Herbert V. Kohler, Jr., et al. - Page 33

                                        -33-                                          
          plan model only 20 percent under the income approach, despite the           
          admonitions of management that the operations plan projections              
          were only what could be created in a perfect environment while              
          the management plan forecasted realistic, achievable targets.               
               In addition, Dr. Hakala did not use a dividend-based method            
          under the income approach, although the record reflects that                
          periodic dividends were the primary means of obtaining a return             
          on Kohler stock due to the privately held nature of the company.            
          When asked why he did not use the dividend method at trial, Dr.             
          Hakala argued first that the DCF analysis made other income                 
          approaches redundant and then stated that dividend-based methods            
          were unreliable.  We are concerned by Dr. Hakala’s choice to                
          ignore any dividend-based method for Kohler, a privately owned              
          company that periodically and historically has paid large                   
          dividends as a return to its shareholders, recognizing that no              
          ready market exists for a shareholder wishing to sell.                      
               We found after the estate’s case in chief that respondent              
          has the burden to prove that the value of the Kohler stock on the           
          estate’s return was incorrect.  After carefully reviewing and               
          considering all of the evidence, we continue to find Dr. Hakala’s           
          conclusions to be incredible.  We therefore give no weight to               
          respondent’s expert’s conclusions.  Respondent has therefore not            
          met his burden of proof.  Accordingly, we find the value of the             







Page:  Previous  23  24  25  26  27  28  29  30  31  32  33  34  35  36  37  38  39  40  41  42  Next

Last modified: May 25, 2011