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had no value. Given the overwhelming evidence of financial
catastrophe introduced by petitioner, respondent would have been
wise to offer some affirmative evidence to demonstrate G�nther’s
potential value. Respondent failed to do so. The record
presented to us supports a conclusion that a prudent
businessperson would have considered G�nther's stock to lack
potential value because the company's liabilities substantially
exceeded the fair market value of its assets, calculated on a
conservative basis, and G�nther’s business was in such a state
that G�nther’s assets could not reasonably be expected to exceed
its liabilities in the future.
Our conclusion is consistent with that of the marketplace,
which confirmed that G�nther's stock was worthless. After hiring
consultants and spending months seeking a purchaser, petitioner
could not find a company willing to acquire G�nther on acceptable
terms, even though it essentially was willing to give G�nther
away. Before the offer from GAI, the only offer that petitioner
received as a result of its efforts to dispose of G�nther after
May 31, 1992, would have required petitioner to pay the acquiring
company the equivalent of over $12 million and to provide
guaranties and concessions worth millions.
When petitioner finally convinced GAI to acquire G�nther,
petitioner had to assume $3,709,460 in bank debt, release the
right to reinstate the intercompany account receivable of
$11,429,665 it previously had waived to shore up G�nther’s German
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