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entity values. First, as of January 1, 1993, Eighty-Eight Oil’s
total equity on a book basis was more than $43.5 million, which
was primarily composed of cash, cash equivalents, and accounts
receivable. Given the lack of any substantial book to fair
market value disparities for these liquid assets, we question the
accuracy of Mr. Kimball’s total equity value of just over $25
million. If this difference only related to the fact that Mr.
Kimball derived a minority value, and not a controlling value,
that would suggest an implied minority discount of approximately
43 percent, which would be excessive.
Second, we are troubled by the differences in the way
petitioners derived the sales price for the interest transferred
by Dave True to his sons on January 1, 1993, compared to Mr.
Kimball’s method for valuing the subject interest. The Eighty-
Eight Oil buy-sell agreement required the selling partner to sell
all or some of his interest for book value, as reflected by his
capital account, as of the day immediately preceding the sales
event. As previously stated, the sales price under the buy-sell
agreement amounted to approximately 5.86 percent of total
partners’ capital as of December 31, 1992. However, Mr. Kimball
valued the subject interests by computing total equity value on a
minority basis, by applying a marketability discount, see infra,
and then by multiplying total discounted equity by 24.84 percent.
Because Eighty-Eight Oil routinely allowed its partners to
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