Bohac v. Benes Service Co. , 310 Neb. 722 ( 2022 )


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    03/24/2022 01:07 AM CDT
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    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    Karen Bohac, Personal Representative of
    the Estate of Marlene A. Benes, deceased,
    appellant and cross-appellee, v. Benes
    Service Co., a Nebraska corporation,
    appellee and cross-appellant.
    ___ N.W.2d ___
    Filed January 14, 2022.   No. S-21-133.
    1. Equity: Stock: Valuation. A proceeding under the provisions of 
    Neb. Rev. Stat. § 21-2
    ,201 (Cum. Supp. 2020) to determine the fair value of
    a petitioning shareholder’s shares of stock is equitable in nature.
    2. Equity: Appeal and Error. An appellate court reviews an equitable
    action de novo on the record and reaches a conclusion independent of
    the factual findings of the trial court; however, where credible evidence
    is in conflict on a material issue of fact, the appellate court considers
    and may give weight to the circumstance that the trial court heard and
    observed the witnesses and accepted one version of the facts rather
    than another.
    3. Statutes: Appeal and Error. Statutory interpretation is a matter of law,
    in connection with which an appellate court has an obligation to reach
    an independent, correct conclusion irrespective of the determination
    made by the court below.
    4. Corporations: Appeal and Error. In ordering the terms of payment
    under 
    Neb. Rev. Stat. § 21-2
    ,201(e) (Cum. Supp. 2020), an appellate
    court will review for abuse of discretion.
    5. Corporations: Valuation: Words and Phrases. While the Nebraska
    Model Business Corporation Act’s election-to-purchase provisions
    do not explicitly define “fair value,” the act’s provisions governing
    appraisal rights state that “fair value” means the value of the corpora-
    tion’s shares determined using customary and current valuation concepts
    and techniques generally employed for similar businesses in the context
    of the transaction requiring appraisal.
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    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    6. Statutes: Legislature: Presumptions. In enacting a statute, the
    Legislature is presumed to know the general condition surrounding
    the subject matter of the legislative enactment, and it is presumed to
    know and contemplate the legal effect that accompanies the language it
    employs to make effective the legislation.
    7. Statutes: Judicial Construction: Legislature: Presumptions: Intent.
    Where a statute has been judicially construed and that construction has
    not evoked an amendment, it is presumed that the Legislature has acqui-
    esced in the court’s determination of the Legislature’s intent.
    8. Corporations: Merger. A dissenting minority shareholder’s right to a
    fair value appraisal can be triggered merely by the majority’s benign
    decision to engage in a merger or some other corporate transaction.
    Minority shareholders in these cases are protected from discounts for
    lack of marketability or minority status, not because there has been fault
    but simply to protect the vulnerability of the dissenter.
    9. Corporations: Valuation. A “going concern” premise of value is used
    in a fair value determination when the subject company is expected to
    continue to operate into the future.
    10. ____: ____. A “liquidation” premise of value is used in a fair value
    determination when the business is not expected to continue, and it
    requires a determination of the net amount that would be realized if the
    business is terminated and the assets are sold piecemeal.
    11. Corporations: Valuation: Words and Phrases. The asset-based
    approach is a type of methodology that can be used in fair value deter-
    minations. It is a general way of determining a value indication of a
    business’ assets and/or equity based directly on the value of the assets of
    the business less liabilities.
    12. ____: ____: ____. The asset-based approach is generally applied when
    valuing a business whose operations require significant investment in
    fixed assets.
    13. ____: ____: ____. The income approach is a type of methodology that
    can be used in fair value determinations. It is a general way of determin-
    ing a value indication of a business’ assets and/or equity based on the
    future, projected cashflow of a company.
    14. ____: ____: ____. The market approach is a type of methodology that
    can be used in fair value determinations. It is a general way of determin-
    ing a value indication of a business’ assets and/or equity by comparing
    the subject to similar investments that have been sold.
    15. Legislature: Intent. The intent of the Legislature is expressed by omis-
    sion as well as by inclusion.
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    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    Appeal from the District Court for Saunders County:
    Christina M. Marroquin, Judge. Affirmed in part, vacated
    in part, and in part reversed and remanded with directions.
    Jovan W. Lausterer, of Bromm, Lindahl, Freeman-Caddy &
    Lausterer, for appellant.
    Sheila A. Bentzen and Adam J. Kost, of Rembolt Ludtke,
    L.L.P., for appellee.
    Miller-Lerman, Cassel, Funke, Papik, and Freudenberg,
    JJ.
    Freudenberg, J.
    I. INTRODUCTION
    Leonard and Marlene A. Benes formed the Benes Service
    Co. (BSC) in 1966. Their children assisted in the day-to-day
    operations and eventually joined as stockholders of varying
    degrees. After Leonard passed away, four of the couple’s
    sons took over active management. After Marlene’s death, her
    owner­ship interest transferred to the couple’s daughters through
    her estate (the Estate). Karen Bohac, the personal representa-
    tive of the Estate and one of the couple’s daughters, began
    investigating BSC and its corporate practices, later filing a
    petition for dissolution. BSC responded with an election to
    purchase in lieu of dissolution.
    Trial was held on the matter to determine fair value of the
    Estate’s 14.84 percent interest in BSC. The trial court found that
    the fair value of 14.84 percent of BSC was worth $2,886,790.
