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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.
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