STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

L. JUSTIN JACKMAN and HERMAN R. ) STAUDT, )

)

Petitioner, )

)

vs. ) CASE NO. 83-271

)

BANK OF CENTRAL FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings, by its duly designated Hearing Officer, Donald R. Alexander, on August 2 and 3, 1983, in Orlando, Florida.

APPEARANCES

For Petitioner: Eli H. Subin, Esquire

Post Office Box 670 Orlando, Florida 32502

For Respondent: Carl B. Morstadt, Esquire

Office of the Comptroller The Capitol, Suite 1301 Tallahassee, Florida 32301

For Intervenor- Robert D. Gatton, Esquire and Respondent: Ken C. Bishop, Esquire

2699 Lee Road, Suite 205 Winter Park, Florida 32789

BACKGROUND

This matter arose when Petitioners, L. Justin Jackman and Herman R. Staudt, filed a petition for administrative hearing on January 27, 1983, seeking a determination of the value of their stock in Intervenor-Respondent, Bank of Central Florida. The petition was prompted when a plan of merger for the Bank of Central Florida was approved by Respondent, Department of Banking and Finance, Division of Banking, on October 7, 1981. Under the plan, Staudt and Jackman, who owned approximately nine percent of the Bank's outstanding shares, would be entitled to receive substitute shares of stock in the successor bank, or be paid $25 for each share of stock held. Because they disagreed with these options, Petitioners elected to pursue the remedies available under Subsection 658.44(5), Florida Statutes, which generally provide that where a bank shareholder disagrees with a plan of merger, he may request that the Comptroller appoint an independent appraiser to value his stock.

On September 7, 1982, Respondent selected an independent appraiser and advised the parties that this determination would be final. Petitioners then filed an action against Respondent in the circuit court of Leon County and obtained an order on November 2, 1982, which provided that they were entitled to an administrative hearing under Subsection 120.57(1) Florida Statutes should they disagree with the results of the appraisal.

On January 5, 1983, Respondent issued its notice of intent to adopt appraisal as evidence of value of shares for Bank of Central Florida.

Petitioners thereafter requested a formal hearing on January 24, 1983, to contest the appraisal adopted by Respondent.

The matter was referred by Respondent to the Division of Administrative Hearings on January 28, 1983, with a request that a Hearing Officer be assigned to conduct a hearing. By Notice of Hearing dated February 22, 1983, the final hearing was scheduled for May 10 and 11, 1983, in Orlando Florida. By agreement of the parties it was rescheduled to August 2 and 3, 1983, at the same location.

At the final hearing Petitioner L. Justin Jackman testified on his own behalf and presented the testimony of Marc I. Perkins, an expert witness, and Donald C. Rogers and offered Petitioner's Exhibits 1-9; all were received in evidence. Intervenor-Respondent, Bank of Central Florida, presented the testimony of William C. Norton, an expert, Ronald W. Goff, an expert, Donald C. Rogers and John E. Muroski, and offered Intervenor's Exhibits 1-9; all were received in evidence except Exhibit 6(c). Respondent presented no witnesses but offered Respondent's Exhibit 1 which was received in evidence. Additionally, the prehearing stipulation was received as Hearing Officer Exhibit 1.

The transcripts of hearing (two volumes) were filed on August 29, 1983.

Proposed findings of fact and conclusions of law were filed by Intervenor- Respondent and Petitioners on August 22 and September 12, 1983, respectively, and have been considered by the undersigned in the preparation of this order. 1/ Findings of fact not included in this order were considered irrelevant to the issues, immaterial to the results reached, or were not supported by competent and substantial evidence.