    The district court declined to award Bohac expenses, attorney
    fees, and prejudgment interest, and it provided for payment
    of the judgment in annual installments over 5 years. Bohac
    appealed, and BSC cross-appealed, at which time we moved
    this appeal to our docket.
    We affirm in part, vacate in part, and in part reverse and
    remand with directions to the district court to recalculate the
    fair value of BSC and the Estate’s 14.84 percent interest in
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    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    accordance with this opinion and to set new payment terms
    according to such recalculated value.
    II. BACKGROUND
    BSC is a family-owned business consisting of both a farm
    implement division and a farming operation, organized as a
    C corporation in the State of Nebraska and formed in 1966 by
    Leonard and Marlene. Leonard passed away in 2011, at which
    time four of Leonard and Marlene’s five sons took over the
    active management of the company. Marlene passed away in
    August 2017. At the time of her death, four of the sons each
    owned approximately 20 to 21 percent of BSC, while Marlene
    owned a 14.84 percent interest in BSC. Each of the couple’s
    six daughters are devisees under Marlene’s will and would
    receive equal benefit from the Estate’s 14.84 percent interest.
    One of the daughters was employed by BSC for many years;
    she and her husband each hold a separate .61 percent interest
    in BSC.
    Bohac was Marlene’s power of attorney and became per-
    sonal representative of the Estate upon Marlene’s death. Bohac
    first began investigating BSC in order to file a tax return for
    the Estate. Upon investigation of BSC’s business practices,
    Bohac filed a petition for judicial dissolution on September
    20, 2018. Bohac alleged that four of the sons “acted in an
    illegal, oppressive and/or fraudulent manner” in multiple cir-
    cumstances: They were not holding required meetings, they
    were not obtaining director and stockholder approval for major
    transactions, they were not properly reporting income, and
    they were engaging in self-dealing activities, among other
    allegations.
    BSC filed an answer denying these allegations and then
    timely filed an election to purchase the Estate’s 14.84 percent
    of common stock in lieu of judicial dissolution of the com-
    pany. Based on this filing, Bohac was obligated to sell the
    Estate’s interest in lieu of dissolution pending a determination
    of fair value of such interest. The parties could not come to an
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    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    agreement as to the fair value of the 14.84 percent interest, and
    so a trial was held wherein the district court was tasked with
    making such determination.
    After an evidentiary hearing, the district court found that
    the fair value of the Estate’s 14.84 percent share of BSC was
    $2,886,790 as of September 19, 2018, the day before the peti-
    tion for dissolution was filed. The district court declined to
    award Bohac expenses, attorney fees, and prejudgment interest,
    and it provided for payment of the judgment in annual install-
    ments over 5 years.
    Bohac appealed, and BSC cross-appealed. We thereafter
    moved this appeal to our docket.
    III. ASSIGNMENTS OF ERROR
    Bohac assigns that the district court erred in (1) failing to
    apply the definition of “fair value” as set forth in 
    Neb. Rev. Stat. § 21-2
    ,171(3) (Cum. Supp. 2020); (2) applying lack of
    marketability and minority discounts to an asset approach as
    a going concern; (3) failing to find that Bohac had probable
    grounds for relief entitling the Estate to an award of expenses
    pursuant to 
    Neb. Rev. Stat. § 21-2
    ,201(e) (Cum. Supp. 2020);
    (4) failing to award Bohac interest starting on September 19,
    2018, pursuant to § 21-2,201(e); and (5) granting BSC 5 years
    to make annual, interest-free payments.
    On cross-appeal, BSC assigns that the district court erred
    in applying the asset-based approach over the income-based
    approach in its determination of the fair value of BSC.
    IV. STANDARD OF REVIEW
    [1,2] A proceeding under the provisions of § 21-2,201 to
    determine the fair value of a petitioning shareholder’s shares
    of stock is equitable in nature. 1 An appellate court reviews
    an equitable action de novo on the record and reaches a con-
    clusion independent of the factual findings of the trial court;
    1
    Anderson v. A & R Ag Spraying & Trucking, 
    306 Neb. 484
    , 
    946 N.W.2d 435
     (2020).
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    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    however, where credible evidence is in conflict on a material
    issue of fact, the appellate court considers and may give weight
    to the circumstance that the trial court heard and observed
    the witnesses and accepted one version of the facts rather
    than another. 2
    [3] Statutory interpretation is a matter of law, in connection
    with which an appellate court has an obligation to reach an
    independent, correct conclusion irrespective of the determina-
    tion made by the court below. 3
    [4] In ordering the terms of payment under § 21-2,201(e), an
    appellate court will review for abuse of discretion. 4
    V. ANALYSIS
    1. What Is “Fair Value” of The Estate’s
    14.84 Percent Interest in BSC?
    The issue of determining fair value of the Estate’s 14.84
    percent interest in BSC is a multistep analysis. This court
    must first consider the definition of “fair value” as applied to
    an election to purchase shares in lieu of judicial dissolution.
    Second, we must consider whether this definition of fair value
    includes, excludes, or has no effect on the applicability of dis-
    counts for lack of marketability and control.
    Third, we must determine the premise of value that will
    apply; here, the options include either “as a going concern”
    or “as if in liquidation.” Fourth, we must decide whether the
    principle of highest and best use mandates the application of a
    certain methodology to value BSC and then apply the selected
    methodology to the determined value of the company’s assets,
    income, or market value to come to a final conclusion as to
    the fair value of both BSC and the Estate’s 14.84 percent
    interest in BSC. Each component of this analysis is included
    2
    Id.
