-12-
prices, up to $135,000 per share in some cases. A portion of the
settlement price was attributable to settling the dissenters’
claims for breach of fiduciary duty.
The estate, which owned 12.85 percent of the voting stock
before the reorganization, could not have blocked or approved the
reorganization on its own. The estate opted to receive new
Kohler shares in the reorganization rather than accept cash.
After the reorganization, the estate owned 14.45 percent of the
outstanding shares of Kohler stock. The estate owned a greater
percentage of Kohler after the reorganization than before because
the nonfamily shareholders had been cashed out. The block of
stock the estate owned was not sufficient by itself to vest the
estate with the power to change management, change the board of
directors, or amend the articles of incorporation.
Valuation of Kohler Stock on the Estate Tax Return
The estate consisted of primarily cash, some securities and
personal effects, and the Kohler stock. Natalie, as personal
representative of the estate, retained Willamette Management
Associates (WMA) to value the Kohler stock the estate owned.
Natalie selected WMA for several reasons. WMA had periodically
appraised the company for various purposes in the past and knew
the company and its business already. Natalie was also impressed
by WMA’s national reputation and WMA’s connection to Shannon
Pratt, who wrote a well-known book on appraisals entitled
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011