Viewing page 26 of 116

This transcription has been completed. Contact us with corrections.

- 25 -

Eastern appraises Colonial's DC-3 aircraft at $80,000 each. Eastern has not sold any DC-3 aircraft during the past three years. Accordingly, it relies on other sources of information regarding current prices. Recent sales have brought prices varying from $87,500 for individual aircraft down to $75,000 where ten aircraft were sold in a package deal. Aviation brokers currently quote a price of $95,000 for DC-3 aircraft. One well-known aircraft broker advised Colonial that he could get between $75,000 and $100,000 each for Colonial's DC-3 aircraft. On the basis of the foregoing, Eastern concludes that the $80,000 figure represents a fair value for the DC-3 aircraft.

Easter appraises four of Colonial's DC-4 aircraft at $450,000 each and one DC-4B at $625,000. To support this appraisal, Eastern points to its negotiations in the fall of 1954 to sell its entire fleet of DC-4 aircraft. Eastern received individual offers for DC-4s in the amount of $52,000, $571,000, and $576,000. However, desiring to sell the fleet in one lot, the carrier sold ten of such aircraft and parts for $4,500,000. Of the aircraft sold by Eastern, one was resold in June of 1955 to California-Eastern for $600,000 and another was sold to the Flying Tigers for $525,000.

Other quotations and transactions also are relied upon to justify Eastern's estimate of the value of the DC-4s. Riddle Airlines recently