Wally Findlay Galleries International, Inc. and Subsidiaries - Page 21

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          WFGI intended to retain the lease until these obstacles to                  
          marketability were removed, the potential value of the lease                
          under the more favorable conditions that were expected seems to             
          be the more appropriate measure for purposes of this case than              
          the amount that could be realized by assigning it at the end of             
          FY 1984.                                                                    
               The $250,000 estimate may well have been closer to the                 
          potential market value of the lease than its book value.  The               
          total amount that WFGI and a French individual paid for the lease           
          3 years later, translated into U.S. dollars at the exchange rate            
          prevailing at the end of FY 1984, was $307,653.3                            

               3 The lease for one-third of the premises was acquired by              
          WFGI at a cost of $253,461, or FF 1,556,251 at the current                  
          exchange rate on Sept. 30, 1987.  The lease for the other two-              
          thirds was assigned to a French individual for FF 1.3 million.              
          The total premium paid for the lease of the premises by both                
          parties was FF 2,856,251, which at the exchange rate prevailing             
          on Sept. 30, 1984 would equal $307,653.  WFGI acquired its lease            
          in two parts, one part from the French subsidiary and one part              
          from a company referred to in the stipulations as “Elysee                   
          Matignon (the real estate management company).”  This appears to            
          be the same company that the French subsidiary had sued to                  
          recover possession of space that had been appropriated for the              
          use of a restaurant.  If the space that WFGI paid this company to           
          acquire in the complicated multiparty transaction corresponded to           
          the portion of the original leasehold that was in dispute, or               
          other space exchanged for that portion in a settlement of the               
          dispute, then $307,653 may be an overstatement of the amount that           
          the French subsidiary could have expected to receive upon the               
          assignment of its lease at the end of FY 1984.  If the amount               
          that WFGI paid to Elysee Matignon is not taken into account,                
          however, the total lease premium would still amount to $243,026             
          at the Sept. 30, 1984 exchange rate.                                        

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