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It is not evident that Mr. Wilde's "Management Continuity"
factor is reflected in the value of MVN and MVS or VIC's other
assets. The estate incorrectly equates Mr. Wilde's discussion of
management continuity with the management costs associated with
overseeing MVN and MVS. Such management costs are indeed
reflected in the value of MVN and MVS. What we believe Mr. Wilde
refers to in his brief discussion of management continuity is
that managing VIC's real estate does not require the expertise
needed to oversee a management intensive operating company with
many employees. Because VIC is a real estate holding company
that maintains low vacancy rates in its properties (1 percent of
total square footage vacant in a sluggish market), Mr. Wilde
concludes that "The likelihood of a buyer being able to
successfully manage the real estate holdings is strong." Indeed,
it seems likely that any buyer of VIC will choose not to employ
VIC's current managers to oversee the company's properties.
Continuity of the current VIC management is unnecessary for the
company to succeed as a going concern. The question then becomes
whether Mr. Wilde's management continuity factor affects the
discount in the manner he suggests. We tend to think it does
not. Mr. Wilde reduces the net asset value discount by 2 percent
for the management continuity factor, but we think the factor is
neutral. Consequently, we do not assign any weight to it.
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