Estate of Ruth J. Casey, Deceased, First Interstate Bank of Nevada, Special Administrator - Page 11

                                       - 11 -                                         
          price, transformed their undivided interests into a “unity of               
          ownership” in the trustee.  That is not to say that a discount              
          should not be applied for some other reason, but it does preclude           
          a control discount.                                                         
               The Liquidating Trust was not a business entity, and it                
          should not be treated as a going concern.  The stated purpose of            
          the trust was to liquidate or sell the realty so that a willing             
          buyer would not be concerned about control, income, organization            
          of the enterprise, etc.  Instead, the buyer would be purchasing             
          the right to receive liquidation proceeds upon the property’s               
          sale.3                                                                      
               As a practical matter, the beneficiaries, by collectively              
          releasing their individual interests to the trustee, have                   
          obviated most of the traditional concerns underlying the                    
          application of a control discount.  A potential buyer of a                  
          partial interest would look to the underlying value of the assets           
          being liquidated.  Accordingly, we hold that no control discount            
          should be applied to this situation.                                        
               The marketability discount relates to the question of                  
          liquidity.  Petitioner and respondent have addressed the                    
          liquidity question in different ways.  Petitioner, following the            
          same approach as used for the control-discount question, treats             

               3 The parties did not argue that there was any limitation on           
          the sale or transfer of liquidation proceeds.  The parties agreed           
          that an interest in the Liquidating Trust could be transferred              
          with approval of at least 71 percent of the beneficiaries.                  




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011