The issue to be resolved herein is the appropriate value to be given the shares of stock held by Petitioners in the Bank of Central Florida as of December 31, 1981.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Introduction

   
   

   1. Petitioners, Herman R. Staudt and L. Justin Jackman, are the owners of 1,900 and 5,600 shares of capital stock, respectively, in Intervenor-Respondent, Bank of Central Florida (Bank). This represents 9.1 percent of the outstanding shares of the Bank. The Bank is a state chartered commercial bank which began business in 1975. Its principal offices are located at 1401 Lee Road, Orlando, Florida. Petitioners were founders and original members of the board of directors of the Bank when it began operating in 1975.

      
      

   2. On September 9, 1981, the President of the Bank issued a notice of special meeting of shareholders to be held on September 21, 1981, for the

      purpose of "considering and determining by vote whether an agreement to merge said Bank with and into Second Bank of Central Florida...shall be approved, ratified and confirmed." Under the terms of the merger agreement, each shareholder was entitled to receive substitute shares of stock in the successor bank, or if that was unacceptable, he would receive $25 per share for each share of stock held by him, or he could dissent from the merger. The agreement was ultimately approved by a majority of the shareholders and applications were then filed with Respondent, Department of Banking and Finance, Division of Banking (Department), seeking formal state approval. The applications were approved by the Department on October 7, 1981, and the merger was actually consummated effective January 4, 1982. The Bank continues to operate under the corporate title "Bank of Central Florida".

      
      

   3. Petitioners initially objected to the plan of merger and requested that the Department conduct a hearing on the merger applications. The request was denied. Petitioners then availed themselves of their rights under Subsection 658.44(5), Florida Statutes, which provides that whenever a bank and its dissenting shareholders cannot agree on a value to be assigned the stock held by the dissenting shareholders, the Comptroller shall select an appraiser to make an "appraisal of such dissenting shares" which shall be final and binding on all parties.

      
      

   4. On September 7, 1982, the Comptroller selected Blackstock & Company, Inc., a Jacksonville, Florida registered broker-dealer and registered investment adviser, to appraise the value of the dissenting shares. In its letter selecting Blackstock, the director of the Division of Banking gave the following relevant instructions to Blackstock:

      
      

      Your appraisal should include the Bank

      of Central Florida's earnings history and the history of its stock sale prices.

      Characteristics of the Bank of Central Florida to be considered in your appraisal are, the stock is not widely traded, and the interest of the shareholders for whom

      this appraisal has been commissioned constitute a minority interest in Bank of Central

      Florida. Your appraisal shall include a determination expressed in dollars and cents per share of the-fair compensation to be paid for all outstanding minority shares.

      That final dollar and cent figure shall be based upon information readily available through public records and records of the bank, but shall not be based upon any con fidential records of the Department of Banking and Finance.

      
      

      According to the letter of engagement, Blackstock was to receive a maximum

      $2,000 fee for its services to be paid by the Bank.

      
      

   5. On September 9, 1982, Petitioners filed a complaint in circuit court for Leon County seeking a declaratory judgment concerning the constitutionality of the Department's actions. On November 2, 1982, the circuit court entered its order holding that, if any party was dissatisfied with the independent appraisal, it was entitled to a de novo hearing before the Division of Administrative Hearings pursuant to Subsection 120.57(1), Florida Statutes.

   6. On November 11, 1982, Blackstock submitted a report of appraisal to the Comptroller in which it expressed the opinion that the dissenters' stock should be valued at $27.63 per share. After certain communications with the Department, a revised report was prepared by Blackstock and forwarded to the Comptroller on December 30, 1982. On January 5, 1983, the Comptroller issued its notice of intent to adopt the report. That notice prompted the instant proceeding.

      
      

   7. The Bank's stock has not been traded publicly at any time. All stock exchanges prior to December 31, 1981, were between existing shareholders. Most involved the Bank's present majority shareholder and chairman of the board. The Bank is a closely held family corporation and its stock is not readily marketable. This was openly acknowledged in the plan of merger itself. The Bank paid no dividends from its inception through December 31, 1981. The Bank is considered to be well managed. It has produced excellent financial results, and is considered to be a "high-performing" bank. As of December 31, 1981, its return on equity and return on assets were 19.4 percent and 1.73 percent, respectively, which were higher than any publicly traded bank in the State of Florida.

