Estate of Charles a. Boratello, Deceased, C. Norman Borgatello and Josephine E. Donnelly, Co-Executors, and C. Norman Borgatello, Successor Trustee to the Charles A. Borgatello Living Trust - Page 24

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            necessarily an approximation, it is not required that the value                            
            that we determine be one as to which there is specific testimony,                          
            provided that it is within the range of figures that properly may                          
            be deduced from the evidence.  See id.                                                     
                  As in most valuation cases, the parties in the instant case                          
            rely extensively on the opinions of their respective experts to                            
            support their differing views about the fair market value on the                           
            valuation date.  Each expert utilizes the net asset value method                           
            in order to value Mr. Borgatello's interest in VIC.  For purposes                          
            of determining the appropriate discount to be applied to VIC's                             
            assets, the estate introduced the report of James Brockardt, who                           
            asserts that the net asset value of VIC should be discounted by                            
            35 percent for lack of marketability.  Respondent offered the                              
            report of Roger Wilde, who asserts that VIC's net asset value                              
            should be discounted by 27 percent for lack of marketability.                              
                  Mr. Wilde arrives at his discount using a build-up method.                           
            Mr. Wilde examines various factors and assigns a percentage value                          
            to each.  Some factors increase and some decrease the net asset                            
            value discount.  Wilde made the following adjustments to be                                
            included in the discount for lack of marketability:                                        
                  1.  Shareholder dividends and compensation paid             - 5%                     
                  2.  Local economy and real estate market at 1/12/94         + 5%                     
                  3.  Management continuity                                   - 2%                     
                  4.  Potential corporate gain and tax                        + 19%                    
                  5.  Restrictions on stock transfer                          + 3%                     
                  6.  Transaction and other costs                             + 7%                     

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Last modified: May 25, 2011