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After evaluating the history of Reliance’s repurchases and
the valuation date financial and business conditions of Reliance,
and understanding that valuation is inherently imprecise, we
conclude that, as of the valuation date, it was reasonably
foreseeable that Reliance would be financially able and willing
to repurchase 20 percent, or 720,253, of the estate’s 3,601,267
Reliance shares.
Though we find some flaws and imprecision in both steps of
Nunes’ discount methodology, neither of the estate’s experts
provided a distinct methodology for estimating a repurchase
discount. We conclude that in this case the 13.9-percent
repurchase discount used by Nunes is appropriate to utilize in
the valuation of the 20 percent of the estate’s Reliance shares
that we conclude it was foreseeable would have been repurchased
by Reliance.
Dribble-Out Method for the 2,881,014 Balance of Reliance Shares
We conclude that the 2,881,014 balance of the estate’s
Reliance shares should be valued under the dribble-out method.
The experts agree that, at the SEC Rule 144 rate of 277,860
shares per 3-month period, it would take 3.25 years (the dribble-
out period) to liquidate the estate’s 3,601,267 Reliance shares.
The experts, however, use different methodologies for discounting
the future sales proceeds to reflect the time value of money and
the risk that Reliance’s stock price might decrease during the
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