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When the conservator sought approval of the district court
to enter into the 1994 Agreement, Rod (alone among the
prospective heirs) filed formal objections in which he claimed,
inter alia, that the proposed $118 price for decedent's FABG
stock failed to compensate adequately for the Hill Rights and
could result in a potential loss to decedent's estate of more
than $500,000. Pursuant to Iowa law, decedent's prospective
heirs received notice regarding all aspects of the proceedings
concerning approval of the 1994 Agreement.
A hearing was held at which conflicting expert testimony
concerning the fairness of the $118 price was received. The
experts' fundamental difference centered on the present value of
the FACC option given to Mr. Hill. The conservator's expert
contended that the present value of Mr. Hill's FACC option was
negligible, whereas the expert proffered by Rod testified that
the FACC option was worth as much as $500,000 (about $85 per
share). A representative of FABG testified that rejection of the
1994 Agreement would lead to further litigation, that decedent
would not be offered any option comparable to Mr. Hill's FACC
option, and that, if the 1994 Agreement were rejected, FABG would
take the position that it was entitled, as Agri's successor, to
purchase decedent's stock pursuant to the call option in the 1991
Agreement for book value.
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