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We agree that as of the valuation date a repurchase by
Reliance was reasonably foreseeable. Reliance’s repurchase plan
had been in place for several years. Reliance had a track record
for repurchasing a significant number of shares. Hannah, 10 days
prior to the valuation date, had stated publicly that Reliance
would favorably consider repurchasing Reliance shares at
approximately $19 a share, although Hannah did not indicate how
many shares Reliance might be willing to repurchase. We
disagree, however, that it was reasonably foreseeable that
Reliance would repurchase 50 percent of the estate’s Reliance
shares.
As of the valuation date, Reliance was negotiating a large
company acquisition which, if successful, would have required
significant cash and credit. Considering that the potential
acquisition would have stretched Reliance’s financial capacity,
we do not believe it reasonably foreseeable, as of the valuation
date, that Reliance would repurchase 50 percent of the estate’s
Reliance shares.
Of significance also is the fact that the largest prior
Reliance repurchase was the October 1998 series of stock
repurchases totaling 646,200 shares for $11,090,017. The
repurchase of 50 percent of the estate’s Reliance shares would
have cost Reliance approximately three times as much as the
October 1998 repurchases.
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