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D3@ D-@ 0K@ 0JA ASBkB 01C 0DC AD 06D 0D 0:F 0^qGU*GGGGGGGGGGGGGGGGGGGGGGGGGGG 1uG 72NHHP LaserJet 4250 PCL 60ʉ3  (`$.8dd8    ("  Z6Times New Roman Regular=M3:i+00 C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|xU   сLevel 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5(#$  0    R$      1    _FranklincorrectlynotesthatthiscourterroneouslystatedinitsopinionfiledonNovember29,2005thatthe  partiesdonotdisputetheproprietyoftheblockdiscount.Tothecontrary,Franklindidindeeddisputetheproprietyof t thediscountinitsbrief.#~#  R$      4    _X}X#XX}~#Franklinsbriefread, hadthesharesbeenregistered,[Franklin]couldhavedistributedthesharestoitslimited  partnerswhocouldhavesoldthesharesthemselves....(SeetheAppelleesBriefsubmittedbyFranklin,atpage45).(9 Z6Times New Roman Regular  R$      2    _$1,963,219.50istheproductof890,349sharesmultipliedbythepricepersharereducedbythetwentyfive  percentblockdiscount.  R$      3    _Itshouldalsobenotedthatthemarketvalueofconvertedpropertyisnottheonlymeasureofdamages  recoverableinanactionforconversion.18Am.Jur.2d,Conversion116(2005).Ԁ#e#ԀThecircumstancesofthecasemay t requireadifferentstandard.Id.Rulesrelatingtothemeasureofdamagesforconversionareflexibleandcanbemodified 8 intheinterestoffairness.Id.Basedupontheevidenceintherecord,itisnotnecessarythatweconsiderotherstandards. *+ (_2623  ..*G+G (_25   /%` ` hp x /23  ../%` ` hp x /   *8+8 (_24  ," hp x ,23  ..," hp x ,  *5+5 (_23 ` ) hp x )23  ..) hp x ) ` *2+2 (_22  &hhp x &23  ..&hhp x &  */+/ (_21  #p x #23  ..#p x #  *,+, (_20 h  p x 23  .. p x h *)+) (_19  pp x 23  ..pp x   *&+& (_18   x 23  .. x   *AA (_17  5+ ` hp x 523  Ԁ5+ ` hp x 5  *GG (_16   /%` ` hp x /23  Ԁ/%` ` hp x /   *88 (_15  ," hp x ,23  Ԁ," hp x ,  - -*55 (_14 ` ) hp x )23  Ԁ) hp x ) ` *22 (_13  &hhp x &23  Ԁ&hhp x &  *// (_12  #p x #23  Ԁ#p x #  *,, (_11 h  p x 23  Ԁ p x h *)) (_10  pp x 23  Ԁpp x   (&& &_9   x 23  Ԁ x   (AA &_8  5+ ` hp x 523  5+ ` hp x 5  (GG &_7   /%` ` hp x /23  /%` ` hp x /   (88 &_6  ," hp x ,23  ," hp x ,  (55 &_5 ` ) hp x )23  ) hp x ) ` (22 &_4  &hhp x &23  &hhp x &  (// &_3  #p x #23  #p x #  (,, &_2 h  p x 23   p x h ()) &_1  pp x 23  pp x   &&& $_   x 23   x   0AA.Normal  5+ ` hp x 55+ ` hp x 5  <AA:Definition T  5+ ` hp x 55+ ` hp x 5  <AA:Definition L , 5+ ` hp x 5  5+ ` hp x 586Definition(hh&H1  5+ ` hp x 5      5+ ` hp x 5  (]]&H2  5+ ` hp x 5  5+ ` hp x 5  (]]&H3  5+ ` hp x 5  5+ ` hp x 5  (]]&H4  5+ ` hp x 5 XXX 5+ ` hp x 5  (]]&H5  5+ ` hp x 5  5+ ` hp x 5  (]]&H6  5+ ` hp x 5  5+ ` hp x 5  2DD0Address  5+ ` hp x 55+ ` hp x 5  8MM6Blockquote , , 5+ ` hp x 5   5+ ` hp x 5,*CITE,dl*CODEKh<6X9`(Courier NewKSi\  `&Times New RomanS42Emphasis64Hyperlink    <:FollowedHype    4go2Keyboard Kh<6X9`(Courier NewKSi\  `&Times New RomanS <:Preformatted  /%  ,Kk %#/Kh<6X9`(Courier NewKSi\  `&Times New RomanS/%  ,Kk %#/  <:zBottom of 7T(X7    5+ ` hp x 5?j%2A`Arial?  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"&r!% App.1988);18Am.Jur.2d,Conversion116(2005)#UXX} #X}XU.#UXX}#X}XUX}XXX}ԀFranklincontendsthemeasureofdamages '^"& forconversionrequirestheassessmentofitsdamagesatthepriceatwhichFranklincouldhave 'J#' purchasedashareofCaretenders,thesocalled#X}XXX}e##UXX}F#X}XUX}XXX}ԀNewYorkrule.(SeeHedgesv.Burke,247S.W.91 (6$( (Tenn.1922)(holdingtheplaintiffsdamagesareequaltothereplacementcost,thepriceatwhich )"%)  Oa      theplaintiffcouldhavepurchasedtheconvertedpropertyintheopenmarket)).Wefindthis  argumenttobewithoutmeritbecauseitisbaseduponafalsepremise,thatthesharesatissuewould  notbesubjecttoablockdiscount.  #X}XXX}##UXX}# X}XU X}XXX}#X}XXX}#  Thepracticeofdiscountingthevalueofthepricepershareofalargeblockofsharesina ` limitedmarketisknownasa blockdiscount.Utilizationofa blockdiscounttovaluestocks L  developedinrecognitionofthefactthatlargeblocksofstockcannotbesoldasreadilyassmaller 8  blocksofstock.SeeG.H.Fisher,Annotation,Applicationof BlockageRuleor Blockage $ t DiscountTheoryinDeterminingStockValuation,forPurposesofTaxationofIntangibles,33  ` A.L.R.2d607(2004).Blockdiscountsareoftenusedincasesinvolvingestateorinheritancetax.  L  Id.Tennesseecourtsrecognizetheblockdiscountasafactorthatmaybeconsideredwhenvaluing  8  shares.HamiltonNationalBankofKnoxvillev.Benson,444S.W.2d277(Tenn.1969);seealso $  Tenn.CodeAnn.678412(2003).     AfterdeterminingthepricepershareofCaretendersstock,thetrialcourtconsidered   uncontrovertedtestimonyastotheimpactof890,349sharesonthemarketvalueoftheshares.Paul   Mallarkey,anexpertwitnesscalledbyCaretenders,testifiedthattheblockdiscountmeasuresthe p effectonthepricepershare.Hefurtherexplainedthatablockdiscountwasappropriatewhena \ largeblockof thinlytradedstockistobesold.Mr.Mallarkeyalsoexplainedthat thinlytraded H stockisstockthatistradedinfrequentlyand/orinlowvolumes.Theevidenceestablishedthatan 4 averageweeklytradingvolumeforCaretendersstockwasapproximately100,000sharesaweek,  p whichisindicativeofamarketthatisnotpreparedtoabsorb890,349additionalsharesinabrief  \ periodoftime.Intheabsenceofareadymarketforsuchalargeblockofstock,Mr.Mallarkey H explained,themarketwoulddiscounttheprice. 4   Theevidenceestablishedthatawillingpurchaserwouldhaveagreedtopurchaseanda   willingsellerwouldhaveagreedtosell890,349ofCaretenderssharesforthediscountedpriceof  $1,963,219.50. #  2      ׀Nevertheless,Franklincontendsablockdiscountshouldnotbeapplied.This  contentionbyFranklinpresumesareasonablepurchaserwouldhaveagreedtopurchasethelarge  blockofthinlytradedstockwithoutdemandingthemarketdrivendiscount.Franklinfailedto l convincethetrialcourtareasonablepurchaserwouldconsiderthenondiscountedpricetobea X  reasonablemarketvalue.We,too,areunconvinced.Moreover,wefindthatthetrialcourtcorrectly D! consideredthespecificfactsofthiscaseindeterminingthatareasonablemarketvalueofthe 0"  890,349sharesofCaretendersstockatissuemustreflecttheblockdiscount. #  3      ׀ #l!   $X"   Asafinalcontention,Franklinsuggeststhatevenifablockdiscountcouldproperlybe   appliedonthetheorythatFranklinwouldhavehadbeensubjecttosuchadiscountonitssaleofsuch  shares,Franklin wouldhavedistributedthesharestoitsinvestors,notsoldtheshares....This,  Franklincontends,wouldhavemadetheblockdiscountinapplicable.Wedeclinetheinvitationto t analyzethistheorybecauseweviewitas_merely_Ԁhypothetical.Thetrialcourtmadeafindingitwas ` Franklinsintentiontoselltheshares,whichfindingisfullysubstantiatedbytherecord.Moreover, L  Franklinspresentcontentionisnotfullyconsistentwithitspreviousspinonthisissueinits 8  AppelleesBrief.Thoughitisoflittlelegalsignificance,itisworthnotingFranklinpreviously $ t referredtoitsproclaimedintenttodistributethesharesasa couldhavescenario;yetFranklinnow  ` suggestsit wouldhavedistributedtheshares. #  4        L    X}XXX}Therefore,wefindnoerrorwiththetrialcourtsapplicationofablockdiscount.#X}XXX}&#ԀTheX}XXX}Ԁpetition $  forrehearing#X}XXX}A'#ԀisrespectfullydeniedandcostsrelativetothispetitionareassessedagainstAppellee,   FranklinCapitalAssociates,L.P.      `     h     ___________________________________ H    `     h     FRANKG.CLEMENT,JR.,JUDGE 4