      
      

2. The Blackstock Report

   
   

   1. William C. Norton, vice-president of Blackstock and a registered securities dealer, assumed the initial responsibility for preparing the report on behalf of Blackstock. Without advising the Department, Norton contacted Terry A. Rodgers, a former co-worker in Orlando and a chartered financial analyst, and requested that Rodgers prepare the report. They agreed to split the $2,000 fee. Neither Norton or Rodgers had previously prepared an appraisal of dissenting shareholders' stock. Norton instructed Rodgers to "gather the financial information", prepare an "analysis" of that data, and then forward his results to Blackstock. Norton also "suggested the types of comparisons (he) felt would be appropriate in looking at it", the financial information Norton believed to be relevant, and "some of the valuation techniques (he) felt would be appropriate." However, it was not disclosed which of the four techniques used by Rodgers was recommended by Norton.

      
      

   2. Rodgers forwarded his report to Norton on October 18, 1982. After receiving Rodger's report, Norton reviewed the data, proofed the financial information, and rechecked Rodgers' calculations. The two also communicated by telephone on several occasions and once met briefly in Orlando. In all, Norton estimated he spent approximately six or seven days reviewing the data. He also requested that his partner review the data. Norton ultimately accepted the report almost verbatim, signed it, and sent it to the Department on November 11, 1982. After consultation with the Department, Norton made very slight revisions to the report and resubmitted it on December 30, 1982. Rodgers did not appear or testify at the final hearing in this cause. The report has been received in evidence as Respondent's Exhibit 1 and Intervenor's Exhibit 5.

      
      

   3. Data apparently relied upon by Rodgers, and in turn reviewed by Norton, included (a) all sales of stock of the Bank from its inception through December 31, 1981, (b) all purchases of bank stock by Donald Rogers (its current president) from 1975 through 1979, (c) the Bank's statement of condition as of December 31, 1981, (d) the Bank's Call Reports for the years 1977 through 1981,

      (e) the notice of special meeting of shareholders given on September 9, 1981, and (f) comparative data from the First Bankers' Corporation of Florida, Jefferson Bancorporation, Atlantic Bancorporation, and Great American Banks,

      Inc. The latter four banks are publicly traded Florida banks and were considered by Norton to be representative for comparative purposes because, like the Bank, two did not pay dividends one was controlled by a single family, and the remaining bank had undefined operating "characteristics" similar to that of Bank of Central Florida. However, because of the Bank's extremely small size in relation to the four, and the limited marketability of its shares, none were comparable in terms of size, market type or performance. Further, Norton conceded that a part of the 1901 earnings of one of the four (Jefferson) would normally be factored out for comparative purposes because they included extraordinary income. This in turn caused the composite price-earnings ratio to be substantially understated.

      
      

   4. By a subjective process, four valuation techniques were incorporated into the Blackstock report and were based upon data derived from a five year study period (1977-1981). These included (a) historical stock sale transactions, (b) industry price-earning ratio comparison, (c) industry price to book value ratio comparison, and (d) capitalization of expected future earnings. The four approaches produced the following valuations: $26.49, $30.38, $25.21 and 28.42. The sums were then divided by four to reach the recommended value of the stock, or $27.63 per share. Norton (and presumably Rodgers) did not attempt to assign a relative weight to each technique because such a process would require the use of subjective judgment, the four valuations arrived at were within a relatively narrow range ($25.21 to $30.38), and no single approach yielded a result substantially out of line with the others. Had the weighted average approach been used, Norton would have assigned a greater or lesser value or weight to the results of the various appraisal valuation techniques employed according to relevance. Despite his rejection of this methodology, Norton conceded that the weighted average method is the most applicable and best suited approach for valuing capital stock not having an active and continuous market, and that it is used by the U.S. Comptroller of the Currency in determining the value of dissenters' shares in federal bank merger cases. In this regard, he agreed that had the Bank been federally chartered, he would have used the same approach in valuing its stock.