    3
    Id.
    4
    See Wayne L. Ryan Revocable Trust v. Ryan, 
    308 Neb. 851
    , 
    957 N.W.2d 481
     (2021) (citing Link v. L.S.I., Inc., 
    793 N.W.2d 44
     (S.D. 2010)).
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    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    within our fair value determination and is therefore reviewed
    de novo with weight given to the trial court for determinations
    of credibility. 5
    (a) “Fair Value” Definition
    In her first assignment of error, Bohac assigns that the dis-
    trict court erred in failing to apply the definition of “fair value”
    as set forth in § 21-2,171(3) to its calculation of the Estate’s
    14.84 percent interest in BSC. In its order, the trial court
    referred to definitions previously applied under 
    Neb. Rev. Stat. § 21-20
    ,166 (Reissue 2012); however, this statutory section
    was repealed prior to commencement of this suit and does not
    control this issue. 6 Because this definition will impact many
    other steps in the valuation analysis, it is essential that we
    define “fair value” before analyzing the value of the Estate’s
    14.84 percent interest in BSC.
    Bohac, on behalf of the Estate, initially brought this action as
    a petition for dissolution pursuant to 
    Neb. Rev. Stat. § 21-2
    ,197
    (Cum. Supp. 2020). In response, BSC filed an election to
    purchase in lieu of dissolution, as permitted by § 21-2,201.
    These two statutes are each within 
    Neb. Rev. Stat. §§ 21-2
    ,184
    through 21-2,202 (Cum. Supp. 2020) (Part 14) of the Nebraska
    Model Business Corporation Act (NMBCA).
    As provided by the NMBCA, if the parties engaged in an
    election to purchase in lieu of dissolution cannot reach an
    agreement within 60 days, the court shall stay dissolution
    proceedings and “determine the fair value of the petitioner’s
    shares” as of the day before the petition for dissolution was
    filed or as of such other date as the court deems appropriate. 7
    But the term “fair value,” as used within § 21-2,201, is not
    defined either in this section or elsewhere within Part 14 of
    the NMBCA.
    5
    See Anderson v. A & R Spraying & Trucking, 
    supra note 1
    . See, also,
    Wayne L. Ryan Revocable Trust v. Ryan, 
    supra note 4
    .
    6
    See § 21-20,166 (Cum. Supp. 2014).
    7
    § 21-2,201(d) (emphasis spplied).
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    Nebraska Supreme Court Advance Sheets
    310 Nebraska Reports
    BOHAC v. BENES SERVICE CO.
    Cite as 
    310 Neb. 722
    While not defined within Part 14, fair value is defined within
    
    Neb. Rev. Stat. §§ 21-2
    ,171 through 21-2,183 (Cum. Supp.
    2020) (Part 13) regarding appraisal rights at § 21-2,171(3). For
    purposes of appraisal rights,
    [f]air value means the value of the corporation’s shares
    determined:
    (i) Immediately before the effectuation of the corporate
    action to which the shareholder objects;
    (ii) Using customary and current valuation concepts
    and techniques generally employed for similar businesses
    in the context of the transaction requiring appraisal; and
    (iii) Without discounting for lack of marketability or
    minority status except, if appropriate, for amendments
    to the articles pursuant to subdivision (a)(5) of section
    21-2,172. 8
    Bohac urges us to adopt this definition in whole, to be used
    identically in Part 14. BSC urges us to instead abide by the
    limitation set forth by § 21-2,171, that definitions provided
    therein apply only to Part 13. BSC also points to official com-
    mentary, provided within a prior version of the standardized
    Model Business Corporation Act, from which the NMBCA is
    derived. That commentary stated, in part, “[a]s the introduc-
    tory clause of section 13.01 notes, the definition of ‘fair value’
    applies only to chapter 13.” 9
    There are two issues with BSC’s argument regarding the
    official Model Business Corporation Act commentary. First,
    this official commentary to the model act was not adopted
    by the Legislature as part of the NMBCA. Second, as stated
    within another section of the same official commentary relied
    upon by BSC, “Section 14.34 does not specify the components
    of ‘fair value,’ and the court may find it useful to consider
    valuation methods that would be relevant to a judicial appraisal
    8
    § 21-2,171(3).
    9
    3 Model Business Corporation Act Ann. § 13.01, official comment at
    13-12 (4th ed. 2013).
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    of shares under section 13.30.” 10 Thus, even the standardized
    Model Business Corporation Act recognizes that courts must
    sometimes look to Part 13 for guidance when defining these
    important terms. And that is exactly what this court has done
    previously when faced with the issue of defining fair value
    within the context of Part 14.
    In Anderson v. A & R Ag Spraying & Trucking, 11 two men
    formed a corporation. After one of the shareholders passed
    away, his interest in the corporation passed to his wife, who
    then petitioned the court for judicial dissolution pursuant to
    § 21-2,197. The other shareholder thereafter filed an election to
    purchase the corporation in lieu of judicial dissolution pursuant
    to § 21-2,201.
    [5] In Anderson, we stated:
    While the [NMBCA’s] election-to-purchase provisions do
    not explicitly define “fair value,” the act’s provisions
    governing appraisal rights state that “fair value” means
    the value of the corporation’s shares determined “[u]sing
    customary and current valuation concepts and techniques
    generally employed for similar businesses in the context
    of the transaction requiring appraisal[.]” 12
    We then applied this definition, originating in Part 13 of the
    NMBCA, to the election to purchase brought by the other
    shareholder under Part 14.
