Estate of John L. Baird - Page 14




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               In the Pennzoil transaction, Mr. Steele’s entity was                   
          attempting to purchase a controlling (at least 80 percent) or               
          complete interest in the Pennzoil property.  Purchases of                   
          Pennzoil fractional interests were initially subjected to                   
          discounts for the fractional interests in amounts generally                 
          around 60 percent.  When the buyer had acquired sufficient                  
          partial interests to hold at least 80 percent, the discounts                
          precipitously dropped to just over 14 percent.                              
               This discount pattern confirms the estates’ argument.                  
          Partial interests that do not constitute or result in a                     
          controlling interest are subject to substantially greater                   
          discounts than partial interests acquired by a controlling                  
          interest holder or which result in control of the fee.                      
               In his report, Mr. Steele concluded that a discount of at              
          least 55 percent would be appropriate for the purchase of partial           
          interests in Louisiana timberland.  During his trial testimony              
          Mr. Steele opined that the value of the partial interests should            
          be discounted 90 percent from the fair market value of the full             
          fee interest.                                                               
               The Court found Mr. Steele’s testimony helpful and germane             
          to the valuation of partial interests in Louisiana timberland.              
          Although there are sales of fractional interests in timberland in           
          Louisiana, such activity is relatively infrequent, and only                 
          limited information about such sales is available.  Mr. Steele              






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