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petitioner would earn some future rental income from leasing it.
He based this claim upon 1994 and 1995 discussions with Raynault.
Raynault stated that during the early 1990s there had been some
experience of continued use for a few years following the end of
an initial lease term. As a result, Svoboda concluded that
petitioner’s prospect of realizing equipment rental income from
the Shared equipment during the residual lease period was
“speculative” but possible. We agree that Svoboda’s conclusion
is speculative and without support in the record. We note that
Shared had no commitment to use the equipment beyond the end of
the existing lease (March 29, 1997), and no other prospective
lessee had been identified. Significantly, Svoboda’s opinion
that there was potential for rental income is contradictory to
his recognition that the equipment would then have exceeded its
commercial useful life and be technologically obsolete.
Svoboda’s conclusion is inconsistent with traditional
definitions of “fair market value”. Under traditional willing-
buyer-willing-seller tests, lack of value and relatively minimal
utility are relevant facts in valuation. Svoboda’s valuation did
not take into account these highly relevant factors. In that
regard, the record reveals that technology changes for this type
of equipment can render it obsolete.
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