2012-061, Carleton, LLC v. Richard Balagur & a; Carleton, LLC v. Richard Balagur; Richard Balagur v. Bukk Carleton

Carleton, LLC appeals from an order of the Superior Court This is the fourth time this case has come before us. A detailed account

to enforce creditor status. We affirm. Balagur.

previous cases). We recite only those facts pertinent to this appeal.

Carleton, LLC v. Balagur, 162 N.H. 501, 503-04 (2011) (citing

filed by MTS Development Corporation (MTS) and denying its renewed motion

, J.) denying its motion to vacate and set aside articles of dissolution

and orally), for MTS Development Corporation, Richard Balagur, and Adrienne Vitt & Associates PLC on the brief be altered or vacated. p. 3 establishing Carleton, LLC as a secured creditor is a final order that could not could not have voided the order. It further contends that the court’s order

was not issued pursuant to RSA 293-A:14.34(e) and, thus, RSA 293-A:14.34(g)

It maintains that the court’s order making Carleton, LLC a secured creditor A:14.34(g) as a basis for denying its renewed motion to enforce creditor status. Carleton, LLC first argues that the trial court erred in utilizing RSA 293-

shares of MTS. We address each argument in turn. Balagur is estopped from avoiding her election to purchase Carleton, LLC’s balance the competing interests of the parties. It further asserts that Adrienne

the ‘principles of fair play’ embodied in RSA 293-A:14.34” and in failing to

an equitable proceeding and, as such, the trial court erred in failing “to enforce

Carleton, LLC a secured creditor. It also contends that corporate dissolution is application of RSA 293-A:14.34 and in failing to enforce its order making On appeal, Carleton, LLC contends that the trial court erred in its

appeal followed. 293-A:14.34(g).” Carleton, LLC’s motion to reconsider was denied, and this RSA 293-A:14.34(e),” and that it was “constrained by the application of RSA

status, finding “that the provisions of RSA 293-A:14.34(g) void the provisions of

A:14.34(g) addresses the terms

The court further denied Carleton, LLC’s renewed motion to enforce creditor should occur and ordered “a full accounting of the books and records of MTS.” The trial court denied the motion; however, it agreed that an accounting

3 renewed motion to enforce its creditor status, arguing that “[w]hile RSA 293-

motion for an accounting of all income and expenses of MTS. It further filed a validly authorize the later filed articles of dissolution. Carleton, LLC also filed a Carleton, LLC’s shares was irrevocable and that the shareholders could not

unaffected by [MTS and the Balagurs’] attempt to dissolve MTS.”

dissolution filed by MTS, arguing that Adrienne Balagur’s election to purchase

the notice of intention to adopt articles of dissolution was timely filed. See on “fair value” and on creditor status are now the law of the case and “remain the court’s fair value determination.” It maintained that the trial court’s order

Subsequently, Carleton, LLC moved to vacate and set aside the articles of

at 502.

162 N.H. at 504. In September 2011, we affirmed the trial court’s finding that the notice was not timely filed under RSA 293-A:14.34(g). See Carleton, LLC,

RSA 293-A:14.34(g). Carleton, LLC objected, asserting that

On June 7, 2010, MTS filed a notice of intention to adopt articles of accordance with the provisions of RSA 293-A:14.05 through 293-

p. 4 articles of dissolution, the corporation shall be dissolved in

adopted and filed within 50 days thereafter. Upon filing of such A:14.02 and RSA 293-A:14.03, which articles shall then be intention to adopt articles of dissolution pursuant to RSA 293-

that time the corporation files with the court a notice of its

within 10 days after the date the order becomes final, unless before The purchase ordered pursuant to subsection (e), shall be made

RSA 293-A:14.34(f). RSA 293-A:14.34(g) then provides that:

same manner as any other judgment. him by the order of the court which shall be enforceable in the

corporation, except the right to receive the amounts awarded to

longer have any rights or status as a shareholder of the

under RSA 293-A:14.30, and the petitioning shareholder shall no the court shall dismiss the petition to dissolve the corporation

under RSA 293-A:14.34(e),

deems appropriate . . . .” RSA 293-A:14.34(e). Once the court enters an order order directing the purchase upon such terms and conditions as the court “Upon determining the fair value of the shares, the court shall enter an

shares.” RSA 293-A:14.34(d). the dissolution proceedings and “determine the fair value of the petitioner’s parties fail to reach an agreement, either party may petition the court to stay

conditions agreed to by the parties.” RSA 293-A:14.34(c). If, however, the

order directing the purchase of petitioner’s shares upon the terms and

4

and terms of purchase of the petitioner’s shares,” and “the court shall enter an is filed, the parties have sixty days to “reach [an] agreement as to the fair value shareholder who has petitioned for dissolution. Once an election to purchase

corporation or other shareholders elect to purchase all of the shares of a

to incorporate in the statute. Id

ascribe the plain and ordinary meanings to the words used. Id

interpretation is de considered as a whole, and our review of the trial court’s statutory RSA 293-A:14.34 governs the procedure to be followed when a

of the overall statutory scheme and not in isolation. Id.

