Wiles Bros., Inc. (WBI) is a Nebraska-based farming corporation that was formed in 1978. Bruce, Marvin, and their brother Glenn Wiles, as well as their father, were the directors of WBI at all relevant times. The three brothers were also officers of WBI at all relevant times. Prior to 1999, members of the Wiles family, including Bruce, owned shares of WBI stock. 

In February 2012, Bruce and his wife, Annette Wiles, filed a complaint against WBI and Marvin for judicial dissolution. The plaintiffs alleged that a majority of WBI directors were acting, or would act in a manner illegal, fraudulent, or oppressive, among other things. WBI and Marvin moved to dismiss the case, arguing that Bruce and Annette lacked the standing to seek judicial dissolution because they were not shareholders. Bruce and Annette generally argued that the district court should adopt a “substance over form” approach, urging the court to determine that WE was merely a shell used for estate purposes and that the original owners of the WBI stock were “beneficial owners” of WBI shares. The district court rejected Bruce and Annette’s argument and they appealed the ruling. 

The appeals court ruled against Bruce and Annette. What was its reasoning to do so? According to the court, what circumstances must be true for Bruce and Annette to be considered shareholders in this case? The court stated that “[i]t has been widely observed that courts are reluctant to apply the drastic remedy of statutory dissolution, especially in proceedings by a shareholder.” Consider the WPH process of decision making and hypothesize why this might be the case.