NATHALIE TAFT ANDREWS et al.
SHEEPSCOT ISLAND COMPANY
Argued: March 3, 2016
Reporter of Decisions
Business and Consumer Docket docket number CV-2015-6
On the briefs:
Albert G. Ayre, Esq., and John A. Turcotte, Esq., Ainsworth, Thelin & Raftice, P.A., South Portland, for appellants Nathalie Taft Andrews et al.
Paul McDonald, Esq., and Eben M. Albert, Esq., Bernstein Shur, Portland, for appellee Sheepscot Island Company
At oral argument:
John A. Turcotte, Esq., for appellants Nathalie Taft Andrews et al.
Paul McDonald, Esq., for appellee Sheepscot Island Company
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
[¶1] After the shareholders of Sheepscot Island Company (SICO) approved a plan to convert from a for-profit corporation into a nonprofit corporation, several dissenting shareholders (collectively, the Tafts) sought declaratory and injunctive relief in the Business and Consumer Docket. The court (Murphy, J.) dismissed the Tafts' complaint pursuant to M.R. Civ. P. 12(b)(6), concluding that the Tafts could not make out a claim that SICO's conversion plan was invalid. The Tafts appeal, arguing that the court incorrectly applied the law governing corporations and nonprofit conversions. We disagree and affirm the judgment.
[¶2] The following facts, which we view as admitted for purposes of this appeal, are drawn from the Tafts' complaint and the documents attached to the complaint. See Nadeau v. Frydrych, 2014 ME 154, ¶ 5, 108 A.3d 1254; Moody v. State Liquor & Lottery Comm'n, 2004 ME 20, ¶¶ 6-11, 843 A.2d 43.
[¶3] SICO is a Maine corporation that was formed over one hundred years ago as a for-profit corporation. It owns land and facilities on MacMahan Island, which is located near the mouth of the Sheepscot River and is part of the town of Georgetown. There are forty cottages on MacMahan Island. A majority of SICO's shares is held by shareholders who own cottages on the island, but there are numerous shareholders who do not own cottages on the island, including four of the plaintiffs in this case. SICO issued only one class of shares, and its bylaws do not distinguish between cottage-owning shareholders and non-cottage-owning shareholders.
[¶4] SICO first attempted to convert into a nonprofit corporation in 2005. After a conversion plan was approved by a majority of shareholders, some dissenting shareholders, including three of the plaintiffs in this case, challenged the plan's validity. The Superior Court (Sagadahoc County, Warren, J.) entered a summary judgment in their favor, concluding that SICO's conversion plan did not comply with 13-C M.R.S.A. § 931(3)(B) (2005), which required such plans to "include . . . [t]he manner and basis of reclassifying" the corporation's shares.MacMahan Island Ass'n v. Andrews, ...