Estate of Algerine Allen Smith - Page 23




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          opinion was based principally upon the District Court’s orders              
          issued before decedent’s death regarding the liability issue in             
          that case.                                                                  
               In Mr. Glasser’s opinion, the documents relating to the                
          Jarvis Christian litigation indicated that there was a great deal           
          of uncertainty surrounding Exxon’s claim against the royalty                
          owners.  On one hand, the District Court found that Exxon had the           
          right to seek recovery from the royalty owners under a theory of            
          equitable recoupment.  On the other hand, Mr. Glasser believed              
          that the District Court’s orders were discouraging to Exxon                 
          concerning the probability that Exxon would prevail on its claim.           
          Mr. Glasser believed that Exxon and the royalty owners, at the              
          time of decedent’s death, could have anticipated that there was a           
          “greater likelihood” that Exxon would be awarded substantially              
          less than all of the damages that it claimed.                               
               As part of his valuation determination, Mr. Glasser relied             
          on the District Court’s orders entered on August 25 and November            
          7, 1989.  In the August 25, 1989, order, the District Court                 
          declared that Exxon had a viable cause of action for equitable              
          recoupment against the royalty owners, but it also noted that the           
          court was inclined to dismiss Exxon’s claim against the royalty             
          owners.  In the November 7, 1989, order, the District Court                 
          stated that it “remains persuaded that Exxon at least owed the              
          royalty interest owners the duty to act as a reasonably prudent             






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