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BCC’s annual contributions to the ESOP (which he elsewhere
accounted for as a deduction against earnings to be capitalized)
would be insufficient to satisfy some or all of the ESOP
repurchase obligation. Indeed, Mr. Truono testified that the
ESOP repurchase obligation had never exceeded $100,000 in any
year.
In sum, Mr. Fodor’s failure to address the foregoing issues
leaves us unpersuaded of his claim that BCC’s annual ESOP
repurchase obligation requires a $750,000 downward adjustment to
either the income- or asset-based valuation methods he chose.33
Instead, we are persuaded that, under the facts presented here,
Mr. Hitchner was correct in his position that any ESOP repurchase
obligation did not warrant the adjustments of the sort Mr. Fodor
advocated.
Because Mr. Fodor’s $750,000 adjustment led to a dollar-for-
dollar decrease in both his income- and asset-based values, the
adjustment led to a dollar-for-dollar decrease in his final
blended estimate of BCC’s value. Correcting Mr. Fodor’s
treatment of the ESOP repurchase obligation to remove the
33 Because of these shortcomings in Mr. Fodor’s analysis of
the need for an adjustment to account for an ESOP repurchase
obligation, we do not reach the separate question of whether Mr.
Fodor’s report may rely upon the 1997 BVS appraisal’s $750,000
figure without qualifying that appraisal as expert testimony.
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