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The Brown Estate Transactions
Ellen Mertens Brown, a third-generation descendant of J.M.
Huber, died in 1992. At her death, Mrs. Brown owned over 300,000
Huber shares. Mrs. Brown’s son, Bruce Seely, and her stepson,
George Brown, were named as coexecutors of the Brown estate. The
coexecutors intended to sell some of Mrs. Brown’s shares of Huber
in order to pay the estate tax. Since the value of the shares
had not been finally determined for Federal estate tax purposes,
the coexecutors obtained from the Internal Revenue Service (IRS)
a series of five 1-year extensions to pay the estate tax. In
mid-1997, the coexecutors settled the estate tax issues with the
IRS and agreed upon the payment date of March 16, 1998, for the
estate tax liability.
In the fall of 1997, Mr. Seely, who was also a Huber family
member, sought to raise the necessary funds to satisfy the estate
tax liability by selling the Brown estate shares held in Huber.
Mr. Seely understood that he owed fiduciary duties to the Brown
estate’s beneficiaries (of whom he was one) to get the best price
for the estate’s Huber shares. Mr. Seely was familiar with E&Y’s
valuation and received an overview of its report annually. In
addition, Mr. Seely attended Huber’s annual shareholder meetings,
served as a nonvoting director, and received Huber’s quarterly
reports, operating plan, and budget. In October 1997, Mr. Seely
and Mr. Brown, as coexecutors of Mrs. Brown’s estate, sold 52,796
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