Liquid Air Corporation and Subsidiaries - Page 10

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          1169, 1190 (1938), affd. per curiam 117 F.2d 1009 (2d Cir. 1941).           
          We see no reason to depart from that approach here.                         
               In the present case, the only appraisals of petitioner's               
          stock were made as of dates before the Contract date.  The                  
          parties to the Contract did not seek an appraisal of the stock as           
          of the date of the closing.  However, where experienced                     
          businessmen or women with adverse interests are negotiating at              
          arm's length, and they agree upon the value of property to be               
          exchanged, the agreement is very persuasive evidence of value.              
          Southern Natural Gas Co. v. United States, 188 Ct. Cl. at 358,              
          412 F.2d at 1251, 1255-1256; Seas Shipping Co. v. Commissioner,             
          371 F.2d 528, 532 (2d Cir. 1967), affg. T.C. Memo. 1965-240.                
               In the instant case, the parties do not dispute that the               
          Contract was the result of an arm's-length negotiation among                
          representatives of petitioner, Chemetron, and Allegheny.  The               
          Contract provided for a purchase price of 3,335,000 shares of               
          petitioner's common stock, which had been valued by the parties             
          at $60,030,000.  In addition, the Contract provided that certain            
          adjustments were to be made upon the closing of the transaction.            
          Pursuant to the adjustment provision, petitioner was entitled to            
          receive (i) 25 percent of the pre-tax earnings of the IGD from              
          January 1, 1978 to July 2, 1978, and (ii) 50 percent of the pre-            
          tax earnings of the IGD from July 3, 1978, to the day immediately           
          preceding the closing date.  Petitioner received a total of                 
          $3,081,584 in additional IGD assets pursuant to this provision.             

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