Philippe and Nadine Grelsamer - Page 41

                                       - 41 -                                         
          Sentinel EPE recycler), and a surrogate judge from Rhode Island             
          who did business in the Boston-Cape Cod area (and who had no                
          expertise in engineering or plastics materials).  Becker                    
          testified that he was allowed to see PI's internal accounting               
          controls regarding the allocation of royalty payments and PI's              
          recordkeeping system in general.  In Provizer v. Commissioner,              
          supra, this Court found that "PI had no cost accounting system or           
          records."                                                                   
               Becker confirmed at trial that he relied on the offering               
          materials and discussions with PI personnel to establish the                
          value and purported uniqueness of the recyclers.  Becker                    
          testified that he relied upon the reports of Ulanoff and Burstein           
          contained in the offering materials, despite the fact:  (1)                 
          Ulanoff's report did not contain any hard data to support his               
          opinion; (2) Ulanoff was not an economics or plastics expert; (3)           
          Becker did not know whether Burstein was an engineer; and (4)               
          Burstein was a client of Miller's and was not an independent                
          expert.  In addition, Ulanoff and Burstein each owned an interest           
          in more than one partnership that owned Sentinel recyclers as               
          part of the Plastics Recycling program.                                     
               Becker explained at trial that in the course of his practice           
          when evaluating prospective investments for clients, he focuses             
          on the economics of the transaction and investigates whether                
          there is a need or market for the product or service.  With                 






Page:  Previous  31  32  33  34  35  36  37  38  39  40  41  42  43  44  45  46  47  48  49  50  Next

Last modified: May 25, 2011