    Anderson mirrors this case, where the procedural actions
    were similar both in form and statutory scheme. The cases
    involved similar facts and circumstances surrounding a closely
    held corporation. The analysis only differs in application of the
    income approach methodology rather than the asset approach.
    Thus, like Anderson, we will apply Part 13’s definition of fair
    value to this action, even though it originated under Part 14.
    As a result, fair value shall be determined using customary and
    10
    Id., § 14.34, official comment at 14-170.
    11
    Anderson v. A & R Ag Spraying & Trucking, 
    supra note 1
    .
    12
    
    Id. at 493
    , 946 N.W.2d at 442.
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    BOHAC v. BENES SERVICE CO.
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    310 Neb. 722
    current valuation concepts and techniques generally employed
    for similar businesses in the context of the transaction requir-
    ing appraisal.
    (b) Discounts for Lack of
    Marketability and Control
    We next consider the implications that this definition of fair
    value will have on the applicability of discounts for lack of
    control and lack of marketability. Bohac, in her second assign-
    ment of error, assigns that the district court erred in applying
    lack of marketability and minority discounts. Bohac asserts that
    the definition of fair value from Part 13 should be adopted in
    full, including § 21-2,171(3)(iii), which states that fair value is
    calculated “[w]ithout discounting for lack of marketability or
    minority status except, if appropriate, for amendments to the
    articles pursuant to subdivision (a)(5) of section 21-2,172.”
    The exception described by § 21-2,172(a)(5) allows for
    application of the marketability or minority discounts in an
    appraisal action where the shareholder has requested payment
    for fair value of their shares based on certain foreseeable cor-
    porate actions, such as an amendment to the articles of incor-
    poration, merger, or a disposition of corporate assets pursuant
    to the bylaws. Section 21-2,172(a)(5) is not relevant in this
    matter, because the election to purchase in lieu of dissolution
    is not named by that subsection and is not similar to the type
    of foreseeable actions listed in that subsection. Adoption of the
    fair value definition provided by § 21-2,171(3) would thus pre-
    clude discounts in an elect-to-purchase action, as no exception
    would apply.
    We agree with Bohac and hold that the determination of fair
    value for purposes of an elect-to-purchase action under Part
    14 shall be defined using the definition of fair value, in its
    entirety, as provided within Part 13 at § 21-2,171(3).
    (i) “Fair Value”
    Our conclusion that fair value for purposes of an election-
    to-purchase action under Part 14 should be calculated without
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    BOHAC v. BENES SERVICE CO.
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    310 Neb. 722
    discounting for lack of marketability or minority status is
    informed by the use of the word “fair value” in contrast to
    another term that appears frequently in Nebraska statute—“fair
    market value.” 13 Like other courts and commentators, we find
    that the use of the term “fair value” instead of “fair market
    value” in this context suggests “disapproval of a fair market
    value approach and the discounting that would accompany it.” 14
    (ii) Official Commentary and NMBCA
    BSC asserts that lack of marketability and minority discounts
    are both applicable and appropriate here, once again referring
    to the official commentary discussed above and provided within
    a prior version of the standardized Model Business Corporation
    Act. As this commentary states, “the definition of ‘fair value’
    applies only to chapter 13. See the Official Comment to sec-
    tion 14.34 which recognizes that a minority discount may be
    appropriate under that section.” 15 There are three issues with
    BSC’s argument.
    [6] First and most important, the referenced official
    commentary, as stated previously, was not adopted by the
    Legislature when it passed the NMBCA. In enacting a statute,
    the Legislature is presumed to know the general condition
    surrounding the subject matter of the legislative enactment,
    and it is presumed to know and contemplate the legal effect
    that accompanies the language it employs to make effective
    the legislation. 16 If the Legislature intended for discounts to
    be expressly applicable to elect-to-purchase actions, it could
    have chosen either to amend the model language accordingly
    13
    See, e.g., 
    Neb. Rev. Stat. § 21-2448
    (2) (Reissue 2012).
    14
    Douglas K. Moll, Shareholder Oppression and “Fair Value”: Of Discounts,
    Dates, and Dastardly Deeds in the Close Corporation, 
    54 Duke L.J. 293
    ,
    336 (2004).
    15
    3 Model Business Corporation Act Ann., supra note 9.
    16
    J.S. v. Nebraska Dept. of Health & Human Servs., 
    306 Neb. 20
    , 
    944 N.W.2d 266
     (2020).
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    or to adopt the official commentary into our statutory scheme.
    It chose to do neither.
    [7] Conversely, we have previously recognized that where a
    statute has been judicially construed and that construction has
    not evoked an amendment, it is presumed that the Legislature
    has acquiesced in the court’s determination of the Legislature’s
    intent. 17 In Anderson v. A & R Ag Spraying & Trucking, this
    court considered the Part 13 definition of fair value as guid-
    ance in valuing a corporation in an elect-to-purchase action
    brought under Part 14. 18 The Legislature has made no amend-
    ment since that time which would have precluded the applica-
    tion of the Part 13 definition to actions brought under Part 14,
    and so we will presume that the Legislature has acquiesced
    in our determination of the Legislature’s intent in this matter.
