- 21 - or separation. This yielded a total company income-based value of $5,803,163. Mr. Fodor used the capitalized excess earnings method to determine that BCC’s asset-based value equaled $8,678,805 as of the valuation date. Mr. Fodor then subtracted from the net asset value the $750,000 estimate of the obligation to repurchase BCC shares from ESOP participants to reach a final asset-based value of $7,928,805. Mr. Fodor weighted the income-based value of $5.8 million at 75 percent and the asset-based value of $7.9 million at 25 percent, to yield a final blended value of $6 million (rounded) for 100 percent of the shares of BCC. Multiplying this value by decedent’s 83.2-percent interest in BCC resulted in a corresponding $4,992,537 fair market value for decedent’s 43,080 shares, as of the valuation date. Mr. Fodor did not include the life insurance proceeds BCC received on decedent’s life in either his income- or asset-based approach on the grounds that those proceeds were offset by BCC’s obligation to redeem decedent’s BCC stock. Nor did he apply any discounts or premiums in valuing the block of shares at issue. C. Respondent’s Expert, Mr. Hitchner Mr. Hitchner is accredited in business valuation with the American Institute of Certified Public Accountants and is anPage: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Next
Last modified: May 25, 2011