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stock. None of this stock was registered with either the
Securities & Exchange Commission or the office of the Louisiana
Blue Sky Commissioner. None of this stock was publicly traded.
Eatel had approximately 30 shareholders on the Valuation
Dates. Most of its shares were owned by: (1) Decedent’s family
(Scanlan Family), who owned approximately 37.1 percent of Eatel’s
stock, (2) the Banker family, who owned approximately 35 percent
of Eatel’s stock, and (3) the King family, who owned
approximately 14 percent of Eatel’s stock.
On April 12, 1991, Administratrix gave six members of her
family a total of 10,667 shares of Eatel voting stock, which were
her separate property.4 Decedent “split” these gifts with
Administratrix for Federal gift tax purposes, see sec. 2513, and
a 1991 Form 709, United States Gift (and Generation-Skipping
Transfer) Tax Return, was filed on his behalf on or about
January 14, 1992. Decedent’s Form 709 reported each share’s
value at $34.84. This value was based on a valuation report
(1989 report) prepared by Chaffe & Associates, Inc. (C & A), an
investment banking firm in New Orleans, Louisiana, and signed on
November 15, 1989, by its founder and president, David Blackshear
Hamilton Chaffe III (Mr. Chaffe). The 1989 report reflected
C & A’s appraisal of DATA as of August 31, 1989, which was
performed to “establish the fair market value * * * of DATA in
4 At least one of these donees, namely, John D. Scanlan, was
already a shareholder of Eatel.
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