    Until the Legislature amends the NMBCA or indicates a con-
    trary intent, we will continue to apply the fair value definition
    in Part 13 to actions brought under Part 14, in its entirety and
    as written.
    Second, even if we, for the sake of argument, consider the
    commentary provided by the Model Business Corporation Act,
    in the 2013 version, as well as the 2016 and 2020 versions, it
    indicates that discounts for lack of marketability or minority
    status are inappropriate in most appraisal actions, because such
    discounts “give the majority the opportunity to take advantage
    of minority shareholders who have been forced against their
    will to accept the appraisal-triggering transaction.” 19
    Applying that rationale to this case, the result would be
    similar: Bohac and the rest of the other devisees of the Estate
    have been forced to accept BSC’s election to purchase even
    though Bohac sought the dissolution of the entire corpora-
    tion. Discounts such as those sought by BSC are inappropriate
    17
    Estate of Schluntz v. Lower Republican NRD, 
    300 Neb. 582
    , 
    915 N.W.2d 427
     (2018).
    18
    Anderson v. A & R Ag Spraying & Trucking, 
    supra note 1
    .
    19
    3 Model Business Corporation Act Ann., supra note 9.
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    where, as here, BSC was able to force Bohac and the other
    minority shareholders to accept this transaction and thus held a
    distinct advantage over them.
    Finally, the commentary in § 13.01 of the Model Business
    Corporation Act mentions only that a minority discount may
    be appropriate under § 14.34 of the act, but does not mention
    discounts for lack of marketability or otherwise indicate that
    such a discount may be applicable to actions under § 14.34.
    And § 14.34 also expressly mentions only a minority discount.
    We decline to assume that lack of marketability discounts
    are applicable to actions brought under § 14.34, where not
    envisioned in the language of that section. Contrary to BSC’s
    contentions, the Model Business Corporation Act official com-
    mentary does not make clear that discounts are applicable and
    appropriate in this case. Rather, that commentary indicates that
    all discounts for lack of marketability should be excluded and
    that only minority discounts should be considered.
    (iii) Oppression Need Not be Proved to
    Justify Exclusion of Discounts
    The trial court, in determining the applicability of discounts,
    stated that this action was “not analogous to a dissenting
    sharehold[er] exercising appraisal rights because this is not a
    case involving wrongful conduct by majority shareholders or
    minority shareholder oppression” and that
    given the totality of evidence before the Court, the Court
    cannot find that the majority shareholders engaged in
    wrongful conduct or oppression of the minority share-
    holders based on this limited testimony. Furthermore,
    the context of this action is one brought by the minor-
    ity shareholder seeking to be bought out for distribution
    of the value of shares within the Estate. Therefore, the
    application of discounts must be determined based on
    equitable principles.
    This is an inaccurate representation of this case. Bohac
    did allege wrongful and oppressive conduct by the majority
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    shareholders when she, on behalf of the Estate, filed a petition
    for dissolution of BSC. It was BSC that exercised its right to
    elect to purchase in lieu of dissolution, which compelled the
    Estate to sell its interest in the company.
    That there was “limited testimony” on oppression, as indi-
    cated by the trial court, is expected. As agreed by both par-
    ties, the sole issue tried to the court was the determination of
    “‘fair value’ of [Bohac’s] 14.84% stock interest in [BSC] as
    of September 19, 2018,” under § 21-2,201(d). It is misleading
    to say the action was “brought by the minority shareholder
    seeking to be bought out,” when Bohac actually sought dis-
    solution and alleged oppression from the beginning. It is
    unsurprising that such evidence was not presented in further
    detail at trial because the issue of oppression was not tried to
    the court at all.
    [8] Further, dissenter’s rights statutes in many jurisdictions
    do not require the minority to prove that the majority has
    engaged in blameworthy conduct in order to receive protec-
    tions. In appraisal cases, for example, a dissenting minority
    shareholder’s right to a fair value appraisal can be triggered
    merely by the majority’s benign decision to engage in a merger
    or some other corporate transaction. 20 Minority shareholders
    in these cases are protected from discounts for lack of market-
    ability or minority status, not because there has been fault but
    simply to protect the vulnerability of the dissenter. 21
    Even if we were to assume that the Legislature did not
    intend for us to apply Part 13’s definitions, including the
    20
    Moll, supra note 14.
    21
    See, e.g., Pueblo Bancorporation v. Lindoe, Inc., 
    63 P.3d 353
    , 364 (Colo.
    2003) (adopting enterprise value approach to fair value and noting that
    such interpretation is “clear majority view” in appraisal cases); Lawson
    Mardon Wheaton, Inc. v. Smith, 
    160 N.J. 383
    , 401, 
    734 A.2d 738
    ,
    748 (1999) (“equitable considerations have led the majority of states
    and commentators to conclude that marketability and minority discounts
    should not be applied when determining the fair value of dissenting
    shareholders’ stock in an appraisal action”).
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    specific exclusion of discounts, to evaluate actions brought
    under Part 14, principles of equity would still require us to
    prevent application of discounts where the dissenter holds a
    minority interest and did not itself engage in oppressive, ille-
    gal, or fraudulent conduct. To find otherwise would encour-
    age majority oppression and would double-penalize minority
    interest holders who choose to exercise their rights to petition
    for dissolution when they feel the majority has engaged in
    oppressive conduct. We therefore conclude that neither dis-
    count shall apply.
    (c) Premise of Value
    We turn next to the determination of the premise of value to
    be applied in this case.
