- 20 -
Therefore, we hold that a 20-percent initial marketability
discount is appropriate. We further find that an upward
adjustment of 3 percent is proper to incorporate characteristics
specific to the partnership.
E. Conclusion
On the basis of all the evidence and using our best
judgment, we conclude that a 12-percent minority discount and a
23-percent marketability discount are appropriate in valuing the
interests in KLLP. The fair market value of the 94.83-percent
limited partnership interest is $788,059 computed as follows:
Total NAV as of 12/8/99 $1,226,421
94.83 percent of NAV 1,163,015
Less: 12-percent minority interest discount (139,562)
1,023,453
Less: 23-percent marketability discount (235,394)
FMV of 94.83-percent interest 788,059
We conclude that the fair market value of the 33.33-percent
interest in KLBP LLC, the sole asset of KLBP LLC being a 1-
percent general partnership interest in KLLP, is $2,770 computed
as follows:
Total NAV as of 12/8/99 $1,226,421
33.33 percent of 1 percent of NAV 4,088
Less: 12-percent minority interest discount (491)
3,597
Less: 23-percent marketability discount (827)
FMV of 33.33 percent of 1-percent interest 2,770
To reflect the foregoing,
Decision will be entered
under Rule 155.
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