      
      

   5. As noted earlier, Norton's industry price-earning ratio comparison was distorted because of the inclusion of a bank with extraordinary income due to the sale of a subsidiary and property. Had this non-recurring income been factored out, the value of the stock under this methodology would have exceeded

      $50 rather than the $30.38 reflected in the report.

      
      

   6. The historical sales approach, to which Norton gave equal weight, was also subject to criticism. This approach, which analyzed stock sales between 1977 and 1981, had the inherent weakness of failing to reflect the Bank as a going concern.

      
      

3. The Goff Report

   
   

   1. A second valuation study was performed on behalf of Intervenor by Ronald W. Goff, a research analyst for Allen C. Ewing & Company, an investment banking firm in Tampa, Florida. That report has been received in evidence as Intervenor's Exhibit 9.

      
      

   2. Although Goff reviewed the Blackstock report and certain other financial information, he relied primarily upon previous stock exchanges as a basis for determining fair market value. In this regard, he used a major stock transaction between a former vice-chairman of the board (J.F. Cooper) and its present chairman of the board (J.E. Muroski) as the primary basis for arriving

      at his recommended valuation. The sale involved 12,525 shares, was negotiated in the fall of 1980 and consummated on January 6, 1981, and resulted in increasing Muroski's total stock outstanding in the Bank from 45.3 percent to

      59.7 percent. The agreed upon price was $27.86 per share, and after "massaging" that number, Goff arrived at a recommended valuation of $27.34 per share.

      
      

   3. The circumstances underlying the sale included a falling out between Cooper and Muroski in the spring of 1980 and a request by Muroski that Cooper resign his position with the Bank in May of that year. Shortly afterwards, they began negotiations for Muroski to buy the stock, The deal was agreed upon in 1980 but was not consummated until January, 1981 for tax purposes. Although Goff did not consider the exchange to be an insider transaction, nonetheless it is found that it was because (a) no dividends had been paid from the inception of the Bank through 1981, and Cooper was accordingly receiving no return on his stock, (b) Cooper had terminated all involvement in the Bank's operations, (c) the exchange took place between current and former principal officers of the Bank, and (d) Muroski was an insider by definition of the Securities and Exchange Commission. Therefore, the transaction was not a reasonable basis to determine the fair market value of the stock. Goff himself acknowledged that it was an unusual valuation practice in preparing an appraisal of bank stock to determine market value on the basis of one or a very few transactions.

      
      

4. The Perkins Report

   
   

   1. Marc I. Perkins, an investment banker with Raymond, James and Associates in St. Petersburg, Florida, prepared a valuation report for Petitioners. That report has been received in evidence as Petitioners' Exhibit

   1. Perkins had previously been engaged on a number of occasions to value bank stock where a dispute over its value had arisen in a proposed merger.

      
      

      1. Perkins utilized the weighted average methodology which generally employs, where applicable, five categories of analyses, and then requires that the appraiser assign a weight to each category. This method is identical to that used by the U.S. Comptroller of the Currency in valuing dissenting shareholders' stock and is endorsed in an authoritative text entitled "Security Analysis" by Graham and Dodd. The five approaches include (a) book value, (b) adjusted book value, (c) imputed market value, (d) market value, and (e) investment value. However, in the case at bar imputed market value was inapplicable since that method is used only where a subsidiary is merged into a larger holding company. By the same token, the market value criterion was excluded by Perkins since no stock exchanges occurred during the last eleven months of 1981 and those occurring prior to that date were more akin to insider exchanges. Accordingly, Perkins used the three remaining approaches, to wit, book value, adjusted book value and investment value from which he derived valuations of $35.51, $35.44 and $50.30, respectively. After assigning the appropriate relative weights to each sum, he arrived at a recommended valuation of $46.59 per share.

