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On November 11, 1996, decedent and BCC executed an agreement
entitled “Shareholders Agreement” (the 1996 Agreement), with
decedent signing in his individual capacity and on behalf of BCC
as its president. Mr. Truono attested decedent’s signature. The
1996 Agreement required BCC to buy, and decedent’s estate to
sell, decedent’s BCC shares for $4 million; i.e., the maximum
price Mr. Truono believed BCC could pay in cash, taking into
account BCC’s receipt of approximately $3 million in life
insurance proceeds from the policy on decedent’s life. The next
day decedent executed a codicil to his will. Decedent did not
consult an attorney regarding the 1996 Agreement.
Given his review of Mr. Truono’s Pro Forma 15, decedent was
aware when he signed the 1996 Agreement setting the price for his
shares as $4 million ($92.85/share) that the most recent BVS
appraisal had valued BCC at approximately $8 million
($155.32/share), suggesting that decedent’s shares had a fair
market value of approximately $6.7 million. Decedent was further
aware that Mr. Truono had computed BCC’s book value to be
approximately $9 million, suggesting that decedent’s BCC shares
had a book value of approximately $7.5 million. The unmodified
8(...continued)
1996 BVS appraisal), since 51,772 outstanding shares at a total
book value of $9,135,506 would yield a per-share value of
$176.46. Instead, the figure used in Pro Forma 15 appears to be
a mid-year estimate of BCC’s per-share book value.
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