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 25

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            Mr. Brockardt, on the other hand, presents a general discussion                            
            of various factors, but does not assign a percentage value to any                          
            of them.  He bases his total discount on his judgment and                                  
            consideration of the factors as a whole.  Thus, for example, Mr.                           
            Wilde reveals exactly how much of a discount he allows for the                             
            built-in gains in the assets of VIC, whereas with Mr.                                      
            Brockhardt's report, we do not know how much of the discount was                           
            attributable to built-in gains.  Mr. Wilde's build-up method                               
            presents a useful framework to consider the various factors at                             
            play in the instant case.  Below, we consider those factors                                
            within his framework and in light of Mr. Brockardt's report.                               
                  Mr. Wilde reduces the discount by 5 percent because of VIC's                         
            "consistent and strong cash-flow (dividend payment capability)                             
            and low vacancy rate of the [VIC's] shopping centers."  Mr. Wilde                          
            further states:  "The Company's financial statements and dividend                          
            policy indicate that the company has paid nominal dividends, but                           
            does pay the controlling shareholder significant salary.  This                             
            would be a favorable factor for an investor in the shares being                            
                  Messrs. Marx and Holden accounted for the cash-flow provided                         
            by the properties and the economic conditions of the Santa                                 
            Barbara area in their valuations of MVN and MVS.  The estate                               
            argues that when arriving at a value for the corporation, we                               

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Last modified: May 25, 2011