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2. Petitioners' Purported Reliance on Becker and Miller
Petitioners also maintain that they reasonably relied upon
the advice of a qualified adviser. Busch's estate contends that
he reasonably relied on Becker, while Snyder contends that he
reasonably relied on Becker and Miller. In each of these cases,
petitioners' investigation was limited to speaking to Becker, and
in Snyder's case, Miller as well, in addition to reviewing the
offering memoranda.
The concept of negligence and the argument of reliance on an
expert are highly fact intensive. In these cases, two corporate
leaders, experienced and able in finance and at investigating
business proposals, assert that they relied upon their accountant
to investigate the tax law and the underlying business
circumstances of a proposed investment. The accountant,
experienced in tax matters, explains that he made an
investigation within the limits of his resources and abilities
and fully disclosed what he had done. The question here is
whether petitioners actually and reasonably relied on the
accountant with respect to valuation problems requiring expertise
in engineering and plastics technology or whether the accountant
gave the tax advice and facilitated the transaction, but did not
make a full and independent investigation of the relevant
business and technology and did clearly inform his clients of the
limits of his knowledge and investigation of the transaction.
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