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Respondent’s argument ignores the evidence. None of the
parties who testified believed that there had been a significant
change in Huber’s finances since the last valuation, and those
parties demonstrated their independent knowledge of Huber’s
worth. Further, we do not find the time lapse in this case to be
unreasonable. See Hooker Indus. v. Commissioner, T.C. Memo.
1982-357 (crediting a single sale of stock as “best criteria of
market value” even though it relied on an appraisal that was 13
months old).
Respondent argues that the parties were not reasonably
informed because they did not see a copy of the E&Y report. This
narrow argument fails to address that the shareholders of Huber,
including the ones who testified, regularly received reports from
Huber, discussed the company with its CEO, attended shareholder
meetings, and participated on Huber’s board of directors and its
committees. Further, one of the buyers of the stock from the
Brown estate, Mr. Brooke, testified that he did see the E&Y
report. Whether the shareholders actually saw the report does
not influence our conclusion that the parties were well informed
because the modus operandi of Huber gave plenty of opportunity
for shareholders to educate themselves about the company and the
E&Y methodology, and the evidence shows that many of the parties
to the sales at issue in fact did just that.
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