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determining the value of the interest transferred by Cyril, nor
has it assigned any value to the Nichols options.29
v. Value of Consideration Received by Cyril
Mr. Browning determined the value of the consideration
received by Cyril based upon control value and income value.30
The estate took the total equity value of JM, $435,000, and
applied a 40-percent control premium based on the fact that
Joseph’s shares, constituting 28.26 percent of the voting power
in JM, when combined with Cyril’s shares, constituting 33.73
percent of the voting power of JM, represented 61.99 percent of
the voting power in JM. This resulted in a $174,000 total
control value. The estate then multiplied the total control
value by 62 percent, Cyril’s total voting control percentage as a
result of the 1951 Agreement. This gave Cyril a total control
value of $107,880. Because Cyril did not receive voting control
until after Joseph’s death, the estate deducted Joseph’s life
estate to derive the control value received by Cyril. This was
accomplished by taking the total minority interest value in JM,
29Any value assigned to these options would result in a
larger interest being transferred by Cyril per the 1951 Agreement
and would enlarge any disparity between the remainder interest he
transferred and the consideration he received from Joseph.
30In his appraisal, Mr. Browning based his valuation of the
consideration received by Cyril on the assumption that Cyril
received outright ownership of Joseph’s shares. The estate
corrected its calculation posttrial and submitted revised
valuation calculations for the consideration received by Cyril.
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