    [9,10] There are two premises of value that might apply to
    this type of action: “as a going concern” or “as if in liquida-
    tion.” A going concern premise of value is used in a fair value
    determination when the subject company is expected to con-
    tinue to operate into the future. A liquidation premise of value
    is used in a fair value determination when the business is not
    expected to continue, and it requires a determination of the net
    amount that would be realized if the business is terminated and
    the assets are sold piecemeal.
    Within the valuations provided by both experts, Janet
    Labenz and Matt Stadler, as well as within the determination
    by the district court, the selection as to premise of value was
    inter­mingled with a discussion of the selection of valuation
    methodologies (explained in more detail below). The premise
    of value in this case was clearly as a going concern. Majority
    stock­holders of BSC repeatedly indicated that they planned
    to continue the company into the future and had no plans to
    dissolve the company for any reason. BSC filed an election
    to purchase the Estate’s shares in lieu of dissolution so that
    it could continue business. The going concern premise must
    therefore be applied to this valuation.
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    (d) Valuation Methodology
    Having identified the standard and premise, this court also
    must select a methodology before a final valuation can be
    calculated. In its assignment of error on cross-appeal, BSC
    assigns that the district court erred in applying the asset-based
    approach over the income-based approach.
    [11,12] There are three methods to value shares of a com-
    pany: the asset-based approach, the income approach, and the
    market approach. According to Stadler, the expert for Bohac,
    the asset-based approach is “[a] general way of determining a
    value indication of a business’s assets and/or equity using one
    or more methods based directly on the value of the assets of
    the business less liabilities.” Under the asset-based approach,
    each asset is assigned a fair market value based on its worth if
    the entity were sold on an asset-by-asset basis. Liabilities are
    deducted from the total value of assets to arrive at the fair mar-
    ket value of the business. The asset-based approach is gener-
    ally applied when valuing a business whose operations require
    significant investment in fixed assets.
    [13] Stadler explained that the income approach is “[a]
    general way of determining a value indication of a business’s
    assets and/or equity using one or more methods wherein a
    value is determined by converting anticipated benefits.” This
    approach is based on the future, projected cashflow of a com-
    pany, rather than the assets. It assumes an investor could choose
    to invest in the company or in a business with similar invest-
    ment characteristics, and considers historical data to ­project
    future cashflow.
    [14] Stadler further explained that the market approach is
    “[a] general way of determining a value indication of a busi-
    ness’s assets and/or equity using one or more methods that
    compares the subject to similar investments that have been
    sold.” At trial, the expert opinions provided by both parties
    agreed that the market approach was inapplicable, because
    there were insufficient comparable corporations or prior sales
    that could be used to draw a comparison. This leaves us with a
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    choice of either the asset- or income-based approaches or some
    combination of the two.
    Bohac argues that the principal of “highest and best use”
    requires application of the asset approach, because the asset-
    based approach yielded a higher valuation amount from both
    experts at trial. BSC argues that this understanding of the
    principle of highest and best use is misplaced and artificially
    inflates the value of BSC. BSC cites New York case law that
    “rejected application of the higher valuation because it did not
    account for the reality of the underlying situation of the corpo-
    ration and required presumptions not based on actual facts.” 22
    Labenz, the expert for BSC, stated in her report that under
    the principle of highest and best use, “the value of a company
    is deemed to be the higher of the two values determined under
    a going concern or a liquidation premise.” This would mean
    that under the highest and best use principle, where the higher
    value came from liquidation, the company must be treated “as
    if in liquidation.” However, this is inconsistent with the testi-
    mony of the parties that BSC will continue to operate into the
    future. And Labenz chose to continue her valuation based on
    the lower of the two numbers presented, $13,021,000 versus
    $18,043,000. As noted by the district court, Labenz “does not
    explain why the court should not adopt her conclusion with the
    higher value under the asset approach.”
    By contrast, Stadler, the expert for Bohac, conducted a val­
    uation of BSC and the Estate’s interest using an asset approach
    and a going concern premise of value. This analysis takes into
    account the significant assets held by the company, as well
    as the company’s assertion that it will continue to operate
    into the future. Stadler explained the reason for discrepan-
    cies between his own report and that of Labenz, referring to a
    renowned valuation expert who posits that analysts will often
    “mistakenly confuse the use of asset based approach with a liq-
    uidated premise of value when it can, in fact, be used with all
    22
    Reply brief for appellee at 2.
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    premises of value including as a going concern.” Labenz had
    testified at trial that she agreed with the valuation expert, but
    “did not explain why she opted not to use the going concern as
    a premise of value herein under her asset approach analysis.”
    BSC has significant assets. The principle of highest and
    best use does not require that we apply a liquidation premise
    of value when such would be contrary to facts suggesting that
    the company was a going concern. Due to these many factors,
    the correct methodology to adopt for valuation of BSC is an
    asset approach.
    (e) Value Determinations
    At trial, the parties presented multiple witnesses and experts
    to testify about the assets held by BSC, including parts inven-
    tory and equipment. They also testified to the chemical rebates
    BSC receives on chemicals that are sold and the potential tax
    liabilities that BSC would incur under the asset or income
    approaches. As with the issues discussed above, this subissue
    continues as part of the overall determination of fair value of
    the Estate’s interest in BSC, and the standard of review is de
    novo with weight given to the trial court’s determinations of
    credibility. Because the trial court presided over this matter
    and observed witness and expert testimony, the trial court is
    best situated to make determinations regarding the credibility
    of valuations provided.
