-26-
shareholder. The fact that decedent’s specific 11.6-percent
interest may have included a unique attribute that added value to
that interest vis-a-vis another 11.6-percent interest in Glenwood
Bank does not detract from the fair market value of decedent’s
interest. That attribute would continue to be retained by the
hypothetical buyer in our analysis following our hypothetical
sale just as it had been retained by decedent at the time of her
death.
Moreover, as to petitioners’ argument, we are unpersuaded by
the evidence at hand that Glenwood was a strategic buyer that in
the third sale paid a premium for the 116 shares. The third sale
was consummated by unrelated parties (the estate and
Bancorporation) and was prima facie at arm’s length. In
addition, the estate declined to sell its shares at the value set
forth in the appraisal and only sold those shares 5 months later
at a higher price of $1.1 million. Although the estate may have
enjoyed some leverage in obtaining that higher price, as
suggested by Mercer by virtue of the fact that the subject shares
were the only Glenwood Bank shares not owned by the buyer, this
does not mean that the sale was not freely negotiated, that the
sale was not at arm’s length, or that either the estate or
Bancorporation was compelled to buy or to sell. In fact, Mercer
through his own analysis pegged the fair market value for those
shares as of the time of the third sale at approximately $1.9
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011