- 47 -
We likewise do not rely upon the letter of intent.
At trial, Mr. Hess testified to a number of factors which
petitioners argue a hypothetical buyer would have considered in
purchasing shares of HII stock: (1) The trend toward the use of
aluminum wheels was creating competition for HEI’s steel wheel
manufacturing customers; (2) the penetration of HEI’s most
prominent competitor, Fontijne, into the American market with the
advantage of favorable exchange rates; (3) HEI’s and Hess MAE’s
dependence on exclusive license agreements; (4) HII’s continued
problems with technical and sales employees;43 (5) the costs to
support HII’s new sales and service organization in Switzerland;
and (6) the scheduled retirement of Mr. Kucklick in February
1998. The experts discussed several of these items in their
general discussions of the economy and the industry in which HII
and its principal customers were involved. These items were
factored into their various analyses, and we have considered them
as part of our discussion relating thereto.44
43We note that petitioners’ expert indicated that employee
turnover had not been a significant problem.
44Other than Mr. Hess’s testimony, we have no basis from
which to conclude that the remaining factors were apparent at the
time of the gift, whether they would have been considered by a
hypothetical buyer, and to what extent these factors would affect
the fair market value of HII stock.
Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 NextLast modified: May 25, 2011