    (i) Equipment
    As to the value of equipment, a licensed auctioneer and
    certified appraiser testified regarding an appraisal that he con-
    ducted for the Estate, whereas BSC offered a valuation of
    equipment prepared by the general manager for BSC. BSC’s
    general manager also testified that he regularly priced equip-
    ment owned by BSC by using information listed by an online
    company that lists auction results for farm equipment.
    The trial court ultimately found the valuation of the auction-
    eer to be more credible than that of BSC’s general manager,
    noting that “[his] methodology involved multiple comparable
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    sales, he physically viewed the property to ascertain its condi-
    tion, he is an independent consultant, he holds a certification
    in appraisals, and he has significant experience in the valuation
    of such property.” We defer to the trial court’s determination of
    credibility and find that the value of equipment is $11,663,325,
    as valued by the auctioneer.
    (ii) Parts Inventory
    As to the value of the parts inventory held by BSC, Randy
    Koski testified for the Estate. Koski is a certified public
    accountant with a bachelor’s degree in business administra-
    tion with an accounting concentration, as well as a minor in
    economics. Koski testified to his experience in all accounting
    aspects for implement dealerships over the last 20 years.
    BSC offered testimony from Chris Benes, the president of
    BSC, as well as a valuation report he prepared based on “what
    a third party would pay for the parts.” Chris’ report did not use
    a method of valuing parts that included buy-backs by the man-
    ufacturer, even though the court “heard a great deal of evidence
    about the buy-back laws under 
    Neb. Rev. Stat. §87-706
     and
    707.” One of Leonard and Marlene’s daughters, who worked
    as the parts manager for BSC for almost 40 years also testified
    that “there would be parts on the inventory list that were not
    returnable to the manufacturer but were still saleable” but that
    these items were “‘very minute’” and were about 1 percent of
    the inventory.
    Ultimately, the trial court found that the valuation provided
    by Koski was more credible that that provided by Chris. The
    court noted:
    Koski’s methodology included values that are realized
    under the buy-back laws, taking into account that this
    is not a liquidation, so the 15 % restocking charge will
    actually not be incurred. Further, the valuation accounted
    for all saleable parts, and it does not exclude items that
    haven’t sold in the last two years, as those still hold a
    value. Further, he is an independent consultant and has
    significant experience in the valuation of such property.
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    We defer to the trial court’s determination of credibility and
    find that the value of parts inventory is $1,993,033, as valued
    by Koski.
    (iii) Chemical Rebate
    Next is a determination of value for the chemical rebate that
    BSC receives when chemicals are sold to BSC clients. Chris
    testified that the financial benefits of the rebate are never real-
    ized by BSC, because the rebates are passed on to customers
    through the pricing of the chemicals for sale. The trial court
    noted that “[t]here is not an accurate accounting before the
    Court to explain what percentage [BSC] discounts the chemi-
    cals in comparison to how much it receives from the rebate.”
    The court also noted that Chris had testified to an inventory
    kept by BSC regarding the rebate that uses a “fictitious number
    some percentage less than what was actually paid” and that,
    as aptly described by Chris, this was “‘lazy or poor account-
    ing.’” We again defer to the trial court’s determination of cred-
    ibility regarding testimony about the rebate and agree that the
    chemical rebate should be categorized as an account receivable
    by BSC.
    (iv) Tax Liabilities
    The last value determination to be addressed is the issue of
    tax liabilities.
    In schedule 10 of her appraisal of BSC, Labenz assigned an
    income tax liability of almost $6.6 million and assumed selling
    expenses of about $3.5 million. Conversely, Stadler’s appraisal
    recorded a deferred income tax on the sale of fixed assets for
    10 years based on the assessment that it is unlikely the assets
    will be sold in the next 10 years, if ever, and instead will be
    “passed down generationally.”
    The trial court found Stadler’s assessment of a potential
    tax liability to be more credible than that of Labenz, because
    Labenz’ report “assumes an immediate tax consequence dur-
    ing a liquidation” which will not be “realized by [BSC] since
    the Company will continue to operate rather than dissolve.”
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    We again defer to the trial court’s determination of cred-
    ibility, where it accepted Stadler’s determination of potential
    tax liability.
    (f) Final Fair Value Calculation
    Based on the above material, we conclude that BSC should
    be valued according to the fair value standard laid out at
    § 21-2,171(3). Moreover, we find that neither minority nor lack
    of marketability discounts is applicable. Further, BSC must be
    valued based on a going concern premise of value, using the
    asset-based approach for methodology. As a result, we reverse,
    and remand this issue to the district court, with directions to
    recalculate the fair value of BSC and the Estate’s 14.84 percent
    interest in accordance with this opinion.
    2. Bohac’s Claim for Reimbursement
    of “Expenses”
    In her third assignment of error, Bohac asserts that the district
    court erred in failing to find that Bohac had probable grounds
    for relief entitling the Estate to an award of expenses pursu-
    ant to § 21-2,201(e). Bohac claims that she is entitled to more
    than $30,000 for costs incurred, plus more than $87,849.33 in
    attorney fees and costs, under the authority of § 21-2,201(e)
    and our opinion in Detter v. Miracle Hills Animal Hosp. 23 Our
    disposition of this issue requires us to interpret § 21-2,201(e).
