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value approaching $1.375 billion. Assuming a fiduciary duty,
Barclay opined that the management authority would have a value
of 40 percent of $1.375 billion.
Referring to Bradley’s report, petitioner asserts:
Respondent’s valuation approach caused his experts to
value rights that did not exist: common stock in an
entity managed by an unrelated, hostile manager, and a
management authority giving unconstrained powers to an
unrelated, hostile manager. Respondent’s experts
assumed a hypothetical transaction with no resemblance
to the actual transaction or rights. * * *
Petitioner claims that the management authority was an
uncompensated obligation, not an asset, assigned to Times Mirror
as the “residual claimholder” of the LLC’s assets.
It is indeed unlikely that the authority of Times Mirror
under the management agreement would be separated from TMD’s
ownership of the MB Parent common stock in the real world.
However, separation of the management authority from the putative
holder of the cash is part of the structure adopted by Times
Mirror so that it could maintain its position that the only
consideration received by TMD in the Bender transaction was the
MB Parent common stock. Times Mirror and its advisers created
the scenario that makes it necessary to value the MB Parent
common stock at least as a portion of the total consideration.
To support its statutory argument, petitioner is asking us to
give effect to a fictional separation of the MB Parent common
stock transferred to TMD from the management authority
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