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interested purchaser, a representative from Gill & Associates
would call the bank to obtain the net asset value on the books of
the corporation. Gill & Associates believed the book value was a
fair value for the stock of Bancorp, and it used the book value
to compute what it believed was a fair price for a share of
Bancorp. Gill & Associates did not have access to the bank’s
list. Although Gill & Associates could readily quote to an
interested buyer what it believed to be a fair price for Bancorp
shares, Bancorp shares were not necessarily then available for
sale. If no shares were available, Gill & Associates would put
the interested person’s name on a list and contact that person
when shares became available. On six to eight occasions during
the 10-year period from 1984 through 1994, when Bancorp shares
became available for sale, Gill & Associates would place an
advertisement, for a brief period, in the local newspaper. Gill
& Associates charged a fee of 25 cents for each share placed, and
acted as placement agent as an accommodation to the bank, to
encourage its business relationship with the bank.
On December 1, 1994, eight individuals, including
petitioner, owned or controlled 50.5 percent of the issued and
outstanding shares of Bancorp. Petitioner owned or controlled
7 percent of those shares.
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Last modified: May 25, 2011