-2-
report as T.C. Memo. 1998-35 (Trompeter I). In Trompeter I, we
set forth findings of fact as to the substantive issues arising
from the notice of deficiency, and we set forth our Memorandum
Opinion with respect to those issues. Subsequently, on
July 22, 1998, we issued a Supplemental Opinion in this case and
filed that Supplemental Opinion as 111 T.C. 57 (Trompeter II).
Our Supplemental Opinion in Trompeter II decided the parties’
disagreement over the mechanics of their computations under Rule
155.1 On March 18, 1999, we entered our decision in this case.
Through an opinion dated January 30, 2002, and reported at
279 F.3d 767, the Court of Appeals for the Ninth Circuit vacated
our decision and remanded the case to us to “articulate
sufficiently the basis for * * * [our] ruling on omitted assets
and * * * [our] rationale with respect to the valuation of
certain stock”. Id. at 769. Specifically, the court directed us
to clarify: (1) The manner in which we arrived at a $4.5 million
figure for omitted assets, including a description of the assets
and the related fair market values which were included within
that figure, (2) our reasoning and analysis behind the use of a
4-percent discount rate in valuing the series A exchangeable
preferred stock (series A preferred stock) of Sterling Holding
Co. (Sterling), and (3) the “well accepted present value
1 Rule references are to the Tax Court Rules of Practice and
Procedure. Unless otherwise indicated, section references are to
the applicable versions of the Internal Revenue Code.
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