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“Fair value” in minority stock appraisal cases is not
equivalent to “fair market value”. Swope v. Siegel-Robert, Inc.,
243 F.3d 486, 492-493 (8th Cir. 2001); Union Ill. 1995 Inv. L.P.
v. Union Fin. Group, Ltd., 847 A.2d 340, 355 (Del. Ch. 2003); see
Cavalier Oil Corp. v. Harnett, 564 A.2d 1137 (Del. 1989); see
also JPMorgan Chase & Co. v. Commissioner, 458 F.3d 564, 569 (7th
Cir. 2006), affg. in part, vacating in part and remanding Bank
One Corp. v. Commissioner, 120 T.C. 174 (2003). In Del. Open MRI
the court of chancery used a method to estimate the fair merger
price that considered the difference between the value that a
stockholder of Delaware Radiology would receive in Delaware
Radiology as a C corporation and the value that a stockholder
would receive in Delaware Radiology as an S corporation and
applied a type of tax-affecting. Id. at 327. However, the court
of chancery did not decide the price that a hypothetical willing
buyer would pay a hypothetical willing seller, both having
reasonable knowledge of all the relevant facts and neither being
under compulsion to buy or to sell that we use in this case.
d. Conclusion
We conclude that there is insufficient evidence to establish
that a hypothetical buyer and seller would tax-affect DGA’s
earnings and that tax-affecting DGA’s earnings is not
appropriate.
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