How Would You Measure Fair Value Of Assets In This Circumstances
Mr. Braxton owned a big house on a large piece of land in Rome. The property had been in his family since around 1895. Mr. Braxton was 80 years old and was not sufficiently expert on taking care of his large property. He sought to move into a retirement village and so he sold his property to the Miracle Group which was an association of Physicians. The Physicians wanted to use the house for their medical practice as it was centrally located and had many rooms, had an atmosphere that would make patients feel comfortable.
The house was enclosed by a large group of trees that had been planted by the Braxton family over the years. The trees covered a large portion of the land. Miracle did not want to make large modifications to the house as it was fitting for a Physicians’ surgery. Only minor modifications to the inside of the house and some maintenance to the exterior were required. However, Miracle wanted to divide the land and sell the portion adjacent to the house; this portion currently being covered in trees. The property sold would be very suitable for up-market apartment blocks.
One of the conditions of the sale of the property to Miracle was that, until Mr. Braxton remained alive, the trees on the property could not be cut down as it would have caused him great distress to see such modifications to the family home. This clause in the contract would restrict the building of the apartment blocks. However, this restriction would not be enforceable on subsequent buyers of the property if Miracle wanted to sell the property in the future. A further issue affecting the building of the apartment blocks was that across one corner of the block there was a gas pipeline that was a part of the city infrastructure for the supply of gas facilities to Rome residents.