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Brennan's comparables are based on occupations for much larger
companies that have more specialized officers. The Penalbas'
duties were not accurately described by Mr. Brennan's
descriptions of chief executive officer and top financial
executive. In effect, Mr. Brennan's statistics merely determined
who were the highest paid individuals for the wholesale trade
industry for the top executive officer and the top financial
officer nationwide without regard to the particular aspects of
petitioner's industry. We find no evidence that Mr. Brennan's
report includes any businesses comparable to petitioner.
Petitioner had two witnesses testify as to reasonable
compensation for the Penalbas. Edward Dubner (Mr. Dubner)
testified on behalf of petitioner with regard to the Penalbas'
compensation. Mr. Dubner was a credit manager for two factoring
companies during 1989 and 1990, that did business with
petitioner. In the garment industry, a factoring company
purchases receivables or lends money against those receivables.
A factor's interest in reviewing officers' compensation is to
determine if the business is capable of functioning on a day-to-
day basis and paying its bills on time. In August 1990, Mr.
Blumberg consulted with Mr. Dubner about the amount petitioner
was proposing to pay as officers' compensation. Mr. Dubner did
not object to the 1990 compensation because the Penalbas loaned
back a substantial portion of their 1990 compensation to
petitioner, and subordinated those loans to the loans of other
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