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the following: (1) The fractional interests are held in a trust
causing an inability to directly access any proceeds of
partition; (2) the beneficial fractional interest holders were
from the same family generally resulting in less agreement on a
course of action;5 (3) partition suits in Louisiana require that
all mineral owners be made parties to the proceeding; (4) the
costs of partition might be assessed against and borne by the
instigating partial interest holder; and (5) a buyer of a 14/65
or 17/65 interest would have no control and the other interests
could limit profitable use or sale of the property. In this
case, the property has been poorly managed by one of the
beneficiaries/family members for years, and the only remedy would
be to wait until other interest holders die or to attempt
partition.
The reasons cited by Mr. Steele do not support his
conclusion for a 90-percent discount. Several of the reasons he
cites were already considered in his written report to arrive at
his “at least 55 percent” discount opinion. We do agree,
however, with his observation that this family has experienced
prior disagreement, which precipitated the creation of the trust.
In addition, one family member has been allowed to independently
5 Because of Mr. Steele’s reputation and willingness to be
involved in partial interests, disgruntled family members seek
him out to purchase their fractional interests. In those
experiences he has found that the likelihood of disagreement is
greater among family members.
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