- 26 -
supra; Provizer v. Commissioner, supra. The exorbitant cost of
the machines, $1,162,667 for the Sentinel EPE recycler and
$1,750,000 for the Sentinel EPS recycler, would therefore have
only been reasonable if there were other factors to justify such
cost.
However, other factors indicate that the Sentinel recyclers
were highly overvalued. For instance, the Sentinel recyclers
were not unique. Respondent's experts identified other machines
that were not only functionally equivalent to the Sentinel
recyclers but were also significantly less expensive. We have
found that information regarding comparable, less expensive
recyclers was widely available. If a potential purchaser,
especially an individual sophisticated in marketing and research
techniques, had conducted a due diligence investigation into the
Sentinel recyclers, such potential purchaser should have learned
that comparable, less expensive equipment existed and that the
Sentinel recyclers were overvalued.
Petitioner claims that in determining the value of the
recyclers he did not discover any machines capable of performing
the functions performed by the Sentinel recyclers. However,
there is no indication in the record that petitioner surveyed the
then current information regarding recyclers.6 Rather,
6 In his marketing reports, petitioner stated that he
independently investigated the value of the recyclers by
discussing the matter with "nonrelated principals in the
(continued...)
Page: Previous 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 NextLast modified: May 25, 2011