012
commodity wages ($231,300) were paid to the majority share-
holders and no dividends were issued to the minority share-
holders. The sisters’ reasonable expectations of benefiting from
their inheritance either by dividends or by having their interest
in the corporation bought out commenced upon acquiring their
shares. Further, the issue is not just that commodity wages
were distributed only to some shareholders for alleged unpaid
past services, the issue is that profits were not being shared
with all shareholders in a good faith, fair manner, as became
more evident with the 2012 and 2013 commodity wage pay-
ments. And contrary to the majority’s implication, this dissent
is not invading the province of the estate planning decisions
made by Charles and Betty; nor is it disregarding Jones’ “total
lack of involvement in the family farm.” Rather, the focus of
this dissent is on the reasonable expectations of shareholders in
a corporation. And just because the sisters did not pay for their
shares (notably, neither did Randall or Donald), nor contribute
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to the farm labor, does not mean that they should be excluded
from corporate profits being enjoyed by other shareholders.
Randall and Donald failed to exercise their fiduciary duty of
good faith and fair dealing with Jones and Rosemary when
they made the decision to distribute profits only to themselves
under the guise of commodity wages for past unpaid services
instead of distributing those profits in proportionate shares to
all shareholders; or alternatively, by failing to consider a rea-
sonable buyout of Jones’ shares for fair value. Under any stan-
dard for evaluating a minority shareholder’s claim of oppres-
sive conduct, as discussed previously, this should qualify as
oppressive conduct.

Alternatives to Dissolution
of Corporation.
   Having concluded the evidence supports a finding of oppres-
sive conduct, I also agree that dissolution is a drastic measure
and should be invoked with extreme caution. See Woodward
v. Andersen, 261 Neb. 980, 627 N.W.2d 742 (2001). Even
Jones says it is not her “preference to force a dissolution of
McDonald Farms. Rather, she wants simply to be paid fair
value for her shares and leave Rand[all] and Don[ald] to run
the business of McDonald Farms.” Brief for appellant at 39.
Jones suggests it is within the district court’s equitable author-
ity to order a buyout of Jones’ shares at fair value. I agree that
a district court has the authority to fashion equitable alterna-
tives to a corporate dissolution in order to avoid such a drastic
measure; in this case, there may also be other alternatives to
dissolution or a buyout. Nebraska Supreme Court cases provide
some guidance on this issue.
   Beginning with the notion that an officer or director of a
corporation occupies a fiduciary relation toward the corpo-
ration and its stockholders and is treated by the courts as a
trustee, our Supreme Court has stated:
      An officer or director must comply with the applicable
      fiduciary duties in his or her dealings with the corporation
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      and its shareholders. . . . Where a director has acted in
      complete good faith and breached no fiduciary duties, he
      or she is not liable for mere mistakes in judgment. . . .
      However, a violation by a trustee of a duty required by
      law, whether willful, fraudulent, or resulting from neglect,
      is a breach of trust, and the trustee is liable for any dam-
      ages proximately caused by the breach.
Trieweiler v. Sears, 268 Neb. 952, 973, 689 N.W.2d 807, 830-
31 (2004) (citations omitted).
   Trieweiler also tells us that “[e]quity is not a rigid concept,
and its principles are not applied in a vacuum, but instead,
equity is determined on a case-by-case basis when justice and
fairness so require.” 268 Neb. at 980, 689 N.W.2d at 835. And
when “a situation exists which is contrary to the principles of
equity and which can be redressed within the scope of judicial
action, a court of equity will devise a remedy to meet the situa-
tion.” Id. at 980, 689 N.W.2d at 835-36. Finally, “[w]here relief
may be granted, although no precedent may be found, the court
will so proceed,” id. at 980, 689 N.W.2d at 836, and “[e]quity
will always strive to do complete justice[,]” id. at 981, 689
N.W.2d at 836. Trieweiler permitted a minority shareholder to
individually recover money in his corporate derivative action
based on misappropriation of money by the corporation, among
other things. Our Supreme Court noted that “there are circum-
stances in which individual damages may be appropriately
awarded in connection with a derivative action.” Id. at 971,
689 N.W.2d at 829. In the case at hand, for example, one alter-
native to dissolution or a forced buyout might be to require
the brothers to pay the sisters their proportionate share of the
$628,500 in corporate profits that were distributed as commod-
ity wages in 2012 and 2013.
