- 38 -
in workouts and turnarounds of technology companies. Selvin is a
C.P.A. who ran his own accounting firm for 30 to 35 years in New
York City. In respect of these accomplishments and their obvious
financial prowess, petitioners Blount, David, and Selvin do not
pretend to be unsophisticated investors.
Mrs. Zenkel, on the other hand, claims that she is an
unsophisticated investor. Her claim is without merit. In her
SAB Reclamation subscription agreement, Mrs. Zenkel expressly
represented and warranted that she had the experience and
expertise in financial and business affairs necessary to evaluate
the merits and risks of investing in SAB Reclamation. Moreover,
her decision to invest in SAB Reclamation was made with the
assistance of Mr. Zenkel, an investment banker with experience in
the syndication business. Although Mr. Zenkel did not testify at
the trial4, the record shows that he discussed SAB Reclamation
with his wife, Steele, and Becker. Becker testified that Mr.
Zenkel "called me directly regarding the program. He had a large
4 Mr. and Mrs. Zenkel both benefited from the tax
deductions and credits from SAB Reclamation on their joint 1982
Federal Income tax return, and together they petitioned this
Court in docket No. 12091-89. The testimony of Mrs. Zenkel and
Becker shows that Mr. Zenkel was heavily involved in the decision
to invest in SAB Reclamation, and his failure to testify does not
further his wife's claim that she was an unsophisticated
investor. See Bresler v. Commissioner, 65 T.C. 182, 188 (1975);
Pollack v. Commissioner, 47 T.C. 92, 108 (1966), affd. 392 F.2d
409 (5th Cir. 1968); Wichita Terminal Elevator Co. v.
Commissioner, 6 T.C. 1158, 1165 (1946), affd. 162 F.2d 513 (10th
Cir. 1947).
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