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rights. In applying such a standard, the estate determined that
the value of the consideration received by Cyril was
approximately $58,000, of which approximately $44,000 consisted
of control value received by Cyril.
The estate argues that a control premium must be applied in
this circumstance because an actual, bargained-for transaction
occurred in which Cyril obtained control of JM. But even if we
were to accept the estate’s argument, its application of its own
“actual buyer-seller” test is flawed. First, the control premium
and control value analysis, even if appropriate, were incorrectly
applied. Mr. Browning applied the control value to the combined
total of Cyril’s share ownership after the 1951 Agreement. Thus,
Mr. Browning took into account shares already owned by Cyril in
valuing control. If Mr. Browning had applied his control value
analysis to the percentage of shares owned only by Joseph, 28.26
percent, and not the combined percentage of the shares of Joseph
and Cyril, 61.99 percent, the value of the consideration received
by Cyril would have been approximately $29,000 using Mr.
Browning’s valuation methodology.34 Also, Mr. Browning’s support
34In his control value analysis, Mr. Browning determined a
control value in JM of $174,000. He determined that Cyril was
receiving 61.99 percent of this control value, or $107,880,
before factoring in the life interests of Joseph and Cyril. If
one uses the 28.26-percent figure which represents the actual
percentage of shares that Cyril was receiving an interest in from
Joseph, one arrives at a control value of $49,172, before
factoring in the life interests of Joseph and Cyril. After
(continued...)
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