         
         

      2. Unlike the authors of the Blackstock report, Perkins found no publicly traded Florida banking companies to be comparable to the Bank, and because of this, used as broad a peer group as possible for comparative purposes in order to take in the maximum number of investor decisions. The comparative data was extracted from the Jerry Williams, Inc. report which is a compilation of financial data for twenty-one publicly traded banking institutions in Florida. The use of a broader base is more appropriate than the Blackstock peer group since it is virtually impossible to find other banking companies of the same size, market type and performance as the Bank of Central Florida.

      3. Perkins assigned the greatest weight (75 percent) to the results of the investment value approach since that approach is appropriate where market value does not exist or where the market is thin. Moreover, it provides an easy to understand and reasonable estimate of the value to investors of a share in the future earnings of the Bank. Then, too, that approach includes an analysis of price earnings ratios for the average publicly traded Florida bank, and takes into account a number of key factors that go into investors' perceptions about risk and estimated returns. The approach also considers historical earnings per share as a guide to earnings prospects.

         
         

      4. Perkins assigned only 25 percent weight to the results of the adjusted book value approach since it had less relevance than investment value. He gave no weight to book value since that approach is dependent on historical cost and fails to reflect the investors' perceptions of the value of the bank as a going concern.

         
         

      5. Perkins' study produces a more reliable and accurate result than the other suggested methodologies because of its well-accepted approaches, the use of relative weights, a broader and more representative peer group and its rejection of irrelevant and improper data.

         
         

5. Miscellaneous

1. From December 31, 1981 through July, 1983 the value of money left on deposit in commercial banks in 30-day certificates of deposit and reinvested was

   18 percent. The Bank's average prime rate was 16 during 1982 and the average interest rate charged customers by the Bank was 12 percent.

   
   

   CONCLUSIONS OF LAW

   
   

2. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

   
   

3. Section 658.44, Florida Statutes, governs the procedure for valuing bank stock held by dissenting shareholders when a plan of merger has been approved. In all such cases, the law requires that the holders of such shares be paid "not more than the fair market value of the shares", and if an agreement as to that amount cannot be reached, certain prescribed procedures must then be followed. As is pertinent here, the Department was required to appoint an independent appraiser to appraise the value of the stock. Because a formal hearing was requested by Petitioners to contest the Department's action, the proceeding at this juncture is de novo in nature, and not merely a review of the correctness of the Department's appraisal. J.W.C. Co., Inc. v. Department of Transportation, 396 So.2d 778 (Fla. 1st DCA 1981). See also, Jackman, et al v. Lewis, No. 82-2360 (Fla. 2d Cir., Nov. 2, 1982)

   
   

4. Section 658.44 offers no definitive guidelines or criteria to be used in the valuation process other than a general reference to "fair market value". The agency has not promulgated interpretive or instructive rules as to the meaning of that term, or the appropriate methodology to be followed in the valuation process. Further, there are no state judicial decisions on the subject, or final agency orders interpreting the statute in question. However, the state law is patterned after the federal law governing the merger or consolidation of national banks into or with state banks, and reference to federal judicial decisions and agency action interpreting the federal statute is

   helpful 2/ Pasco County School Board v. Florida Public Employees Relation Commission, 353 So.2d 108, 116 (Fla. 1st DCA 1978); Kidd v. Jacksonville, 97

   Fla. 297, 120 So. 556 (1929); State ex rel Packard v. Cook, 108 Fla. 157, 146

   So.223 (1933)

   
   

5. The only reported federal decision involving the valuation of a dissenter's bank stock is Simonds v. Guaranty Bank and Trust Co., 492 F. Supp. 1072 (D. Mass. 1979) 3/ In that proceeding, the District Court was confronted with the task of reviewing an appraisal of a dissenter's stock by the

