Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 50

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          agreements entered into by unrelated parties at arm’s length in             
          similar businesses.  In the instant case, the estate must                   
          demonstrate that the terms of the Modified 1981 Agreement are               
          similar to terms in agreements entered into by unrelated parties            
          in businesses similar to that of BCC.                                       
               The only evidence proffered by the estate on this point was            
          the expert report and testimony of Mr. Grizzle.  Mr. Grizzle                
          opined that the terms of the Modified 1981 Agreement were                   
          comparable to similar arrangements entered into at arm’s length             
          within the meaning of section 2703(b)(3) because the price                  
          provided in the agreement for decedent’s BCC shares was fair                
          market value.27  His conclusion regarding BCC’s fair market value           
          was based upon an income approach in which he postulated that               
          BCC’s value was equal to a multiple of four times earnings.  He             
          claimed that such a multiple was commonly used to value                     
          construction companies by those knowledgeable about the industry.           
          He further claimed that such a multiple was implicit in the sale            
          prices for three purportedly comparable companies he examined.              
          He did not present evidence of other buy-sell agreements or                 
          similar arrangements, where a partner or shareholder is bought              


               27 Mr. Grizzle opined that $4 million was a fair market                
          value price for the shares as of either the date of execution of            
          the 1996 Agreement (Nov. 11, 1996) or the date of decedent’s                
          death (Sept. 21, 1997).                                                     






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