Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 135

                                        -213-                                         
          stock could have a value between $3 million and $5 million.  We             
          place little reliance on that report.  In the first instance, the           
          Harch Capital report was not offered into evidence for the truth            
          of the matters asserted therein.  The Harch Capital report is a             
          4-paragraph, 1-page document, which contains no analysis or                 
          explanation regarding the valuation figures.  Harch Capital                 
          states:  “we are aware that Carolco is in bankruptcy and that               
          claims have been made with respect to the instruments in                    
          question”, but otherwise suggests that it did not factor into its           
          “valuation”, any of the plans of reorganization that were filed             
          in the bankruptcy court.  In fact, the date of the report is the            
          same date that the second plan of reorganization and its attached           
          disclosure statement were filed with the bankruptcy court.                  
               Petitioner also relies on the fact that shares of Carolco              
          stock were trading in the market on December 11, 1996, and have             
          continued to trade until the trial date.  According to a rebuttal           
          report that Mr. Wagner submitted, 61,000 shares of Carolco stock            
          were traded on December 11, 1996.  That report reveals, however,            
          that Carolco stock was trading at $0.002 per share on that date.            
          In considering this trading, Mr. Wagner opined that the value of            
          the Carolco securities was “greater than zero.”  Mr. Wagner makes           
          no effort to place any more precise value on the Carolco                    
          securities, and he fails to explain how this market trading                 
          equates with any possible recovery by SMHC on those securities.             






Page:  Previous  203  204  205  206  207  208  209  210  211  212  213  214  215  216  217  218  219  220  221  222  Next

Last modified: May 25, 2011