Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 114

                                        -194-                                         
          “Escape from Venice”, “Equinox”, “Mother & Daughter: Loving War”,           
          “Nasty Hero”, “Outlaw Force”, “Sticks and Stones”, “Throne of               
          Vengeance”, “War Cat”, and “Zombie”.143  On the record before us,           
          we believe that the absence of physical materials for these film            
          titles is a fact that was reasonably discoverable on December 11,           
          1996.  We also believe that the hypothetical willing buyer would            
          not have paid for rights to film titles that did not have                   
          confirmed physical materials.  Consequently, our valuation of the           
          EBD film library does not account for the 13 film titles that Mr.           
          Wagner identified as not having confirmed physical materials.               
               In making his scenario 2 projections, Mr. Medress excluded 9           
          film titles, including:  “Bombay Talkie”, “Courtesans of Bombay”,           
          “Danger Zone”, “Hullabaloo Over Georgia”, “Hunter’s Blood”,                 
          “Mother & Daughter: Loving War”, “Octavia”, “Shakespeare Wallah”,           
          and “Sticks and Stones”.144  An internal memorandum that Troy &             
          Gould prepared during its due diligence confirms that the                   
          distribution rights to those film titles were set to expire                 

               143 Mr. Wagner made no sales projections for the film titles           
          “Escape from Venice” and “Equinox”, because those film titles               
          were not included in the IMDb database.  In addition, Mr. Medress           
          treated the film titles “Return of the Conqueror” and “Throne of            
          Vengeance” as the same film in making his scenario 2 projections.           
          From other information that Mr. Medress submitted, it also                  
          appears that the film titles “Equinox” and “The Beast” may be the           
          same film.                                                                  
               144 We have already excluded the film titles “Bombay Talkie”,          
          “Courtesans of Bombay”, “Mother & Daughter: Loving War”, and                
          “Sticks and Stones” because of the absence of confirmed physical            
          materials for those film titles.                                            





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