Estate of Marvin M. Schwan - Page 11




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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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