legislature might have said or add language that the legislature did not see fit further indication of legislative intent, and we refuse to consider what the statute’s language is plain and unambiguous, we need not look beyond it for

(2006). We first examine the language of the statute, and, where possible, we

the final arbiter of the legislature’s intent regarding the meaning of a statute Resolving this issue requires us to interpret RSA 293-A:14.34. We are p. 5 Id

rata share of any liquidating distribution to shareholders. petitioner resumes shareholder status and will be entitled to a pro force or effect.” Accordingly, subsection (f) no longer applies, the

(g) provides that the order under subsection (e) is “no longer of any

Model Bus. Corp. Act Annotated entitled to a pro rata share of any liquidating distribution to shareholders.”

LLC’s shares, no longer had any force or effect. See 14.02. Once articles of dissolution are filed, however, subsection to vote on a proposal to adopt articles of dissolution under section of subsection (f), the petitioning shareholder would not be entitled as a secured creditor of MTS was issued prior to the order dictating the terms While Carleton, LLC is correct that the trial court’s order establishing it

longer applied and Carleton, LLC “resume[d] shareholder status and will be

5 A:14.34(e), directing the terms and conditions of the purchase of Carleton,

shares as determined by the court under subsection (e). By virtue

no longer have any rights or status as a shareholder of the corporation,” no Moreover, RSA 293-A:14.34(f), providing that “the petitioning shareholder shall

were filed under RSA 293-A:14.34(g), the trial court’s order under RSA 293- Applying this interpretation to this case, once the articles of dissolution distributed to shareholders without reference to the “value” of the . at 14-173. receive his or her pro rata share of the liquidating proceeds If the corporation elects to dissolve, the petitioning shareholder will

(e).” Model Bus. Corp. Act Annotated alternative of voluntary dissolution after entry of an order under subsection to any party under the laws of the local jurisdiction, subsection (g) affords the

Model Business Corporation Act, see Since our election statute is nearly identical to the like provision in the

(Emphasis added.) comment explains, in relevant part, that: previously asserted on behalf of the corporation. § 14.34 cmt. 4D, at 14-172. The

One comment states that, “[i]n addition to the usual rights of appeal available on the intended meaning of the election statute.” Bendetson, 154 N.H. at 643. (4th ed. 2011), “we look to the official comments of the model act for guidance

(e) and the petitioner may continue to pursue any claims accordance with the provisions of the last sentence of subsection the petitioning shareholder reasonable fees and expenses in longer be of any force or effect, except that the court may award A:14.07 and the order entered pursuant to subsection (e) shall no p. 6 RSA 293-A:14.34 and as recognized . . . in Bendetson dissolution process without further order of the court.” Fierro v. Templeton interests of the parties” and “enforce[d] the ‘principles of fair play’ embodied in proceeding and, thus, the court should have “balance[d] the competing

time automatically nullifies the order [under subsection (e)] and triggers the question that the filing of an intention to adopt articles of dissolution at that trial court’s authority to issue equitable orders in a judicial dissolution (g), along with the comments to the Model Business Corporation Act, leaves “no

requires. Id

this particular case.” It contends that RSA 293-A:14.34 does not constrain the subsection. On the contrary, as discussed above, the language in subsection

6

857 So. 2d 931, 933 (Fla. Dist. Ct. App. 2003) (analyzing nearly identical

rendered moot because, in the absence of Adrienne Balagur’s election to granting creditor status to secure Carleton, LLC’s payment of shares was exercise its “inherent equitable authority . . . to address the circumstances of authority once articles of dissolution have been filed pursuant to that case. Bendetson election to purchase, id Carleton, LLC next argues that the trial court erred when it failed to., the language in subsection (g) does not grant such expressly allows the trial court to utilize its equitable authority to set aside an Carleton, LLC’s motion to enforce creditor status. a different conclusion. Unlike the language in RSA 293-A:14.34(a), which In Bendetson An examination of the language of RSA 293-A:14.34(g), however, requires

. at 646.

