The Arkansas Court of Appeals recently ruled on a divorce case involving the classification of restricted stock units (RSUs) awarded to one spouse. The case, Steven Cherney v. Danielle Cherney, No. CV-25-531, was decided on September 30, 2026. The court's decision affects how similar cases involving stock options and marital property may be handled in the future.
In this case, Steven Cherney appealed a ruling from the Pulaski County Circuit Court that classified certain RSUs awarded to his ex-wife, Danielle Cherney, as nonmarital property. The court's decision to affirm the lower court's ruling means that these stock units will not be divided between the parties in their divorce settlement.
Steven and Danielle Cherney were married in June 2016. Danielle filed for divorce in August 2024, and the couple had no children together. By the time of the final hearing, most of their property had been agreed upon, but the classification of Danielle's RSUs remained in dispute. Danielle testified that the RSUs were vested but could not be accessed until certain conditions were met, such as a liquidity event approved by her employer's board.
During the trial, Danielle explained that the RSUs would expire after seven years and that if she left her job, she would lose them. The only evidence presented to the court regarding the RSUs was her testimony and her W-2 forms, which showed their value in 2023 and 2024. The court noted that there were no documents regarding the terms of the RSUs introduced during the trial.
Judge Mike Murphy, who presided over the case, stated from the bench that the RSUs were a form of deferred compensation. He expressed concern that the RSUs were not truly vested, as they depended on several conditions that could prevent them from being realized. The court found that if Danielle were terminated from her job or faced another disqualifying event, she would not receive any proceeds from the RSUs. Consequently, the court ruled that the RSUs were not subject to division and would remain with Danielle.
On appeal, Steven argued that the RSUs should be classified as marital property since they were earned during the marriage, according to Arkansas Code Annotated section 9-12-315. The court noted that it reviews property division cases de novo, meaning it examines the case from the beginning without deferring to the lower court's findings. The court also stated that it would affirm the lower court's ruling unless it was clearly erroneous or against the preponderance of the evidence.
The court explained that, under Arkansas law, property acquired during a marriage is generally considered marital property. However, the court also emphasized that the classification of RSUs as marital property depends on the rights the earning spouse has to the property and when those rights can be exercised. The court referenced a previous case, Nauman v. Nauman, which involved a more complex situation with expert testimony regarding the vesting schedule of stock options.
In Nauman, the court found that some rights to the awards could not be diminished by the employer, meaning those interests were vested for marital property purposes. However, in the Cherney case, the court determined that the evidence was less developed, with no award agreements or plan documents presented. The court concluded that Danielle's interest in the RSUs was too speculative to be considered vested and subject to division.
The court stated, "On this record, we cannot say that the circuit court clearly erred in concluding that Danielle’s interest remained too contingent to constitute a vested property right subject to division." This ruling confirms that the classification of RSUs can vary depending on the specific circumstances of each case.
The impact of this ruling may extend beyond the Cherney case. It clarifies how courts may handle the classification of stock options and similar compensation in divorce proceedings, particularly when the rights to those stocks are contingent upon future events. This decision could influence future cases involving RSUs and other forms of deferred compensation.
Looking ahead, it remains to be seen whether Steven Cherney will seek further legal action, such as an appeal to the Arkansas Supreme Court. There are no indications of related cases pending at this time. The ruling serves as a reminder for individuals going through divorce to be aware of how different types of compensation may be classified and the potential implications for property division.