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We place no weight on Mr. Lannom’s opinion. His report
contains no explanation of, or analytical support for, the
various “rules of thumb” employed in reaching several of its
valuation estimates. Thus, we are largely unable to assess the
merits of Mr. Lannom’s conclusions. See Rule 143(f)(1). To the
extent we are able to form a judgment, we find his analysis
unpersuasive. One of his market approach calculations and three
of his rules of thumb used gross revenue as the primary
determinative factor, without taking profitability into account.
This raises doubts about the basis for his conclusions, given
that Renier’s profitability was high in relation to the industry
average. Furthermore, while Mr. Lannom’s second market approach
calculation used Renier’s earnings and one of his rules of thumb
used Renier’s cash-flow, Mr. Lannom provided no justification for
the earnings and cash-flow figures he used. Finally, Mr.
Lannom’s report provided no factual support for his “key-man”
discount. Because of the summary nature and obvious shortcomings
of Mr. Lannom’s report, we give it no further consideration.
Both Mr. Sliwoski and Mr. Kramer ultimately concluded that
their asset approaches did not account for the goodwill inherent
in Renier as a going concern. We therefore restrict our analysis
to the income and market approaches as applied to Renier by Mr.
Sliwoski and Mr. Kramer. We now consider each in turn.
B. Income Approach
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