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controlling value for the interest valued as of Dave True’s death
was $45,297,509.
e. Court’s Analysis
The positions of the parties and the Court’s determinations
of the marketable minority values of True Ranches’ total equity
at each of the valuation dates are summarized infra pp. 278-279.
We accept the agreement of the parties that controlling
equity value on a net asset value basis was $41,003,000 as of
January 1, 1993, and $45,297,509 as of June 4 and June 30, 1994.
However, we reject the parties’ proposed minority discounts.
Mr. Kimball derived a 25-percent minority discount from studies
of premiums offered during tenders for control of publicly traded
companies. He found that the observed average control premiums
of 30 to 40 percent translated into minority discounts of 23 to
29 percent. We find this analysis to be unhelpful because a
general partner in True Ranches would exert more control over the
business than a shareholder in a comparable public company. The
True Ranches partnership agreement required the partners to
manage jointly the partnership’s affairs. Thus, each partner had
an equal vote in (among other things) appointing management,
setting business policies, making distributions, buying and
selling assets, and amending the partnership agreement. A
minority shareholder could not exercise equivalent control over a
public company.
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