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Approximately 26 to 33 percent of Dunn Equipment’s gross
operating revenues was earned from labor, parts, and equipment
rentals (including the supplying of operators), and Dunn
Equipment had 134 employees at this time. Thus, even though Dunn
Equipment’s primary business was the leasing of heavy equipment,
there were significant active operational aspects to the company
as of the valuation date.
Certainly neither Ms. Eggleston in her report nor respondent
on brief has provided an explanation as to why the existence of a
large disparity between earnings value and net asset value is, by
itself, a sufficient basis for disregarding the earnings
approach. We do not believe that the disparities in this case
indicate the appropriateness of one approach to the exclusion of
the other. Respondent and Ms. Eggleston repeatedly criticize Mr.
Frazier for failing to “reconcile” the disparate values obtained
in his report. But they are far more guilty of this than Mr.
Frazier. Rather than reconcile the two values, both respondent
and Ms. Eggleston simply assume that with proper adjustments the
greater value, i.e., the asset-based value, is the correct one.
Although we found her report useful with respect to certain
issues, we note that Ms. Eggleston is not an appraiser, but
instead works in the dispute analysis and corporate recovery
division of Price Waterhouse LLP and further that she did not
perform an independent appraisal of the stock in issue. We
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