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that FiberComm's Oregon rural statistical area number three
cellular telephone business, "free and clear of any
encumbrances", was worth $12,039,000, as of March 31, 1991. The
other appraisal report concluded that the Washington rural
statistical area number eight cellular telephone business, "free
and clear of any encumbrances", was worth $8,253,000, as of March
31, 1991.
These inflated valuations were based on revenue projections
of the mean annual revenue produced by certain other cellular
telephone businesses and were not based on revenue projections of
the subject cellular telephone businesses' expected future
financial operating results. The appraisal reports failed to
elaborate specifically with respect to exactly how comparable
these other cellular telephone businesses were to the subject
businesses.4 As indicated above, the subject businesses'
cellular telephone systems still required further extensive
4Each of the appraisal reports stated, in pertinent part:
The subscriber and financial projections presented
in this report and used to value * * * [the subject
cellular telephone business] are intended to reflect
mean expectations in the marketplace. These
projections are based on information contained in
financial analyses of the industry and the expectations
implied by recent comparable sales. These assumptions
may differ from projections made for operational
purposes. The projections presented in this report
therefore include both the current industry results and
the significant upside potential of the industry.
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