   To the extent a buyout is the preferred alternative, it is clear
that a determination of the fair value of a corporation’s shares
should comply with some established legal principles. See
F.H.T., Inc. v. Feuerhelm, 211 Neb. 860, 320 N.W.2d 772 (1982)
(book value is determined by generally accepted accounting
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principles; as applied to corporate stock, book value ordinarily
means net value shown on corporate books of account of all
assets of corporation after deducting all liabilities); Trebelhorn
v. Bartlett, 154 Neb. 113, 47 N.W.2d 374 (1951) (actual value
of corporate stock of closely held corporation is ordinarily
determinable from then net worth of corporation divided by
number of bona fide shares issued and outstanding; for that
purpose, evidence of factors and elements, such as assets,
liabilities, and all other matters pertinent to value of particular
corporation involved, may be admitted and considered); Shuck
v. Shuck, 18 Neb. App. 867, 806 N.W.2d 580 (2011) (to deter-
mine value of closely held corporation, trial court may con-
sider nature of business, corporation’s fixed and liquid assets
at actual or book value, corporation’s net worth, marketability
of shares, past earnings or losses, and future earning capacity;
method of valuation used for closely held corporation must
have acceptable basis in fact and principle).
   Also, as previously noted in Baur v. Baur Farms, Inc., 832
N.W.2d 663 (Iowa 2013), when stock transfer restrictions
have provided for purchase by a corporation at book value,
some courts have concluded the restrictions may be enforced
if the value has been determined in accordance with gener-
ally accepted accounting practices; however, significant dis-
crepancies between market value and book value should cast
doubt on the enforceability of such a provision. Courts should
consider whether the accounting methods used in establishing
book value are fair and equitable to all the parties involved,
and where arbitrary valuations appear on the books, courts can
substitute values derived from acceptable accounting proce-
dures. Id.
   Based on these legal principles, there are alternative equi-
table measures that can be taken to avoid corporate dissolution
while providing some relief to Jones as a result of her brothers’
oppressive conduct in denying her a proportionate share of the
corporation’s net profits or, alternatively, refusing to buy out
her shares at fair value.
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                         CONCLUSION
   In conclusion, I refer to the 2012 Census of Agriculture:
Nebraska State and County Data, 1 Geographic Area Series Pt.
27, U.S. Dept. of Agric., Pub. No. AC-12-A-27 (May 2014),
which reveals that the total number of farms in Nebraska at
that time was 49,969, comprising 45,331,783 acres of land.
A family or individual owned 42,543 of those farms; 2,974
were owned by partnerships; 3,784 were owned by corpora-
tions (of which 3,580 were family held corporations); and a
small number were held by others such as estates, trusts, and
cooperatives. Id. The average age of the principal operators
of the ­family-held farming corporations was 57. Id. What this
tells me is that there are thousands of family farm corpora-
tions approaching possible transfers of ownership, which we
can only hope will not end up in litigation as occurred here.
The drain on family and community resources, and more
importantly, the deterioration of family relationships that such
disagreements may cause, can be minimized if the Legislature
and the courts provide adequate guidance and alternatives
for resolving such conflicts. This is an important issue, and
this dissent is not the place for an exhaustive discussion of
that issue. Dissolution of a family farming corporation is an
extreme remedy and is rightly disfavored absent extreme cir-
cumstances. I agree with the district court’s decision to refrain
from ordering dissolution in this case; however, I do think the
law authorizes district courts to consider equitable alternatives,
as discussed. I would have reversed, and remanded for the dis-
trict court’s further consideration of those alternatives.