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Based on the foregoing, the Kimball reports concluded that
the subject interests in True Oil were not readily marketable and
applied 40-percent marketability discounts to the marketable
minority values as of January 1, 1993, June 4, 1994, and June 30,
1994.
b. Final Lax Report
The final Lax report contained only a brief justification
for the marketability discounts applied to minority interests in
True Oil. The report said that AA gathered data on discounts
that have been realized on private market sales of restricted or
illiquid ownership interests and also examined the cost of
creating a public market for closely held interests. However,
the underlying data from those studies was not included in the
report. The final Lax report concluded that a minority interest
in True Oil was relatively illiquid, because the company was
closely held and its interests were unregistered; therefore,
Mr. Lax applied a 45-percent marketability discount to the
marketable minority value calculated as of June 3, 1994.
c. Gustavson Report/Rebuttals and Respondent’s
Position
Respondent did not provide expert testimony regarding
marketability discounts for any True company; instead, the
Gustavson rebuttals criticized only the discounts applied in the
Kimball and final Lax reports.
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