Hickey v. Hickey

The historical statutory context of ORS 60.952 is that it was enacted to reflect judicial practice and that practice has been to avoid penalizing controlling shareholders’ ownership interests in a manner that significantly departing from what was required to relieve minority shareholders from the oppressive conduct; and also to avoid increasing any value or benefit from a minority shareholders’ interest beyond what minority shareholders could reasonably expect or the fair value of the shares.

Andrew Hickey and H&H Cattle Feeders, Inc. (“Andy”) appealed from a judgment regarding self-dealing between Andy and Hickey Ranches, Inc. (“HRI”), a closely held family corporation of which Andrew Hickey was controlling shareholder. Multiple assignments of error were made as well as a cross-appeal by Denis Hickey, on behalf of HRI, all regarding the chosen remedies of the trial court. To prevent further self-dealing, the trial court revised the HRI by-laws and articles of incorporation so that Andy's preferred stock would no longer carry voting rights thereby making Denis the controlling shareholder and substantially lessening the value of Andy's shares. On appeal, the Court decided that while the law does allow a court to alter the provisions of by-laws and articles of incorporation of a company, the remedy of removing voting rights from Andy's preferred stock was reflective of historical judicial remedies for similar acts of self-dealing. Judgment reversed in part and remanded on appeal and cross-appeal. The other assignments of error and the cross-appeal are a matter of dispute over money awarded and have been remanded to the trial court to re-evaluate the evidence regarding amount.