- 45 -
precisely what I had done to investigate or analyze the
transaction. I didn't just say I did due diligence, and leave it
open for them to define what I might or might not have done."
The purported value of the Sentinel EPE recycler generated
the deductions and credits in these cases, and that circumstance
was reflected in the offering memoranda. Certainly Becker
recognized the nature of the tax benefits and, given their
education and professional experience, petitioners should have
recognized it as well. Yet neither petitioners nor Becker
verified the purported value of the Sentinel EPE recycler.
Becker confirmed at trial that he relied on PI for the value of
the Sentinel EPE recyclers.
Investors as technologically and financially sophisticated
as petitioners either learned or should have learned the source
and shortcomings of Becker's valuation information when he
"precisely" disclosed "what [he] had done to investigate or
analyze the transaction." Grelsamer knew that Becker was not
qualified to perform an on-site evaluation of the recycler and
Morgan knew from experience "what specialized equipment or
machinery costs". Accordingly, we find that petitioners did not
reasonably or in good faith rely on Becker as an expert or a
qualified professional working in the area of his expertise to
establish the fair market value of the Sentinel EPE recycler and
economic viability of the Partnership transactions. Becker never
Page: Previous 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 NextLast modified: May 25, 2011