- 38 -
in the drafts but somehow was omitted in the final purchase and
sale agreement.
Under the foregoing circumstances, we find it unnecessary to
engage in any detailed analysis of the report of petitioner's
expert, Mr. Mard, who arrived at a fair market value of
$6,588,000, approximately $200,000 more than petitioner reported
as the purchase price on its Form 990 for the fiscal year ended
September 30, 1983. We think it appropriate to note, however,
that we examined his report and testimony sufficiently to
conclude that his analysis would probably require adjustment
which would produce a fair market value of at least $7 million,
an amount not insignificantly in excess of the $6.638 million
purchase price we have accepted and an even greater excess over
the $6.338 million figure shown on petitioner's above-mentioned
Form 990.
The long and the short of the matter is that the
negotiations between Mr. O'Donnell and Mr. Rosenkranz were
fatally flawed because of their apparent failure to take into
account the obvious and substantial adjustments to Mr.
Sheldrick's appraisal as of September 30, 1981, in respect of
changes between that date and March 31, 1983.11 Petitioner's
11 The record contains numerous indications of such failure
either directly or inferentially from their inability to recall
significant aspects of the May 1983 sale. One example is
(continued...)
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