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taxes,14 constituted a fair price for decedent's FABG stock,
including the Hill Rights.
In addition to satisfying itself that the $118 price was
fair, the conservator also believed the 1994 Agreement was in
decedent's best interest because, in the conservator's judgment,
it was imprudent for such a substantial portion of decedent's net
worth to be held in the form of a minority interest in a closely
held bank. This concern was exacerbated by the merger of Agri
into FABG, which transformed decedent's holdings into an even
smaller minority interest in a venture with unfamiliar
management. In the conservator's view, the 1994 Agreement's
guarantee of a fixed price and buyer for decedent's FABG shares
established a hedge against decedent's downside risks of holding
a minority interest. The conservator also concluded that the
1994 Agreement benefited decedent by securing a right to defer
sale until after death to avoid capital gains taxes and to ensure
liquidity for decedent's estate to pay estate taxes.
14 Decedent's right under the 1991 Agreement to defer the
sale of her bank stock until after death contained an exception.
Whereas Agri's call option on decedent's stock under the 1991
Agreement was generally effective only upon decedent's death, in
the event of a sale of the controlling interest in Agri, the
purchaser of the controlling interest could require the immediate
sale of decedent's Agri shares. Thus, the 1994 Agreement secured
decedent's right to a postdeath sale of her bank stock, even
though the controlling interest in Agri had been sold.
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