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fact specific and are relied on by litigants and courts for
generalized guidance, but they do not establish bright-line rules
for valuation; i.e., they do not establish specific percentage
discounts to be applied under particular factual circumstances.
The estate’s expert, Mr. Dorman, mentioned three different
approaches in valuing the common stock of Godfrey, to wit:
“Market Comparison Approach”, “Adjusted Net Book Value Approach”,
and “Capitalized Earnings Approach”.7 Although his report
contains some discussion of all three methods, ultimately, he
relied solely on the net asset approach.
Mr. Dorman rejected the market approach because he could not
find what he believed to be comparable companies. Of six
comparable companies, he noted that four, unlike Godfrey,
reported losses.8 The remaining two were rejected because he
“determined that using only the remaining two public companies,
Brunswick Corp. and Fountain Powerboat Ind., Inc., would not
provide reliable comparable data to arrive at a market measure of
value.” Mr. Dorman, even though he labeled the six companies
7 For convenience, we use “market approach”, “net asset
approach”, and “income approach” instead of “Market Comparison
Approach”, “Adjusted Net Book Value Approach”, and “Capitalized
Earnings Approach”, respectively.
8 We find Mr. Dorman’s reason for abandoning the comparable
or market approach to be somewhat curious because, in spite of
the “comparable companies” losses, respondent’s expert’s
calculations with similar comparables resulted in the potential
for values that were two to three times the value reached by use
of the approach advanced by Mr. Dorman.
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