Estate of James Barudin, Deceased, Muriel B. Clarke, Executrix - Page 21

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          demand a significant discount to account for that fact.  Market             
          studies admitted into evidence indicate that appropriate lack-of-           
          marketability discounts often fall in a range of 25.8 to 45                 
          percent.  Certainly, the consistent history of significant cash             
          distributions and the history of quality management of the FC               
          Partnership would make the partnership an attractive investment.            
          There still existed, however, no public market in which to sell             
          ownership units in the FC Partnership, and transfer of a unit               
          would be subject to the approval of Mr. Silver, as owner of the             
          controlling units of the FC Partnership.                                    
               Because the FC Partnership was well managed and made                   
          consistent and significant annual cash distributions, we conclude           
          that the appropriate discount to use in this case to reflect lack           
          of marketability of decedent's ownership unit in the FC                     
          Partnership equals 26 percent.                                              
               We disagree with petitioner's expert's conclusion that a               
          67.5-percent combined discount rate should apply.  The record               
          does not contain sufficient facts with regard to the July 1989              
          sale to Mr. Silver of a fractional interest in one ownership unit           
          in the FC Partnership to justify petitioner's expert's reliance             
          thereon.                                                                    
               After considering all of the facts and circumstances and               
          the evidence presented at trial, we conclude that the appropriate           
          combined discount rate to use in this case for minority interest            
          and lack of marketability equals 45 percent (19-percent discount            




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