properties; respondent disagrees;2 and (2) respondent maintains
that a portion of the $1,364,071 in expenses should be allocated
to the transfer of $1.5 million in working capital and to the
sale of the installment notes receivable; petitioner disagrees.
Inclusion of Working Capital
In Pope & Talbot II, the primary issue for decision was the
fair market value of the Washington properties distributed by
petitioner. Our valuation was limited to the fair market value
of timber, timberland, land development and resort properties,
and related assets on the Washington properties. Neither the
value of the $1.5 million in cash transferred to the Partnership
nor the value of the installment notes receivable sold to the
Partnership was in dispute in Pope & Talbot II.
In determining the fair market value of the Washington
properties, we grouped the properties into four separate
categories and described the assets in each category. These
descriptions include, for example, the amount of merchantable
timber that could be harvested, the amount of land that could be
developed, and the various improvements on the properties. We
examined the assets in each category and, with the assistance of
expert valuation reports, determined the fair market value of
assets in each category. We concluded that the value of each
2Petitioner's Rule 155 computation treats the working
capital as part of the Washington properties, in effect, reducing
the fair market value of the Washington properties by $1.5
million.
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Last modified: May 25, 2011