- 31 -
The data on which Burns relied show that interests in
similarly situated partnerships were trading at a 38-percent
discount from April 2 to May 31, 1995. The data on which Elliott
relied show that interests in similarly situated partnerships
were trading at a 45-percent discount from April 2 to May 31,
1994. Therefore, transfers of interests on or around January 1,
1995, would have been trading at a discount somewhere between 38
and 45 percent. Because the data on which Burns relied are
closer in time to the transfer date of the 16.915-percent AVLP
interests, we give greater weight to his determination.
Recognizing that the valuation process is always imprecise, a
40-percent discount is reasonable. This discount is a reduction
in value for an interest trading on the secondary market and
encompasses discounts for lack of control and lack of
marketability.
Elliott opines that an additional 20-percent discount for
lack of marketability is applicable because the partnerships that
are the subject of the data in the publication are syndicated
limited partnerships. He believes that, although there is a
viable market for syndicated limited partnership interests, a
market for nonsyndicated, family limited partnership interests
does not exist. The additional 20-percent discount opined by
Elliot is also attributable to sections 8.4 and 8.5 of the AVLP
agreement, which attempt to limit the transferability of
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011