    That section provides:
    Upon determining the fair value of the shares, the court
    shall enter an order directing the purchase upon such
    terms and conditions as the court deems appropriate . .
    . . If the court finds that the petitioning shareholder had
    probable grounds for relief under subdivision (a)(2)(i)(B)
    or (D) of section 21-2,197, it may award expenses to the
    petitioning shareholder. 24
    23
    See Detter v. Miracle Hills Animal Hosp., 
    269 Neb. 164
    , 
    691 N.W.2d 107
    (2005).
    24
    § 21-2,201(e) (emphasis supplied).
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    In interpreting the language of the statute itself, we are required
    to reach an independent, correct conclusion irrespective of the
    determination made by the court below. However, in review-
    ing the contents of an award made pursuant to the statute, our
    review will be for an abuse of discretion.
    Bohac argues that because § 21-2,201(e) uses the term
    “expenses,” the statute permits “not only costs and expert
    expenses but also attorneys’ fees.” 25 Bohac refers to Detter,
    where we held that reasonable attorney fees and expenses
    were recoverable in an election to purchase in lieu of dissolu-
    tion action, provided that the petitioner could show that the
    respond­ent’s conduct was illegal, oppressive, or fraudulent in
    its form or that the corporate assets were being misapplied
    or wasted. 26
    However, Bohac’s argument is flawed. Detter interprets
    § 21-20,166, the predecessor statute to § 21-2,201. Under
    that language, a court was specifically permitted to “award
    to the petitioning shareholder reasonable attorney’s fees and
    expenses and fees and expenses of any experts employed by
    him or her,” 27 if the court found that a petitioning shareholder
    had probable grounds for relief from oppressive or wrong-
    ful conduct. But § 21-20,166 was repealed and replaced with
    § 21-2,201 in 2014 and no longer includes the language from
    Detter which Bohac relies upon. This change was made pursu-
    ant to the adoption of the NMBCA, and this language is still
    in force today. 28
    [15] The intent of the Legislature is expressed by omission
    as well as by inclusion. 29 We cannot ignore that the Legislature
    specifically removed reference to attorney fees when it adopted
    the NMBCA and repealed and replaced § 21-20,166 with
    25
    Brief for appellant at 38.
    26
    Detter v. Miracle Hills Animal Hosp., 
    supra note 23
    .
    27
    § 21-20,166(5)(b) (Reissue 2012).
    28
    § 21-2,201.
    29
    In re Estate of Hutton, 
    306 Neb. 579
    , 
    946 N.W.2d 669
     (2020).
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    § 21-2,201. Upon our de novo review of this statutory lan-
    guage, we find that Bohac is not entitled to an award of attor-
    ney fees.
    We note that, while Bohac is not entitled to attorney fees,
    under certain circumstances, a litigant in her position might
    be entitled to an award of other expenses. In order to recover
    expenses under § 21-2,201, the court must find that Bohac, as
    the petitioning shareholder, had probable grounds for relief. If
    such grounds for relief exist, the court “may” award expenses to
    the petitioning shareholder. But we find that the district court’s
    denial of such expenses was not an abuse of discretion.
    The record shows that the trial court had opportunity to hear
    testimony and review evidence presented by Bohac regard-
    ing alleged misconduct by the majority shareholders. While
    Bohac detailed this alleged oppression at length, the record
    also indicates that there are potentially innocent intentions
    behind each event. After hearing testimony, observing the wit-
    nesses, and reviewing other evidence presented at trial, the
    trial court accepted one version of the facts over another. We
    find no evidence that the court abused its discretion on this
    determination.
    3. Court-Ordered Payment of Judgment
    In her fourth and fifth assignments of error, Bohac asserts
    that the district court erred in failing to award interest starting
    on September 19, 2018, pursuant to § 21-2,201(e), and granting
    BSC 5 years to make annual, interest-free payments.
    Section 21-2,201(e) provides that the court, in setting terms
    of purchase, may include both installment payments and inter-
    est, but that neither is required. The court, having conducted
    the bench trial and presided over the case for an extended
    period of time, was in the best position to determine the appro-
    priate terms and conditions of payment. 30 We find no abuse of
    discretion in the trial court’s determination of payment terms.
    30
    See Wayne L. Ryan Revocable Trust v. Ryan, 
    supra note 4
    .
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    While we find no abuse of discretion, we recognize that
    the current payment terms reflect the district court’s fair value
    determination; because we have instructed the court to recal-
    culate the fair value of BSC in accordance with this opinion,
    these payment terms may need to change based on the needs
    and abilities of both parties. Accordingly, we vacate the judg-
    ment amount, including the determination of terms and condi-
    tions, and direct that after performing the fair value calculation
    required by this opinion and based upon the existing record,
    the district court shall determine the terms and conditions of
    the purchase, which may include payment of the purchase price
    in installments, with or without interest, as the court deems
    appropriate in light of the recalculated purchase price.
    VI. CONCLUSION
    We conclude that the district court erred in its determination
    of the fair value of BSC, both because it did not use the cor-
    rect definition and because it subjected the Estate’s shares to
    discounts. As such, we vacate the award, and we reverse and
    remand with directions for further proceedings consistent with
    this opinion. However, we affirm the district court’s denial of
    attorney fees and other expenses.
    Affirmed in part, vacated in part, and in part
    reversed and remanded with directions.
    Heavican, C.J., and Stacy, J., not participating.