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VALUATION OF THE SEMINOLE MANUFACTURING COMPANY WAS
ESTABLISHED BY MERRILL LYNCH BUSINESS ADVISORY SERVICES
AT $ 29.77. IN ADDITION, THERE WERE TWO ARMS-LENGTH
SALES IN WHICH MAX WEITZENHOFFER PURCHASED 10,000
SHARES FROM EDMOND M HOFFMAN AND 6,960 SHARES FROM
JACQULINE [sic] BRANCH. THE TRANSACTION PRICE IN BOTH
INSTANCES WAS $ 29.77.
The notice of deficiency reflects respondent's determination that
the estate's shares were worth $70.79 each.
Seminole's headquarters are in Kalamazoo, Michigan.
Seminole owns the 115,000-square-foot manufacturing/distribution
facility in which its operations are located and an adjoining
20-acre parcel of land that is not needed for operations or
expansion. Representatives of Merrill Lynch discussed the value
of the adjoining land with Seminole's management when it prepared
its appraisal report, and, for purposes of the report, Merrill
Lynch assumed that the land was worth $10,000 an acre.
Seminole has always been a family business, and it is
obligated to redeem the stock held by shareholder employees upon
termination of their employment. The record does not disclose
the price at which these shares must be redeemed or other terms
of this redemption obligation. The record does not disclose
which shareholders are employees, with the exception of Messrs.
Reeves, Gunzler, Threadgill, and High. Seminole has
approximately 150 employees. Approximately 25 of them are
salaried administrative personnel, 75 are warehouse personnel,
and approximately 50 work in Seminole's in-house manufacturing
division.
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