- 44 -
outstanding produces a per-share value of $176.46, which yields a
book value for decedent’s 43,080 shares of approximately $7.6
million, not the $4.2 million contended by the estate.25
Similarly, when the estate contends that the 1996 BVS
appraisal suggested that the fair market value of decedent’s BCC
shares was $3,736,242, its calculation is likewise based on the
erroneous assumption that BCC had 92,718 shares outstanding as of
November 1996. Thus, the estate’s argument overlooks the
redemption of Mr. Jennings’s shares and incorrectly assumes a
per-share fair market value of $86.73. Taking the redemption of
Mr. Jennings’s shares into account yields a per-share fair market
value of $155.32, the same figure BCC’s controller, Mr. Truono,
used in his November 1996 analysis of BCC’s financial condition
(i.e., Pro Forma 15). Using this corrected figure to calculate
24(...continued)
Jennings’s estate for the redemption of his shares in September
1996, BCC had received approximately $3 million in life insurance
proceeds upon Mr. Jennings’s death, which essentially offset the
foregoing transfers for purposes of book value.
25 Even if the 1981 Agreement were interpreted to require
the calculation of BCC’s per-share book value as of Jan. 31,
1996, using the number of shares outstanding at that date, i.e.,
92,718, resulting in a purchase price of approximately $4.2
million (as the estate contends), the 1996 modification would
still have produced a non-de minimis change in the value of
decedent’s rights because the per-share price for decedent’s
shares under the 1981 Agreement would have automatically adjusted
at the close of the fiscal year ended Jan. 31, 1997, to reflect
the reduction in outstanding shares to 51,772 after the
redemption of Mr. Jennings’s shares.
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