   U.S. Comptroller of the Currency. Like the state statute, the federal law set forth no appraisal procedure, did not define "value" or prescribe the method or criteria to determine the same, and there were no agency regulations regarding valuation. With this in mind, the Court noted that the primary objective of the valuation process was "to provide fair and reasonable compensation for the stock of the dissenting shareholder who objects to the merger." Simonds, 492 F. Supp. at 1082. This objective is the same as that described in the Department's letter of engagement to Blackstock on September 7, 1982. The Court went on to prescribe the following general rule to be used by the Comptroller in fulfilling the requirements of the statute:

   
   

   The statute, conferring on the Comptroller authority and responsibility for determining value and prescribing no method or parti cularized rule for doing so, necessarily places upon the Comptroller the responsibility for determining value by the exercise of discretion, taking into account relevant factors and determing what weight they deserve in the instance at hand.

   
   

   The weight to be given to the various elments, however, will vary from case to case, depending on the attendant circumstances.

   
   

   The weighting of various elements of value is a matter calling for exercise of judgment. It is inappropriate and impermissible to apply

   a rigid formula giving equal weight to (the) factors, or sets of factors...in place of exercising this judgment. 492 F. Supp. at 1054. (Emphasis added)

   
   

   From the foregoing instructive language, the following general rules may be gleaned. First, although the valuation process is discretionary in nature, it nonetheless requires that all relevant factors be taken into account. Second, the relevant factors must be assigned their appropriate weight in the valuation process, and absent some rational basis in the record, a simple equal weighting of the factors by the appraiser is impermissible. 4/ In the absence of any authority to the contrary, or even a suggestion by any party that a different standard should apply, these rules are determined to be reasonable and appropriate, and should be used in the valuation process under Section 658.44(5). Pasco County, 353 So.2d at 116.

   
   

6. In the case at bar, the most persuasive and credible evidence has been presented by Petitioners. In reaching this conclusion it is noted that witness Perkins, who had previously performed a number of similar appraisals of dissenting stock, utilized a methodology which is used by the U.S. Comptroller

   under a similar statute, and which is recommended by an authoritative text on security analysis. Moreover, it is superior to the two approaches used by witnesses Norton and Goff, and produces a more reliable result. Under Perkins' approach, all relevant factors have been taken into account, and given their appropriate weight. In contrast, the Goff report erroneously used a single insider transaction which was negotiated more than a year prior to December 31, 1981 as the basis for determining market value. Similarly, the Blackstock report, whose original author was not present at the final hearing, contained a number of deficiencies, such as the improper inclusion of extraordinary earnings in a member of the peer group's earnings, the use of an unrepresentative peer group for comparative purposes, the improper reliance upon historical stock exchanges as a basis for determining value, a failure to accord relative weights to each factor considered, /5 and a failure to follow recognized and established methodologies in the valuation process.

   
   

7. Accordingly, it is concluded that $46.59 is the "fair market value" to be given each share of dissenters' stock. This equates to $260,904 for Jackman's shares, and a total of $88,521 for Staudt.

   
   

8. Petitioners argue they are entitled to recover interest on the value of their stock from December 31, 1981 through July, 1983 at the rate of 18 percent. That rate is equivalent to the value of money left on deposit in commercial banks in thirty-day certificates of deposit and reinvested. They also contend they are entitled to have interest at the statutory rate of 12 percent on the total value of their shares plus interest from the date of this recommended order. Finally, they ask that they be reimbursed for costs incurred with the conduct of this proceeding in accordance with Subsection 658.44(5), Florida Statutes.

