Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 78

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          assets, than companies in the SIC group most closely                        
          approximating BCC.39  In these circumstances, we are persuaded              
          that adding the value of nonoperating assets, including life                
          insurance proceeds, to capitalized earnings, as Mr. Hitchner                
          proposed, is an appropriate measure of BCC’s income-based                   
               Because BCC had positive net assets, treating the life                 
          insurance proceeds as a nonoperating asset also produces an                 
          increase in the asset-based value of BCC, equal to the amount of            
          the proceeds, under all three asset-based approaches employed by            
          the experts herein.  Thus, because the life insurance proceeds              
          are added in both the income- and asset-based approaches, they              
          result in an increase in the final blended value of BCC equal to            
          the amount of the life insurance proceeds, regardless of the                
          respective weights given to the income- or asset-based approach.            
          Accordingly, we are persuaded that Mr. Hitchner was correct in              

               39 Although we concluded supra at Pt.II.C.3. that Mr.                  
          Hitchner overestimated the extent of BCC’s excess cash, after our           
          adjustment BCC’s excess cash on the valuation date was still                
          approximately $1.5 million.                                                 
               40 We note that even if we were to adopt Mr. Fodor’s                   
          proposal regarding the necessary additions to capitalized                   
          earnings to derive an income-based value, the life insurance                
          proceeds would still be added to capitalized earnings, and the              
          income-based value would increase dollar for dollar.  Had he not            
          offset the life insurance proceeds with BCC’s obligation to                 
          redeem decedent’s shares, those proceeds would have been an                 
          addition to net working capital, which Mr. Fodor added to BCC’s             
          capitalized earnings in calculating an income-based value.                  

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