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life insurance proceeds on decedent’s death, the redemption of
decedent’s shares for $4 million would leave BCC with
approximately $1.5 million in cash and cash equivalents. In Mr.
Truono’s judgment, this was the minimum amount that BCC required
to operate without the need for personal guaranties for BCC’s
performance bonds and to ensure that BCC would be able to meet
any obligations to its ESOP participants.6
Pro Forma 15, reviewed by decedent in early November 1996,
assumed BCC had a fair market value of $155.32 per share, which
Mr. Truono determined by dividing the $8,041,126 fair market
value for BCC estimated in the then most recent BVS appraisal
(for the fiscal year ended January 31, 1996) by BCC’s 51,772
shares outstanding after the redemption of Mr. Jennings’s
shares.7 Pro Forma 15 also showed a per-share book value of
$173.77, which, assuming 51,772 outstanding shares, results in a
total book value for BCC of $8,996,420.8
6 Mr. Truono testified that, as of 1996, BCC had never spent
more than $100,000 in a given year to redeem BCC shares.
7 The 1996 BVS appraisal itself estimated a per-share fair
market value of $86.73, which is the per-share value derived when
the $8,041,126 fair market value it estimated for BCC is divided
by the number of BCC shares outstanding before the redemption of
Mr. Jennings’s shares; i.e., 92,718.
8 The per-share book value for BCC reflected in Pro Forma 15
does not appear to be derived from the book value as of the
fiscal year ended Jan. 31, 1996 ($9,135,506, as reflected in the
(continued...)
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