- 281 -
In the initial Lax report, Mr. Lax applied a 25-percent
minority discount to net asset value, along with a 45-percent
marketability discount.
In the final Lax report, however, Mr. Lax applied a combined
minority and marketability discount from net asset value of 60
percent. He explained that the combined discount was derived
from the studies described in the True Ranches section of this
opinion. See supra p. 271. Mr. Lax considered the subject
interests to be less marketable than the interests in the studies
because White Stallion had no history of paying dividends and
there was no active market for investments of this type.
c. Respondent’s Position
Respondent offered no expert testimony or other evidence
regarding White Stallion’s total equity value as of June 4, 1994.
Instead, respondent adopts Mr. Lax’s net asset value of
$1,139,080.
Respondent argues that the 34.235-percent interest owned by
Dave True at death is not entitled to a minority discount,
because it represented a significant ownership block that had
swing vote potential.
d. Court’s Analysis
The positions of the parties and the Court’s determinations
of the marketable minority values of White Stallion’s total
equity are summarized infra p. 287.
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