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issued a note to Mr. Jennings’s estate for $1 million to fund the
redemption.
V. 1996 Agreement and Redemption of Decedent’s BCC Shares
As a result of Mr. Jennings’s death and the subsequent
redemption of his shares in September 1996, decedent’s 43,080 BCC
shares became a controlling interest in the company, constituting
83.2 percent of the outstanding shares. The ESOP held the
remaining 8,692 outstanding shares. After Mr. Jennings’s death,
decedent was the sole member of BCC’s board of directors, and
decedent and BCC were the only remaining signatories to the 1981
Agreement.
In October 1996, decedent discovered he had cancer. After
consulting several doctors, decedent came to understand he was
gravely ill, and the available treatment options would only
extend his life a short time, if at all. One treatment option
involved a life-threatening surgical procedure. Decedent began
to put his affairs in order. Decedent had Mr. Truono prepare
additional “pro forma” analyses showing the impact on BCC of the
redemption of his shares at different prices.
One such analysis, pro forma 15, prepared in early November
1996 (Pro Forma 15), analyzed the impact on BCC of a purchase of
decedent’s shares for $4 million. Pro Forma 15 indicated that,
taking into account BCC’s receipt of approximately $3 million in
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