- 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 thePage: 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