- 35 -
negotiations in an effort to avoid the expense to decedent of
future litigation with FABG over the price to be paid for
decedent's shares as enhanced by the Hill Rights.26 These
negotiations produced the 1995 FSA, under which decedent's stock
effectively would be sold to the Rod Amlie Family at her death
for the same price as FABG had offered in the 1994 Agreement (the
$118 price), and the Rod Amlie Family would pursue whatever price
it could obtain for the stock from FABG, at the Family's risk and
expense.
We are persuaded that the conservator, in securing the 1995
FSA, was seeking to exercise prudent management of decedent's
assets by mitigating the very salient risks of holding a minority
interest in a closely held bank, consistent with the
26 We agree with the conservator's view that decedent and/or
her estate faced significant litigation hazards in this regard.
We believe FABG possessed leverage on the basis of the 1991
Agreement provision under which decedent was required to sell her
minority stake to any purchaser of the controlling stake if the
purchaser conditioned his purchase of the controlling stake on
his acquisition of decedent's shares. Also, an official of FABG
testified in the proceedings concerning approval of the 1994
Agreement 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. (This call option was exercisable at
decedent's death, and decedent was 92 at the time of the
proceedings concerning the 1994 Agreement.) Finally, further
negotiations and/or litigation with FABG jeopardized the
conservator's goal of avoiding capital gains taxes on the sale of
decedent's FABG stock. See supra note 25.
In addition, we are persuaded that the value of the Hill
Rights was especially uncertain, in light of the FACC option, the
value of which was the subject of conflicting expert testimony in
the district court proceedings concerning approval of the 1994
Agreement.
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