EFTA Document EFTA01459105

From: Paul Morris Sent: 12/14/2015 9:55:55 PM To: 'Jeffrey Epstein' [email protected] Subject: FW: The FMV Valuation Alert - Sumner Redstone v. Commissioner Message--- From: Lance S. Hall, ASA Sent: Monday, December 14, 2015 08:10 PM Eastern Standard Time To: Paul Morris Subject: The FMV Valuation Alert - Sumner Redstone v. Commissioner Please click here if you cannot view this page. a A Tale of Two Brothers: (A Deceased Brother's Revenge) (Sumner Redstone v. Commissioner LW By Lance S. Hall, ASA* A few weeks ago, the Tax Court released its decision in the case of Edward Redstone v. Commissionerill. While the Tax Court agreed with Edward, it disagreed in a later decision involving Edward's brother, Sumner - arguments about similar facts, but with a haunting twist of beyond the grave revenge. Background' In the mid 1960s, Edward owned a one-third interest in National Amusement, Inc. ("NAI") along with his brother, Sumner, and his dad, Mickey. Later, Mickey exchanged his interest for preferred stock and gave a 20% voting interest to the Grandchidren's Trust. This left Edward and Sumner with a 40% voting interest .L41 Edward was given the responsibilty of running the back office operations and property development, while Sumner had the more glamorous responsibility of dealing with the movie studios for NAI's theater operations. As often happens, Edward felt marginalized by his more well- known, and capable, brother. When Sumner "hired Jerry Swedrow to take over Edward's responsibilities" in the family business, Edward became "incensed" and quit NM. Upon leaving, Edward demanded that he be bought out, or he would sell his shares to an unrelated party. Mickey, desiring to keep the family business within the family, thwarted any possible sale to an outsider by refusing to give Edward his stock certificates. As the reason for not providing Edward with his stock certificates, Mickey argued that there was an oral agreement that some of the stock was for the benefit of Edward's children, and not for Edward. To bolster this argument, Mickey pointed out that he had contributed 48 percent of NAI's capital and had only received 33 percent of its stock. The differential, according to Mickey, was what he contributed to Edward's and Sumner's children by oral agreement (the "oral trust"). While contentious negotiations proceeded, Mickey refused to allow the shares to be sold to an CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0119339 CONFIDENTIAL SONY GM_00265523 EFTA01459105