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machinery and equipment by 40 percent to reflect the opinion of
BCC management that BCC’s machinery and equipment could be sold
for only about 60 percent of the value reflected in the “value in
use” analyses. Rather than attempting to compute asset values as
of the valuation date, Mr. Hitchner provided value estimates as
of the fiscal yearends immediately before and after the valuation
date. The values estimated under the adjusted book value
approach were $8,891,024 and $8,478,254 for the fiscal years
ended January 31, 1997 and 1998, respectively. The values
estimated under the modified adjusted book value approach were
$7,596,838 and $7,052,766 for the fiscal years ended January 31,
1997 and 1998, respectively. As with the income approach, Mr.
Hitchner did not reduce the asset-based value to reflect any ESOP
repurchase obligation. He also did not indicate a final value
under either approach.
To determine a final value for BCC, Mr. Hitchner indicated
that he gave the greater weight to the modified adjusted book
value approach and equal but lesser weight to the income approach
and the adjusted book value approach. He did not disclose the
precise weighting for each approach. Rather, he presented a
“concluded” value of $7 million.
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