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provided respondent with a report (expert report). That expert
report is the subject of petitioner's motion to compel.
Petitioner was not informed of the contents or given a copy of
respondent's independent expert report.
Respondent then had another in-house valuation engineer
(second engineer) to value the films. The second engineer
provided an Engineering and Valuation Report (in-house report) on
the donated films. The second engineer, after physical
inspection of the films, found that approximately 50 percent of
the films had deteriorated due to oxidation of the celluloid.
According to the second engineer, the cost to return the damaged
films to usable condition would be at least $2,000 per film.
Given petitioner's claimed $1,000-per-film value, the second
engineer concluded that repair of the damaged films would not be
economically feasible and, thus, the damaged films had no value.
The second engineer recommended that respondent disallow the
value that petitioner assigned to the damaged films, and
therefore that petitioner's claimed $236,000 contribution
deduction be reduced by 50 percent to $118,000. The in-house
report also contained the opinion that a $1,000 value was an
acceptable fair market value for the films that were in good
physical condition. The second engineer's in-house report was
provided to petitioner.
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Last modified: May 25, 2011