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as more fully discussed below we conclude that he has not shown
that a $750,000 downward adjustment in BCC’s value is required to
account for the obligation to repurchase BCC shares held by BCC’s
ESOP participants. With respect to Mr. Hitchner, while we agree
with his analysis that BCC held cash and cash equivalents in
excess of business needs, and that such “excess cash” should be
accounted for as a nonoperating asset, we conclude for the
reasons outlined below that he overestimated the amount of BCC’s
excess cash by approximately $400,000, which caused his figure
for BCC’s nonoperating assets (exclusive of life insurance
proceeds) to be overstated by that amount. Because, under Mr.
Hitchner’s approach, nonoperating assets were added to
capitalized earnings to derive an income-based value, Mr.
Hitchner’s income-based value is likewise overstated by
approximately $400,000 as a result of his overestimate of BCC’s
excess cash.
2. Mr. Fodor’s Adjustment for ESOP Repurchase Obligation
Mr. Fodor adjusted both his income- and asset-based values
downward by $750,000 to account for the obligation to repurchase
BCC shares held by BCC’s ESOP participants. Mr. Fodor derived
his $750,000 estimate of the present value of the obligation to
repurchase the ESOP participants’ shares by adopting the $750,000
estimate of BCC’s liability in the event of an ESOP plan
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