Estate of Arthur G. Scanlan, Deceased, Ruth B. Scanlan, Administratrix - Page 18

                                           - 18 -                                            
          investments.”  But neither the 1989 report nor the 1991 report                     
          explains the dramatically higher net income (after taxes) for                      
          years after 1988, as compared to years before.  Sixth, the 1991                    
          report refers to the financial data of publicly traded companies,                  
          nominally in similar lines of business, yet never explains how                     
          those companies were selected, or in what respects the lines of                    
          business were similar to Eatel's.12  Although Mr. Chaffe                           
          testified at trial that the publicly traded companies in the 1989                  
          report were “essentially the same“ as the companies used for the                   
          1991 report, he also testified that these companies may have                       
          changed from 1989 “through merger acquisition or something like                    
          that.”                                                                             
                The 1991 report states that the shares of Eatel are not                      
          marketable, yet fails to explain sufficiently why this is so.                      
          Mr. Chaffe testified at trial that “There are very rare                            
          exceptions when there is any willing buyer at all at any price                     
          for minority shares of a nonpublicly-traded company”.  This                        
          testimony is unsupported by the record, unpersuasive by itself,                    
          and implausible.  We find that the shares were marketable.  As a                   
          point of fact, the 1989 report notes that some shares of DATA                      

                12 In this regard, we give little weight to the conclusions                  
          of Mr. Chaffe that:  (1) The price-earnings multiples of                           
          comparable publicly traded telecommunications corporations                         
          increased by more than 50 percent between the date of Decedent’s                   
          death and March 1993, and (2) the premiums paid in 1993 for the                    
          stock of publicly traded telecommunications corporations were                      
          more than 52 percent above the prices at which minority blocks                     
          were then trading.                                                                 




Page:  Previous  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  Next

Last modified: May 25, 2011