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an unreasonable assumption that Mr. DeJoria would unilaterally
reduce his compensation to $5 million as of the valuation date; (3)
a nonexistent "transition plan"; and (4) financial information not
available as of Mr. Mitchell's date of death. (In fact, petitioner
asserts that both Mr. Hanan's discounted cash-flow and comparable
companies analyses improperly rely on KPMG's projections of JPMS'
operating results following Mr. Mitchell's death.)
More specifically, petitioner first argues that the "DeJoria
projections" referred to by respondent are the projections
developed by KPMG with the benefit of 8 months of hindsight and
yearend audited financial data not available on April 21, 1989.
Petitioner contends that the projections did not exist at the
valuation date and would not have been knowable to a hypothetical
buyer or seller.
Second, petitioner contends that it would be unreasonable and
unrealistic to assume, as Mr. Hanan did, that Mr. DeJoria's
compensation could be reduced by any means short of litigation.
Petitioner contends that most buyers are litigation averse.
Therefore, petitioner posits, the only reasonable assumption is
that Mr. DeJoria would receive compensation in the amounts of $12
million for JPMS' 1990 fiscal year and $17 million per year
thereafter.
Third, according to petitioner, respondent refers to a
"transition plan" Mr. DeJoria developed when he learned of Mr.
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