Estate of Sam Homer Marmaduke - Page 10




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          decedent shortly before the valuation date.  He stated that at no           
          time was he under compulsion to buy or sell the shares of stock.            
               The value, however, of decedent's large, minority block of             
          366,385 shares of stock in Hastings is not controlled by the                
          value of 2,000 shares nor by the other 1993 transactions                    
          involving small blocks of Hastings stock.  Respondent's expert              
          relies heavily on transactions cumulatively representing less               
          than 1 percent of Hastings common stock.  Decedent's stock, on              
          the other hand, represents some 14 times the total number of                
          shares of stock exchanged during 1993.                                      
               We note that the A.G. Edwards' report reduced the 40-percent           
          discount for lack of marketability that it would use for Hastings           
          stock in general to a 20-percent discount only because of the               
          liquidity available to the Hastings stock held by the ESOP.                 
               We regard a 15- or 20-percent lack-of-marketability discount           
          as inadequate in valuing decedent's shares.  It is clear that               
          decedent's large, minority block of Hastings stock was not                  
          readily marketable and that a significant lack-of-marketability             
          discount is appropriate.  Several studies in evidence confirm               
          that discounts for lack of marketability of stock in closely held           
          corporations often exceed 30 percent.                                       
               In reaching our conclusion as to the appropriate lack-of-              
          marketability discount to apply to decedent's stock in Hastings,            
          we regard the following factors as supporting a significant                 





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