- 17 -
4.9 percent is appropriate.8 Respondent and respondent's expert
maintain that no blockage and/or SEC rule 144 discount is
warranted.
The parties and their experts agree that the Winn-Dixie stock
held by ADDI&C on the valuation date was subject to the volume
limitation on the sale of that stock prescribed by SEC rule
144(e)(1) (SEC rule 144(e)(1) volume limitation). That rule
limited the amount of restricted or other securities that could
have been sold by an affiliate during a given 3-month period
generally to the greater of (a) one percent of the shares of the
outstanding class of stock or (b) the average weekly reported
trading volume during the 4-week period preceding the filing of a
notice of proposed sale which was required under SEC rule 144(h).
The parties and their respective experts also are in agreement
that as of the valuation date there were two ways in which ADDI&C
could have disposed of its Winn-Dixie stock. One such method was
for ADDI&C to have sold its entire block of that stock in a
private placement to a nonaffiliated investor. Unless that block
of stock were registered, that investor would have been subject to
a 2-year holding period for that stock under SEC rule 144(d)(1)
and thereafter would have been subject for 1 year to the volume
8 In his rebuttal report, Mr. Howard modified the amount of the
blockage and/or SEC rule 144 discount that he believed should be
applied in determining as of the valuation date the fair market
value of ADDI&C's Winn-Dixie stock and its net asset value. Mr.
Howard made that change because of matters brought to his
attention after he had prepared his expert report. See infra
note 10.
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