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qualifies as an expert for purposes of this case.
Mr. Browning determined the values of the property interests
in issue in the following manner. Mr. Browning, using a
combination of market and income approaches, determined the
business enterprise values25 of JM and Specialty and then
subtracted debt values to arrive at the total proportional equity
values of the companies. Mr. Browning separated the equity
values into preferred and common equity and adjusted for
discounts relating to lack of marketability and liquidity, and
minority interest considerations. Mr. Browning then applied his
valuation determinations of JM and Specialty stocks to the
property interests transferred and received by Cyril, adjusting
for the control value he believed Cyril received in connection
with JM, in order to value the interests at issue.
i. Valuation of JM and Specialty
Mr. Browning used the market comparable and the discounted
cash-flow methods of valuation to determine the value of JM. Mr.
Browning compared JM with the following companies: (1) City of
Paris; (2) Emporium Capwell Co.; (3) Roos Bros., Inc.; and (4)
Western Department Stores. All four companies were publicly
traded, though not on the NYSE, had stores located in the San
Francisco area, and were closer in size in terms of total
25Mr. Browning defines “business enterprise value” as “the
total investment value of a firm which is partitioned into debt
and equity values.”
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