- 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 an
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011