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interests are entitled to a secondary market discount of
38 percent, a discount for lack of marketability equal to
7.5 percent, and no discount for built-in capital gains.
An owner of a 16.915-percent limited partnership interest in
AVLP does not have the ability to remove a general partner. As
such, a hypothetical buyer would have minimal control over the
management and business operations. Also, a 16.915-percent
limited partnership interest in AVLP is not readily marketable,
and any hypothetical purchaser would demand a significant
discount. In calculating the overall discount for the AVLP
interests, both experts use data from different issues of the
same publication regarding sales of limited partnership interests
on the secondary market. The publication was the primary tool
used by both experts.
Burns, using the May/June 1995 issue, opined that interests
in real estate-oriented partnerships with characteristics similar
to AVLP traded at discounts due to lack of control equal to
38 percent on January 1, 1995. The May/June 1995 issue contained
data regarding the sale of limited partnership interests during
the 60-day period ended May 31, 1995. Burns classified AVLP as a
low-debt partnership making current distributions.
Elliott, using the May/June 1994 issue, opined that similar
partnerships traded at a secondary market discount of 45 percent.
The secondary market discount is an overall discount encompassing
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