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the stock at issue. In preparing his September 1998 report, Mr.
Kleeman relied on public information available before the date of
decedent's death, such as the April, June, and November Baird
reports, the Form 10-Q filed by Applied Power with the Securities
and Exchange Commission for the quarter ended November 30, 1993,
the trading prices and volumes of Applied Power's stock, and the
relative size of the Trust's block of stock to the total issued and
outstanding stock of Applied Power. In preparing his report, Mr.
Kleeman also considered the Emory report, the post-date-of-death
sales of the block at issue, and a select group of reported
blockage discount cases.
Mr. Kleeman prepared a linear regression analysis of the
stock's trading volume and prices leading up to the valuation date
in order to forecast how the Trust might best sell its stock
without seriously depressing the market. He concluded that the
Trust could not dispose of its block of stock over a reasonable
period of time without depressing the stock's market price. He
assumed that disposal of the 280,507 shares of stock would have to
occur over a period of 40 days, in 7,000-share-per-day increments
(i.e., twice the average daily trading volumes for November and
December 1993), and that these sales would result in a price
decline of approximately 9 cents per day. Using these assumptions,
he determined that the present value of proceeds from the
transactions would be approximately $3,288,000, or $11.72 per
share.
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