Northwestern Indiana Telephone Company - Page 31

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                  The shareholders of * * * [BMCT] and FiberComm are also                              
                  related to the majority shareholder of NITCO.  Because                               
                  the partners are all related entities, the assets                                    
                  contributed to the partnership were recorded at book                                 
                  value for financial reporting purposes.                                              
                  Contributed assets and liabilities at book value are                                 
                  summarized as follows:                                                               
            BMCT     FiberComm       NITCO                                                             
                                                                                                      
                  Cash                      $(834)       $25      $3,615,771                           
                  Other current assets    402,145        --           --                               
                  Cellular communica-   2,591,958      4,075          --                               
                  tions assets                                                                         
                  Licenses &            3,099,068     43,331          --                               
                  intangibles                                                                          
                  Current liabilities    (510,420)       --           --                               
                  Long-term debt       (6,382,521)   (12,093)        210,920                           
                  Net capital            (800,604)    35,338       3,826,691                           
                  contributions                                                                        
                                          * * * * * * *                                                
                  The limited partner has contributed certain equipment                                
                  for use by * * * [the BMCT limited partnership], the                                 
                  value of which has not been reflected in the assets or                               
                  capital accounts.  In addition, interest of $210,920                                 
                  was accrued on the note to the limited partner prior to                              
                  its conversion to a capital contribution.                                            

                  On June 9, 1994, shortly before the trial in the instant                             
            cases, NITCO's interest in the BMCT limited partnership was                                
            redeemed for about $3.6 million.                                                           
                  Although petitioners offered expert witness testimony at                             
            trial as to the value of the Oregon rural statistical area number                          
            three and Washington rural statistical area number eight cellular                          
            telephone businesses, as of March 31, 1991, their experts’                                 
            appraisal reports grossly inflated the actual value of these                               
            cellular telephone businesses.  One appraisal report concluded                             




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