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As of September 30, 1979, the book value of FIC's common
stock was $1,033,601. As of February 2, 1980, no dividends had
ever been declared or paid on FIC's common stock. With the
assistance of Robert, Mr. Shillington, and Mr. Tishler, decedents
valued their respective gifts of 6 shares of FIC stock at $62,016
($10,336 per share) and timely filed the requisite gift tax
returns reporting the 1980 Gifts. The period of limitations on
assessment of additional gift tax on the 1980 Gifts has expired.
Following the 1980 Gifts, the outstanding common stock of
FIC was owned as follows:
Royal 24 shares
Maude 24 shares
Robert 52 shares
Following the 1980 Gifts, decedents executed codicils to
their wills providing that their remaining shares of FIC's common
stock would be distributed equally among all their children, to
the exclusion of Robert.
E. 1981 Recapitalization
In 1980 or 1981, BKC requested that all shareholders of FIC
personally guarantee the debt of FIC to BKC. Neither decedent
was willing to accede to BKC's request, while Robert was willing
to become liable as the sole guarantor only if decedents agreed
to relinquish their voting rights in FIC. Robert's reluctance to
be the sole guarantor emanated, in part, from the terms of
decedents' wills, under which Robert's siblings would eventually
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