   
   

9. As principal authority for recovering interest from December 31, 1981 through July, 1953 Petitioners rely upon U.S. Parts, Inc. v. Tillis, 432 So.2d 674 (Fla. 5th DCA 1983) which involved a minority shareholder's suit to compel the corporation to purchase a proportionate number of their shares as were purchased from majority shareholders. But in Tillis, interest was awarded the minority shareholders only because of a legal wrong committed by the majority shareholders. This result is consistent with the greater weight of authority which provides that, in the absence of specific statutory authority, interest is awarded only in those cases where some legal wrong (such as breach of contract, violation of a duty, unlawful conversion and the like) has been done to the plaintiff. Meade v. Pacific Gamble Robinson Co., 58 A.2d 415 (Del. 1948); In re Janssen Dairy Corp., 64 A.2d 652 (N.J. 1949); Pittston Co. v. O'Hara, 63 S.E.2d 34 (Va. 1951); American General Corp. v. Camp, 190 A. 225 (Ct. of App.,Md. 1937). In the case at bar, the action of merging the two banks did not constitute a legal wrong to Petitioners for such an action is specifically authorized by Section 658.44. Moreover, Section 658.44 makes no provision for the payment of interest as claimed by Petitioners. Accordingly, it is concluded that Petitioners are not entitled to recover interest on the value of their stock from December 31, 1981 through July, 1983.

   
   

10. Petitioners also ask that they receive the statutory rate of interest (12 percent) on the total value of their shares from the date of the final order entered in this cause and continuing until payment for the shares is made by Intervenor-Respondent. But they have cited no statutory basis to support the award of interest, and it is concluded that this request should be denied.

    
    

11. Finally, Subsection 658.44(5), Florida Statutes, provides that where a dispute over the valuation of dissenters' stock occurs, an independent appraisal

shall be ordered by the Department, and "(t)he expenses of appraisal shall be paid by the resulting state bank or trust company." Petitioners construe this language to mean that all costs incurred by the minority shareholders in conducting the administrative action after the independent appraisal is made must be borne by the Bank of Central Florida. However, the statute in question makes no provision for awarding costs to the prevailing party, and it is concluded that this request should be denied.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Petitioners L. Justin Jackman and Herman R. Staudt be paid

$46.59 per share for each share of stock held in the Bank of Central Florida,

said amount representing the fair market value of such stock as of December 31, 1981. It is further

RECOMMENDED that Petitioners' request to receive interest from December 31, 1981 through July, 1983, post order interest, and costs incurred in this proceeding be DENIED.

DONE and ENTERED this 23rd day of September, 1983, in Tallahassee, Florida.

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 23rd day of September, 1983.

ENDNOTES

1/ The filing on August 22 by Intervenor-Respondent was labeled as a "memorandum". On September 16, 1983, or three days after the due date, proposed findings of fact and conclusions of law were also filed by the Bank.

2/ Although Intervenor suggests the two laws may be distinguished since federal law requires that the dissenter receive "the value of the shares held by him" while state law refers to the receiving of "fair market value", the two laws are otherwise similar, and it is concluded that any judicial decisions or agency orders should be considered persuasive. In any event, both are designed to compensate the dissenter with fair and reasonable compensation for his stock.

The Department acknowledged as much in its letter appointing Blackstock as appraiser in this matter.

3/ An earlier decision involving the same parties, Simonds v. Guaranty Bank and Trust Co., 480 F. Supp. 1257(D. Mass. 1979), was preliminary in nature and not dispositive of the issues raised in the appeal.

4/ Nine appraisals made by Use U.S. Comptroller of the Currency comport with these broad guidelines. Those appraisals have been received in evidence as Petitioners Exhibit 9, and include an appraisal of a dissenter's stock in a Florida bank with a national charter.

5/ Intervenor contends, that because equal weighting eliminates the necessity of performing a subjective weighting of the elements, and all of the approaches in the Blackstock report produced a similar result, no weighting is necessary. However, these reasons are a insufficient basis to ignore the weighting process.

COPIES FURNISHED:

Eli H. Subin, Esquire Post Office Box 670 Orlando, Florida 32802

Carl B. Morstadt, Esquire Office of the Comptroller The Capitol, Suite 1301 Tallahassee, Florida 32301

Robert D. Gatton, Esquire and

Ken C. Bishop, Esquire 2699 Lee Road, Suite 205

Winter Park, Florida 32789

Docket for Case No: 83-000271

Orders for Case No: 83-000271