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Arkansas motel as reflected in the original Biles report. Like
Smith, in valuing the California motel, Schwartz used the Ohrmund
report’s appraised value as a starting point; unlike Smith,
Schwartz adjusted this value downward by $193,000 to reflect
decedent’s individual ownership interest in parcel 2. Schwartz
concluded that the value of decedent’s 50 shares of C&L Bailey
stock was $307,100. Like Smith, Schwartz allowed a 20-percent
minority-interest discount. Unlike Smith, Schwartz allowed a 40-
percent (instead of a 27.44-percent) marketability discount.
Petitioner’s other expert, Biles, did not undertake to value
decedent’s 50 shares of C&L Bailey stock but instead performed a
“desk review” of the Ohrmund report’s appraisal of the California
motel. In his report (the Biles report), Biles concluded that
the value of decedent’s individual ownership interest in parcel 2
was $64,100. Biles also concluded that the value of the
California motel was only $819,180.
On brief, to derive the $194,565 asserted value for
decedent’s 50 shares of C&L Bailey stock, petitioner generally
follows Schwartz’s valuation methodology and conclusions but
substitutes Biles’ valuation of the California motel into
Schwartz’s analysis.
As reflected in the preceding discussion, Smith and Schwartz
agree about a number of fundamental issues in valuing the C&L
Bailey stock. They agree that decedent’s 50 shares of C&L Bailey
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