Gerald A. and Henrietta V. Rauenhorst - Page 38




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          before December 22, 1993.”18  Again, this information might be              
          relevant to a determination whether the right to sale proceeds              
          “ripened”; however, nothing in the Houlihan Lokey report suggests           
          that the warrantholders were legally bound, or could be                     
          compelled, to sell their warrants to WCP.                                   
               Respondent also points to Del. Code Ann. tit. 8, sec. 271              
          (2001) and argues that the donees could have been compelled to              
          surrender their NMG warrants.  That section provides:                       
                    SEC. 271.  Sale, lease or exchange of assets;                     
               consideration; procedure.                                              
                    (a)  Every corporation may at any meeting of its                  
               board of directors or governing body sell, lease or                    
               exchange all or substantially all of its property and                  
               assets * * * upon such terms and conditions and for                    
               such consideration * * * as its board of directors or                  
               governing body deems expedient and for the best                        
               interests of the corporation, when and as authorized by                
               a resolution adopted by the holders of a majority of                   
               the outstanding stock of the corporation entitled to                   
               vote thereon * * *                                                     




               18We note that despite the report’s conclusion that there              
          was little chance the transaction involving WCP would not be                
          consummated, Houlihan Lokey took significant discounts for the              
          risk that the transaction would not be completed.  The report               
          reflects that there was a 15- to 25-percent probability that the            
          deal would fall through as of Nov. 12, 1993, and this discount              
          figured into the valuation analysis of the warrants.  Further,              
          although respondent relies significantly on the valuation report            
          with respect to petitioners’ motion for partial summary judgment,           
          we point out that respondent essentially takes the position in              
          his amended answer that the valuation report is wrong in                    
          assigning a value of $6,889 per warrant and that petitioners’               
          charitable deductions are limited to $424.10 per warrant, or                
          $326,577 in the aggregate.                                                  





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