Pope & Talbot, Inc., & Subsidiaries - Page 39

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          Valuation by Reference to the Partnership Units                             

               The partnership units were publicly traded on the Pacific              
          Stock Exchange.  There were approximately 1.2 million partnership           
          units outstanding.  During the first 20 days following                      
          commencement of "when issued" trading, the aggregate trading                
          volume was 116,892 units, or 9.7 percent of the number of units             
          outstanding, and the weighted average trading price of the units            
          was approximately $11.50 per unit.                                          
               Petitioner argues that the value of the Washington assets              
          held by the Partnership must be determined by reference to the              
          partnership unit prices set by the market.  Thus, according to              
          petitioner, the Partnership's assets had an aggregate fair market           
          value on December 20, 1985, of approximately $41.5 million based            
          on the sum of (1) the aggregate public trading price of the units           
          (i.e., 1.2 million units x $11.50 per unit, or $13.8 million) and           
          (2) the initial indebtedness of the Partnership ($27.7 million).            
          Furthermore, petitioner argues that the unit price does not                 
          represent a discount from the liquidation value of the                      
          partnership, because with a publicly traded company, there is no            
          difference between the aggregate trading value of the units and             
          the amount produced by subtracting the entity's liabilities from            
          the fair market value of its individual assets.                             
               To support its position, petitioner introduced the reports             
          and testimony of two expert witnesses, Professor Michael Bradley,           





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