Estate of H.A. True, Jr. - Page 33




                                       - 120 -                                        
          agreements until the current estate and gift tax litigation is              
          concluded.                                                                  
               We believe that the current buy-sell structure poses a                 
          problem only if the True sons consider tax book value not to                
          fairly represent market value.  Otherwise, it should not be a               
          problem that their heirs, who did not actively participate in the           
          True companies, might receive cash equal to the value of the True           
          sons’ business interests, as determined under the buy-sell                  
          agreements.  The True sons were the natural objects of Dave                 
          True’s bounty; they are not the natural objects of each other’s             
          bounty; their own children and grandchildren are the natural                
          objects of their respective bounties.  These facts lead us to               
          infer that Dave True used the business arrangements with his                
          children to fulfill his own testamentary objectives.                        
                    2. Adequacy of Consideration Test                                 
               The adequacy of consideration paid and received pursuant to            
          a buy-sell agreement is generally measured at the date the                  
          agreement is executed.  See supra p. 75.  However, courts have              
          also evaluated the adequacy of consideration and conduct of                 
          parties after the agreement date when intervening events within             
          the parties’ control caused a wide disparity between the formula            
          price and fair market value.  The standard for determining                  
          adequacy of consideration requires the formula price (1) to be              
          comparable to what persons with adverse interests dealing at                
          arm’s length would accept and (2) to bear a reasonable                      





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