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none of the shareholders had a buyback agreement with CCC
allowing them to have their shares redeemed, the minutes of CCC’s
board of directors indicate that the corporation did maintain a
sufficient cash position in the event that the estate requested
redemption of its shares. This, however, does not show that
there is a public market for these shares, nor does it show that
a hypothetical willing buyer would have a market for these
shares.
We disagree with some of Mr. Shaked’s analysis of the
factors from the Mandelbaum case. The holding period of the CCC
stock is different from the holding period of the underlying
assets. Therefore, we find unfounded Mr. Shaked’s assertion that
the holding period of CCC stock is trivial because it can
liquidate its assets (stock holdings). In addition, Mr. Shaked’s
discussion of the marketability of the underlying assets presents
a different question from the marketability of CCC. An owner of
CCC stock cannot purchase and sell securities in CCC’s portfolio.
Finally, the estate is correct in noting that consideration of
the public offering factor should bear on the costs incurred if
the company decided to go public. See Mandelbaum v.
Commissioner, T.C. Memo. 1995-255. Therefore, Mr. Shaked’s
analysis on this factor was somewhat flawed.
Both parties make critical errors in their assumptions and
analysis concerning the appropriate marketability discount. We
generally find their analysis to be only minimally helpful, and,
accordingly, we use our own analysis and judgment, relying on the
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