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redeem only the outstanding voting stock owned by the Foundation
upon Marvin’s death and not the non-voting stock.” The
plaintiffs alleged injury to their position as minority
shareholders and trust beneficiaries on grounds including
violation of statutory corporate law, fraud, breach of fiduciary
duty, and conspiracy. This litigation eventually settled in
November of 1997. Pursuant to the settlement reached, the
redemption transaction remained in place, and SSE agreed to
redeem as well the stock held by the plaintiffs for a price of
nearly $160 million.
In the notice of deficiency sent by respondent to the Estate
in August of 1997, respondent determined that the value of the
SSE stock in decedent’s gross estate was $1,064,591,322, an
increase of $195,140,522 over the reported value. As relevant to
the instant motions, respondent further determined that the fair
market value of the SSE shares passing to the Foundation for
purposes of the charitable deduction was $857,572,432, a decrease
of $11,878,368 from the reported value.
Discussion
I. Petitioners’ Motion for Summary Judgment
A. Power To Recapitalize
Petitioners move for summary judgment on the primary grounds
that “the Foundation’s power to convert the non-voting stock to
voting stock gave it the same rights as were included in the
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