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The Heck family purchased control of Korbel in 1954, and, in
1976, Adolf Heck (decedent’s husband) became the sole shareholder
of the 1,900 shares of common stock outstanding. As of 1984,
Adolf and decedent each owned 950 shares. In 1984, Gary Heck
acquired 380 shares (190 each from Adolf and decedent). Also, in
1984, Adolf died, Korbel redeemed 310 of his remaining 760 shares
from his estate, and the remaining 450 shares passed in trust for
decedent’s benefit. In or around 1987, Gary Heck purchased the
450 of the shares in trust, giving him 830 shares (52.2 percent
of the 1,590 shares outstanding) and leaving decedent with the
remaining 760 shares. In 1989, decedent transferred 130 shares
in trust for the benefit of her two grandchildren. That left
decedent with 630 shares, the value of which, on the date of
death, is in dispute herein.
Primarily, Korbel produces economically priced premium
champagne. During the 3-year period ending with 1994, champagne
sales represented approximately 70 percent of Korbel’s total
sales, brandy represented approximately 27 percent of such sales,
and still wine accounted for the approximately 3-percent balance.
At the beginning of 1995, 95 percent of Korbel’s gross profits
were attributable to sales of champagne and just under 5 percent
to sales of brandy.
As of the valuation date, Korbel’s facilities were located
on 1,800 acres of land, mostly in Sonoma County. Of that
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Last modified: May 25, 2011