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creditors. Mr. Dubner's interest was not in the reasonableness
of salaries paid to officers, but rather the capital of the
company. Mr. Dubner's testimony, therefore, is of little, if
any, value on the issue of reasonable compensation. His interest
was solely whether the 1990 officers' compensation paid by
petitioner would adversely affect petitioner's ability to pay its
bills.
Petitioner's accountant, Mr. Blumberg, was called as a
witness by petitioner to testify as to the reasonableness of the
Penalbas' compensation. The Court ruled that consideration of
Mr. Blumberg's testimony would be limited to the financial data
he had prepared. Mr. Blumberg utilized the Robert Morris
Associates 1990 Annual Statement Studies (RMA). The RMA is
heavily relied on by credit managers and officers at banks,
factors, and trade creditors. The RMA lists comparables by their
Standard Industrial Classification (SIC) code. Mr. Blumberg
utilized the SIC code 2257, which includes operations that are
"establishments primarily engaged in knitting weft (circular)
fabrics or in dyeing, or finishing weft (circular) knit fabrics."
This definition includes converting operations. Mr. Blumberg
determined that it was inappropriate to classify petitioner as an
apparel maker, fabric producer, or distributor, because these
operations produce woven fabrics that are rarely produced in the
U.S. and are generally produced on a much greater scale than knit
fabrics. In comparison with woven fabric operations, operations
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