Estate of Alice Friedlander Kaufman - Page 19




                                       - 19 -                                         
          must hold the subject stock to realize a sufficient profit;                 
          (9) the corporation's redemption policy; and (10) the cost of               
          effecting a public offering of the stock to be valued; e.g.,                
          legal, accounting, and underwriting fees.  Mandelbaum v.                    
          Commissioner, supra.                                                        
               Each party called a witness whom they and he asserted was an           
          expert on valuation and would help the Court determine the fair             
          market value of the estate's stock.  Petitioners called Bret                
          Tack, accredited senior appraiser, a principal of the firm of               
          Houlihan Valuation Advisors.  Mr. Tack graduated from college in            
          1985, and he has continued to work in the valuation field ever              
          since.  We recognized Mr. Tack as an expert on business                     
          valuation, and we accepted his reports into evidence.  His                  
          initial report analyzed the fair market value of the estate's               
          stock as of April 14, 1994, concluding that the estate's stock              
          interest was a minority, noncontrolling interest that had a fair            
          market value on that date of $30.85 per share.  He reached his              
          conclusion after analyzing two of the three relevant valuation              
          methods; namely, the market comparative method and the discounted           
          cash-flow method.  He did not analyze the third method; i.e., the           
          net asset value method.  His supplemental report discussed the              
          marketability discount in the setting of the Mandelbaum factors,            
          concluding that the 35-percent discount factored into his $30.85            
          per-share value was consistent with a Mandelbaum analysis.                  
               Respondent called William K. Fowler, A.M., a financial                 
          analyst employed by the Internal Revenue Service.  Mr. Fowler has           


Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011