Estate of Marcia P. Hoffman, deceased, Elisabeth Hoffman, Personal Representative - Page 9




                                        - 9 -                                         
          could be built upon.  At that time, the Cathead property was not            
          listed for sale, and there were no known offers to purchase.  An            
          appraisal of the Cathead property, as of December 30, 1992, was             
          performed by Juan Carbonell and Michael Tarnow (the Carbonell and           
          Tarnow report).  The Carbonell and Tarnow report based its                  
          valuation on a sales comparison approach6 and assumed that the              
          waterfront lots could be sold over a 5-year period.  The retail             
          sales prices realized during each year of the sale period were              
          discounted by 9 percent to estimate their net present value.7  On           
          the basis of the considerations above, the Carbonell and Tarnow             
          report valued the entire Cathead Property at $3,417,092.  Of this           
          amount, $870,000 was attributed to the house owned by decedent              
          and Mr. Hoffman.                                                            
               As of December 31, 1993, Clubside’s liabilities consisted of           
          accounts payable of $499 and the following promissory notes:                
          Note Payable       Amount    Interest Rate   Maturity Date                  
          Melissa Hoffman Trust    $24,000        7.61%     1/01/2012                 
          Matthew Hoffman Trust    24,000         7.61%     1/01/2012                 
          Elisabeth Hoffman Trust  24,000         7.61%     1/01/2012                 
          Hoffman Associates       278,147        7.61%     1/01/2012                 

               6The Carbonell and Tarnow report compared the Cathead                  
          property to other properties with similar uses and utility that             
          had recently been sold.  Next, dollar adjustments were made to              
          account for the differences between the Cathead property and the            
          comparables.  The adjustments were totaled and factored into the            
          sales prices of the comparables to indicate a probable sales                
          price for the Cathead property.                                             
               7The 9-percent discount rate was arrived at by taking the              
          prime interest rate (6 percent) plus 1 percent and adding 1                 
          percent each for risk and nonliquidity factors.                             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011