Apr 1, 2007 12:00 PM

The purpose of this letter is to address the February 2007 article “The Preferred Method” by Lance M. Hall. In that article, Hall not only claims that his firm's restricted stock study is the “preferred method” for determining marketability discounts, he also admonishes attorneys to employ business appraisers who use his study (which, itself, should make an objective reader suspicious.) Hall says, “The battle began in earnest more than 40 years ago: How do we determine discounts for lack of marketability (DLOM)? … the courts finally declared a winner: the restricted stock comparative analysis … Attorneys should be very certain that their appraisers use the restricted stock comparative analysis.”

But neither the courts nor the business appraisal profession have prescribed a “preferred method” in the determination of marketability discounts.

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