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Finally, we reject the value Spiro obtained with his
piecemeal sales method, because we think the method results in
the value of the stock to a particular borrower, not the fair
market value.
We think that petitioner's sale of 135 shares at arm's
length to unrelated parties after decedent's death provides the
best indication of the value of a minority interest in Willits.
In this transaction, the shares were purchased by persons whom we
presume have knowledge of the limits of the market and the value
of a minority interest in Willits.
Moreover, Willits shares have historically traded at or near
book value. In petitioner's sale, the shares sold for
approximately 2.9 percent less than their book value at the time
of sale. The book value provided this Court nearest the date of
valuation was $806. Accordingly, we find that the value of a
minority interest on the date of valuation was $783, before
applying a discount for blockage.
The market for the Willits' shares was limited, and
petitioner could not have sold its block of shares in a
reasonable period of time without depressing the market and
lowering the price. Accordingly, we apply a 20-percent discount
for blockage and find that the fair market value of the Willits
stock is $626 per share.
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