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businesses. This heavy volume of business combinations has
continued to date.
Steven M. Smith is a certified public accountant who
provides accounting, tax, and consulting services to Seminole,
Max Weitzenhoffer, and other clients.5 In 1993, Mr. Smith and
Max Weitzenhoffer decided that Merrill Lynch should appraise the
value of a minority interest in Seminole so that Max
Weitzenhoffer could offer to buy the shares of those shareholders
who were not interested in the company. Merrill Lynch prepared a
report dated and delivered to Max Weitzenhoffer on July 5, 1994,
which valued shares of Seminole's common stock constituting a
minority interest at $29.77 each as of December 8, 1993. Merrill
Lynch assumed, among other things, that Seminole had 16
shareholders and that the per-share value of each shareholder's
shares was the same. Merrill Lynch did not distinguish or
discuss the difference between the class A shares and the class B
shares.
Before receiving Merrill Lynch's report, Max Weitzenhoffer
asked some of Seminole's shareholders if they would sell their
stock at $29.70 per share. Mr. Smith had advised Max
Weitzenhoffer that purchases through the will of his grandmother,
Irma Rosenthal, would have tax advantages. On May 12, 1994, Mr.
Hoffman, who was approximately 72 years old, accepted Max
Weitzenhoffer's offer and sold his stock to the Irma Rosenthal
5 In addition to his work for Seminole, Max Weitzenhoffer
produces theater in New York and London.
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Last modified: May 25, 2011