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See May v. McGowan, 194 F.2d 396 (2d Cir. 1952); Lomb v. Sugden,
82 F.2d 166 (2d Cir. 1936); Wilson v. Bowers, 57 F.2d 682 (2d
Cir. 1932).
Respondent argues that the 1987 redemption agreement does
not establish the fair market value of decedent’s shares, and
that the fair market value is the value determined by
respondent’s expert witness, Henry Sherman (Sherman). Respondent
argues that the 1987 redemption agreement does not establish the
fair market value of decedent’s shares because: (1) The 1987
redemption agreement is not a binding contract under New York
law, (2) section 2703 requires that we disregard the 1987
redemption agreement, and (3) the price established by the 1987
redemption agreement cannot be trusted because the agreement is
simply a substitute for a testamentary device.
C. Approach of the Court
We disagree with respondent’s arguments that the 1987
redemption agreement is not binding or that section 2703 requires
that we disregard the agreement. We agree with respondent’s
argument, however, that the 1987 redemption agreement is a
substitute for a testamentary disposition designed to pass
decedent’s shares for less than full and adequate consideration.
We do not agree with respondent that the value of decedent’s
shares is the value determined by respondent’s expert. We have
found that the value of decedent’s shares on the alternate
valuation date was $4,000,000.
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