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all the True companies he valued; therefore we do not repeat that
discussion here.
The Kimball report also addressed aspects of the
Stockholders’ Restrictive Agreements that made the subject shares
in the True companies less liquid than publicly traded shares.
In general, Mr. Kimball found that the corporate buy-sell
agreements had the same negative impact on marketability of
corporate shares as the identical partnership agreement
restrictions had on marketability of partnership interests.
Mr. Kimball also observed that S corporations in general,
and Belle Fourche, Black Hills Trucking, and White Stallion in
particular, had features that affected the fair market value of
their stock. The Kimball report explained that limitations on
the number and types of investors in S corporations reduced
marketability by restricting the pool of willing buyers. On the
other hand, the Kimball report noted that the lack of corporate
level income taxes allowed S corporations to distribute more cash
to shareholders, thus enhancing marketability.
Based on the foregoing, the Kimball reports concluded that
the subject interests in Belle Fourche were not readily
marketable and applied 40-percent marketability discounts to the
marketable minority values as of June 4 and June 30, 1994.
b. Initial and Final Lax Reports
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