- 49 -
reference to a series of studies undertaken by Shannon Pratt,
Chairman of Willamette Management Associates, Inc., a national
business valuation firm (the Willamette studies). Without
explaining the basis of his testimony, Mr. Frazier’s opinion is:
“[T]he evidence from the Willamette study was quite compelling
and offered strong support for the hypothesis that the fair
market values of minority interests in privately held companies
were and should be greatly discounted from their publicly-traded
counterparts.”
By contrast, in his rebuttal testimony, Dr. Bajaj offers a
compelling criticism of both the Willamette studies and another
series of studies undertaken by John D. Emory, vice president of
appraisal services at Robert W. Baird and Co., a regional
investment banking firm.33 He concludes that the latest study
conducted by Mr. Emory is biased because it does not adequately
take into account the highest sale prices in pre-IPO
transactions, and he criticizes the Willamette studies for not
disclosing enough data to reveal whether they suffer from a
similar bias. Dr. Bajaj has convinced us to reject as unreliable
Mr. Frazier’s opinion to the extent it is based on the IPO
approach. We shall proceed to consider Mr. Frazier’s restricted
stock analysis and Dr. Bajaj’s private placement analysis.
33 Mr. Frazier relied on Mr. Emory’s studies in the 1996
HFBE appraisal report but makes no mention of those studies in
either his direct testimony or his rebuttal testimony.
Page: Previous 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 NextLast modified: May 25, 2011