Estate of Thomas A. Fleming, Deceased, Cathy J. Hirt, Independent Successor Executrix - Page 10

                                       - 10 -                                         

          valuation date of the stock interest in question.                           
               In applying the transaction method, Mr. Bernstein examined             
          the precedent transactions that occurred in 1987, 1989, and 1991,           
          respectively.  He concluded that under that method the value of             
          decedent's 50-percent stock interest in B&W Longview should be              
          derived by (1) adding to the book value of B&W Longview on the              
          valuation date a premium equal to 23 percent of the gross amount            
          of the trade notes receivable held by that corporation on that              
          date and (2) multiplying the resulting sum by 50 percent to                 
          reflect the fact that decedent owned only a 50-percent stock                
          interest in B&W Longview.  Mr. Bernstein determined that, under             
          the transaction method and before considering any discounts that            
          he believed are warranted because of the lack of control and the            
          lack of marketability inherent in that stock interest on the                
          valuation date, its value was $1,200,801.                                   
               In applying his modified market multiple method, Mr.                   
          Bernstein selected three publicly traded companies (guideline               
          companies) engaged to varying degrees in consumer lending that he           
          determined were comparable or similar to B&W Longview.  Mr.                 
          Bernstein did not explain in his report or adequately explain at            
          trial why the three guideline companies that he chose were                  
          comparable to B&W Longview on the valuation date and why he                 
          selected only three publicly traded companies as guideline                  
          companies.  For these reasons, we are not persuaded that the                





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011