We concluded that RSA 293-A:14.34(a) renders the electing party’s right fair play in situations that are often rife with tension and ill-will. Id. at 645. and (b) indicates that it intended to empower the court to enforce principles of dissolve pursuant to RSA 293-A:14.34(g). It follows, therefore, that the order explicit reference to the court’s equitable powers in both RSA 293-A:14.34(a)

, 154 N.H. at 643-45. We reasoned that the legislature’s

expressly allowed for the trial court to consider the equities in a particular 293-A:14.34(a) and held that, with respect to subsection (a), the legislature order of the bankruptcy court). Therefore, the trial court did not err by denying, we analyzed the election irrevocability provision in RSA moot because the company was ultimately sold by the trustee pursuant to an division had jurisdiction to order the sale of the respondent’s company was.”

longer sought to acquire Carleton, LLC’s shares; instead, MTS elected to A:14.34(f) as the authority for its initial order. Here, Adrienne Balagur no in lieu of dissolution; indeed, the trial court specifically relied upon RSA 293-

159 N.H. 615, 624 (2010) (concluding that the issue of whether the family

relation to, and resulting from, Adrienne Balagur’s election to purchase shares and conditions of purchase under RSA 293-A:14.34(e), the order was issued in petitioner in the section 14.34 proceedings or otherwise. p. 7 the derivative claims ha[ve] been previously asserted by the pursue derivative claims on behalf of the corporation, provided that

petitioner under subsection (e) or the petitioner’s standing to

does not affect either the court’s award of expenses to the subsection (g) . . . provides that the filing of articles of dissolution [t]o prevent use of voluntary dissolution to evade responsibilities,

in the Model Business Corporation Act, claims previously asserted on behalf of the corporation.” Indeed as explained sentence of subsection (e) and the petitioner may continue to pursue any

reasonable fees and expenses in accordance with the provisions of the last shares.” Id

7

over judicial dissolution as a remedy.” Bendetson

expressly provides “that the court may award the petitioning shareholder dissatisfied with the determined fair value of the petitioning shareholder’s

have an interest in the continuation of the business, “election is often favored

However, in one case, Jones v. Pfaff there is a paucity of authority addressing the subsection at issue in this case. may, in some instances, be unfair to a petitioning shareholder, the statute have modeled their election statute on the Model Business Corporation Act, dissolution, either because he intended to do so all along or because he was sought under subsection (g). Although many states, including New Hampshire, We do note, however, that while the application of RSA 293-A:14.34(g)

City of Manchester, 150 N.H. 69, 73 (2003). and we will not rewrite it; that is the province of the legislature. See Balke v. omitted). statute. Jones Nonetheless, we are constrained by the clear language of the statute

dissolution’s adverse effects on shareholders, employees, and others who may expressed by Judge Morris. As we acknowledged in Bendetson, to avoid

. at 888 (Morris, J. concurring specially). We share the concerns

the shares but then later filing the notice of intention to adopt articles of trial court of authority to consider the equities when voluntary dissolution is shareholder to avoid dissolution “simply by asserting his intention to purchase We recognize the legitimacy of the concerns associated with depriving the observed, the language in the subsection at issue allows a fifty percent subsection (g), it could have expressly done so, as it did in subsection (a)., 77 So. 3d at 885-86 (Morris, J., concurring specially). As he concern with the language” of the similar election subsection in Florida’s the Florida District Court of Appeals specially concurred to “express [his] where the underlying facts were markedly similar to this case, Judge Morris of

intended to grant the court equitable authority to set aside dissolution under subsection in Florida’s election to purchase statute). Had the legislature p. 8 A f f i r m e d

8 asserting judicial estoppel. conclude that Carleton, LLC cannot avoid application of RSA 293-A:14.34(g) by

equitable estoppel cannot be used to circumvent the dissolution. See

a statute.” Appeal of Alexander

intent that the statute is mandatory.”). For these reasons, we similarly

that it “shall be dissolved.” Thus, under the plain language of the statute, DALIANIS, C.J., and HICKS, CONBOY and LYNN, JJ., concurred.

disagree. “A party may not assert equitable estoppel to avoid the application of and judicially estopped from avoiding her purchase of Carleton’s shares.” We generally regarded as a command . . . [and] is significant as indicating the Finally, Carleton, LLC argues that “Adrienne Balagur is both equitably McCarthy v. Wheeler, 152 N.H. 643, 645 (2005) (“[U]se of the word ‘shall’ is in Carleton, LLC’s brief. See We decline to address this argument, however, because it is not fully developed corporation where the court held no hearing or took any evidence on the issue.” above, once MTS filed the articles of dissolution, RSA 293-A:14.34(g) provides representations contrary to the statute was unreasonable). As discussed that petitioner’s estoppel claim failed because her reliance upon brackets omitted); cf. Petition of Perkins, 147 N.H. 652, 655-56 (2002) (finding pro rata share of any liquidating distribution to shareholders.” Id, 163 N.H. 397, 409 (2012) (quotation and

[MTS and the Balagurs] followed appropriate procedures for dissolving the Carleton, LLC further contends that the trial court “err[ed] in finding that

the articles of dissolution are filed, the petitioning shareholder is “entitled to a Model Bus. Corp. Act Annotated § 14.34 cmt. 4D, at 14-173. Moreover, once