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directors established the $19.35 per share repurchase price, but
trial testimony indicates that management took into account
advice from DLJ to the effect that the Reliance stock repurchase
price should reflect a 10 to 15 percent discount from the trading
price of the stock.
At the same meeting, in order to fund the authorized
$50 million repurchase of Reliance stock from the estate, the
Reliance directors authorized, pending bank approval, increasing
Reliance’s existing credit line by $50 million -- from $200
million to $250 million.
On October 30, 2000, after receiving the $50 million
increase to its credit line, Reliance privately repurchased 2.27
million shares of the estate’s Reliance stock at $19.35 per
share, for a total price of $43,924,500. The 2.27 million shares
repurchased by Reliance represent 63 percent of the estate’s
3,601,267 Reliance shares.
Federal Estate Tax Return, Audit, and Valuation Reports
On September 5, 2001, the estate’s Federal estate tax
return was timely filed.
In connection with the preparation of the above estate tax
return, the estate’s attorney retained Gregory Range (Range) to
value the estate’s Reliance shares. In his report dated
November 13, 2000, Range concluded that the value at which the
estate’s Reliance shares should be included in decedent’s gross
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