- 18 -
After his 1995 valuation, sometime around 1999-2000, Mr. Kramer
advised petitioners to hire a certified appraiser.
On April 5, 2000, Rance, as president of Beneco, retained
Management Planning, Inc. (MPI), to prepare economic and
financial analyses and evaluations of Beneco, and three limited
partnerships (Jireh, Mustard Seed, and Zerubbabel) for a fee of
$12,500. Mr. Koehl of MPI transmitted by a letter dated November
19, 2001, an evaluation of the “common stock of Beneco, Inc.,” as
of March 31, 2000, concluding that the aggregate freely traded
equity capital of Beneco had a value of $9,195,000.
Mr. Koehl opined that the average lack of marketability
discount for private placements of nonpublicly traded stocks was
27.5 percent, and he decided to use a lack of marketability
discount of 7.5 percent because he was valuing a controlling
interest. Mr. Koehl concluded that the outstanding common stock
of Beneco had a fair market value of $8.5 million (or $8,500 per
share, based on 1,000 shares issued and outstanding) as of March
31, 2000, on a going-concern controlling-interest basis. Mr.
Koehl and MPI did not prepare a separate valuation of
petitioners’ limited partnerships, Jireh, Mustard Seed, or
Zerubbabel. Mr. Koehl’s valuation of Beneco contained the
statement that it was prepared for management information, income
tax reporting, and other corporate purposes. Mr. Koehl’s
valuation did not contain a date for any contributions of an FLP
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: March 27, 2008